Federal Circuit Reverses the District Court’s Award of Attorneys’ Fees Due to the District Court’s Failure to Provide a Clear Explanation of the Supporting Reasons
WHDA Blogging Team | June 17, 2020
MUNCHKIN, Inc. v. LUV ‘N Care, Ltd.
June 9, 2020
Dyk, Taranto, and Chen (Opinion by Chen)
Summary
Munchkin, Inc. (Munchkin) sued Luv ‘N Care, Ltd. (LNC) in the District Court for the Central District of California based patent infringement, trademark infringement and trade dress infringement of its’ spill proof containers. Before the District Court, Munchkin voluntarily dismissed all of its’ legal claims against LNC. After dismissal of these claims, LNC filed a motion for attorneys’ fees, which was awarded to LNC by the District Court. On appeal, the Federal Circuit reversed the award of attorneys’ fees, explaining that the District Court abused its’ discretion in awarding attorneys’ fees because LNC’s motion for attorneys’ fees and the District Court’s decision awarding such fees did not provide a clear explanation of the reasons supporting an award for the attorneys’ fees, noting that it is particularly important to provide a clear explanation of the reasons supporting an award for the attorneys’ fees whenthe claims are notfully litigated before the District Court.
Background
- Subject Matter at Issue
The present case relates to spill-proof containers, and involves patent infringement, trademark infringement and trade dress infringement claims related to such spill-proof containers.
Fig. 3 of U.S. Patent No. 8,739,993
- Procedural Background
This case is an appeal from the United States District Court for the Central District of California.
Munchkin, Inc. (Munchkin) filed a lawsuit in the District Court against Luv n’ Care, Ltd. (LNC) for trademark infringement and unfair competition claims related to spill-proof drinking containers. A year later, the District Court granted Munchkin leave to amend the complaint to include new trademark infringement claims and trade dress infringement claims and new patent infringement claims based on U.S. Patent No. 8,739,993 (the ’993 patent).
During litigation, Munchkin voluntarily dismissed all of its non-patent claims with prejudice. Then, in an inter partes review (IPR) before the Patent Trial and Appeal Board, Munchkin’s patent was held unpatentable. Thereafter, Munchkin voluntarily dismissed its’ patent claims.
Thereafter, LNC filed a motion for attorneys’ fees under 35 U.S.C. § 285 and 15 U.S.C. § 1117(a), and the District Court granted attorneys’ fees to LNC finding the case to be “exceptional” based on LNC’s arguments.
Before the Federal Circuit, Munchkin appeals, arguing that the District Court’s determination that this was an “exceptional” case lacks a proper foundation because LNC’s motion insufficiently presented the required facts and analysis needed to establish that Munchkin’s patent, trademark, and trade dress infringement claims were so substantively meritless to render the case exceptional.
The Federal Circuit’s Decision
The Legal Bases for Attorneys’ Fees
Under 35 U.S.C. § 285 of the Patent Act, “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” Similarly, under 15 U.S.C. § 1117(a) of the Lanham Act pertaining to trademark and trade dress infringement, “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.”
In Octane Fitness, 572 U.S. 545 (S. Ct. 2014), the U.S. Supreme Courtheld that an exceptional case is “one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.” This analysis considers the case based on the totality of the circumstances, requiring a movant to show the case is exceptional by a preponderance of the evidence.
The Federal Circuit’s Review
The Federal Circuit reviews the District Court’s determination that a case is exceptional for abuse of discretion. As explained by the Federal Circuit, “[a] District Court abuses its discretion when it makes a clear error of judgment in weighing relevant factors or in basing its decision on an error of law or on clearly erroneous factual findings.”
According to the Federal Circuit, “[w]hile we generally give great deference to a District Court’s exceptional-case determination, a District Court nonetheless must “provide a concise but clear explanation of its reasons for the fee award.”
The Federal Circuit remarked that: “This case represents ‘an unusual basis for fees,’ in that the District Court’s exceptional-case determination rests on an examination of issues—trademark infringement, trade dress validity, and patent validity—that were not fully litigated before the court.” The Federal Circuit further explained that: “when the bases of an attorneys’ fee motion rest on issues that had not been meaningfully considered by the District Court, as is the case here, ‘a fuller explanation of the court’s assessment of a litigant’s position may well be needed when a District Court focuses on a freshly considered issue than one that has already been fully litigated.’” The Federal Circuit also noted that the patent, trademark, and trade dress claims were all new issues presented in the context of the motion for attorneys’ fees, but that LNC failed to make a detailed, fact-based analysis of Munchkin’s litigating positions to establish that the claims were all wholly lacking in merit.
- The Patent Claims
With respect to LNC’s patent claim, the Federal Circuit held that “neither LNC’s fee motion nor the District Court’s opinion comes close to supporting the conclusion that Munchkin acted unreasonably.” The Federal Circuit also points out that the District Court had also adopted Munchkin’s claim interpretation, which “erected a serious hurdle to LNC’s invalidity challenge.” The Federal Circuit added that the fact that the District Court had adopted Munchkin’s claim interpretation made “the need for a full and detailed explanation in this case for why Munchkin’s litigating position was exceptionally weak all the more imperative.”
The Federal Circuit also criticized the District Court’s conclusion that Munchkin unreasonably maintained its’ patent infringement lawsuit once the Patent Board instituted the IPR on the bases that “(1) published statistics at the time indicated that the Patent Board cancels some of a patent’s instituted claims 85% of the time and cancels all of the instituted claims 68% of the time, (2) the Patent Board’s final decision found all of the ’993 patent’s claims unpatentable, and (3) this court summarily affirmed that decision.” The Federal Circuit explained that the IPR statistics combined with the meritorious outcome are not enough, noting that “they tell us nothing about the substantive strength of Munchkin’s litigating position (considering both the governing law and the facts of the case).”
The Federal Circuit also criticized the District Court’s superficial reference to prior art to a Playtex Twist ‘N Click cup product as purportedly evidencing weakness of the validity of the patent because such prior art was not discussed in detail and was not even formally part of the court record. The Federal Circuit explained that LNC’s motion needed to go much further into the facts to meet its’ burden of proof.
Accordingly, the Federal Circuit held that the District Court’s finding in relation to the patent claim was an abuse of discretion. (NOTE: Here, the District Court had actually granted attorneys’ fees for both proceedings before the court and before the U.S.P.T.O. Although the Federal Circuit dismissed the award of attorneys’ fees, the Federal Circuit expressed that it would not address whether 35 U.S.C. 285 permits recovery of attorneys’ fees related to proceedings before the U.S.P.T.O.)
- The Trademark Claims
With respect to LNC’s trademark claim, the Federal Circuit held that an ultimate problem with the District Court’s finding that the trademark claims were “exceptional” under § 1117(a) is that it conflicts with the court’s earlier order granting Munchkin’s motion to amend the complaint to add the new trademark claim. Accordingly, the Federal Circuit indicated that “Munchkin cannot be faulted for litigating a claim it was granted permission to pursue,” especially “[a]bsent misrepresentation to the court.”
Furthermore, the Federal Circuit also noted that as with the patent claims, the District Court was required to make specific findings about the trademark infringement merits themselves, pertaining to a formal likelihood of confusion analysis. Moreover, the Federal Circuit also emphasized that “Munchkin’s dismissal of its claims with prejudice also does not establish, by itself, a finding that the merits were so substantively weak as to render the claims exceptional,” noting that “[t]here are numerous reasons, including Munchkin’s asserted desire to streamline the litigation, to drop a claim, not just substantive weakness.”
Accordingly, the Federal Circuit held that the District Court’s finding in relation to the trademark claim was also an abuse of discretion.
- The Trade Dress Claims
With respect to LNC’s trade dress claim, as with the patent and trademark claims, the Federal Circuit explained that “none of these barebones allegations justify a finding that Munchkin’s position that it owned a protectable, valid trade dress right was unreasonable.” Moreover, the Federal Circuit also noted that, like the trademark claim, the District Court had allowed Munchkin to amend the complaint to add the new trade dress claim.
Accordingly, the Federal Circuit reversed the District Court’s granting of attorneys’ fees.
Takeaways
- When seeking attorneys’ fees in patent, trademark and/or trade dress matters, it is important to make sure that motions for attorneys’ fees provide a clear explanation of the reasons supporting an award for the attorneys’ fees – i.e., the reasons must demonstrate the unreasonableness of opposing party’s conduct under the governing law and the facts of the case.
Tags: 15 U.S.C. § 1117(a) > 35 U.S.C. § 285 > Attorneys’ Fees > Exceptional Cases
A Pencil Copying A Pencil Copying A Pencil: Patented Design Intentionally Resembling A No. 2 Pencil Not Infringed by Copycat
WHDA Blogging Team | June 3, 2020
Lanard Toys Limited v. Dolgencorp LLC
May 14, 2020
Before Lourie, Mayer, and Wallach (Opinion by Lourie)
Summary
Where a design patent claims an ornamental design that intentionally resembles a common object having a well-known appearance and well-known functional features, such as a No. 2 pencil, the smaller differences in the design take on greater significance in determining not only the scope, but also infringement, of the design patent. The theory of infringement of a design patent cannot be based solely on design elements that are already known in the prior art or that are functional.
Details
Lanard Toys Limited (“Lanard”) is perhaps better known for its long-lasting, massively produced lines of The Corps! action figures, which were marketed as the more affordable alternatives to the G.I. Joe action figures.
But (unfortunately) these action figures are not the toy at issue in Lanard’s dispute with Ja-Ru, Inc. (“Ja-Ru”), a fellow toymaker; Dolgencorp LLC, a distributor; and Toy “R” Us-Delaware, Inc., a toy retailer.
Rather, the toy at issue is a chalk holder in the shape of an oversized, No. 2 pencil that can hold pieces of colored chalk for children to draw on sidewalks.
From 2011 to 2014, Dolgencorp distributed, and Toys “R” Us sold, Lanard’s “chalk pencils”. Then, in 2013, Ja-Ru began marketing its own chalk holder. Ja-Ru admitted during litigation that they had used Lanard’s chalk pencil as a reference for designing and developing their product. Beginning with the 2014 toy season, Dolgencorp and Toys “R” Us stopped ordering Lanard’s chalk pencils, and began offering Ja-Ru’s product instead.
Lanard owns U.S. Design Patent No. D671,167 (“D167 patent”), titled “chalk holder” and claims the “ornamental design for a chalk holder”.
Reproduced below (from left to right) are representative Figure 1 from the D167 patent, Lanard’s chalk pencil, and Ja-Ru’s chalk pencil:
Lanard sued Ja-Ru, Dolgencorp, and Toys “R” Us for design patent infringement.[1] When the parties cross-moved for summary judgment on the question of infringement, the district court sided with Ja-Ru, granting summary judgment that Ja-Ru’s product did not infringe Lanard’s D167 patent. Lanard appealed.
On appeal, Lanard challenges the district court’s claim construction, asserting that the district court erroneously eliminated design elements from the scope of the D167 patent. Second, Lanard challenged the district court’s infringement analysis as failing to comport with the “ordinary observer” test.
The Federal Circuit rejected both of Lanard’s challenges, and adopted the district court’s determinations basically without modification on every one of Lanard’s contentions
Claim construction
Design patents “typically are claimed as shown in drawings”.[2] Functional characteristics in a design may limit the scope of protection, as “the scope of the claim must be construed in order to identify the non-functional aspects of the design as shown in the patent.”[3]
Further, the construction of a design patent involves identifying “various features of the claimed design as they relate to the accused design and the prior art.”[4] Prior art may be especially important in revealing the functionally necessary design elements, where “[e]very piece of prior art identified by the parties that incorporates similar elements configures them in the exact same way.”[5] Those elements represent the “broader general design concepts” that are excluded from design patent protection.
Here, Lanard argues that the district court improperly eliminated elements of the claimed designed based on functionality or lack of novelty.
The Federal Circuit, to the contrary, finds no fault with the district court’s claim construction, going so far as to note approvingly that the district court “followed our claim construction directives to a tee.”
The Federal Circuit appreciates that the district court meticulously factored out the functional “general design concepts” in Lanard’s claimed design:
- the conical tapered piece for holding the chalk in place during use;
- the wide and elongated body for storing the chalk and for the user to grasp;
- the ferrule attaching the eraser to the body of the chalk holder; and
- the eraser.
The Federal Circuit agrees with the district court that the elements listed above are common to No. 2 pencils, and are indeed utilitarian concepts that are found in every piece of writing utensil-related prior art cited during prosecution.
The Federal Circuit also agrees with the district court’s identification of the protectable ornamental elements in the D167 patent:
- the size and angle of taper of the conical piece;
- the hexagonal shape of the body
- the specific grooves on the ferrule;
- the columnar shape of the eraser; and
- the precise proportions of the various design elements relative to each other.
Before the district court, Lanard argued that the prior art does not combine the elements of a pencil with a chalk holder. The district court found Lanard’s argument to be unavailing, and the Federal Circuit agrees wholeheartedly.
Lanard’s argument is analogous to arguing that the intended use of an invention in a utility patent distinguishes the invention over the prior art. Such an argument can be difficult to make for a utility patent, and even more so in the context of a design patent. And the district court concluded as much.
Lanard’s patented design, as shown in the drawings, deliberately mimics a No. 2 pencil. The drawings do not differentiate between a toy and an actual pencil. Further, Lanard’s argument contains an implicit admission that elements of the D167 patent were taken from well-known designs for pencils. If, as Lanard asserted, the intended function was the only difference between Lanard’s design and the prior art, then Lanard’s design would not be patentable. The district court based its infringement analysis on the assumption that the D167 patent was valid.
On a side note, I believe this case is distinguishable from the Federal Circuit’s recent decision in Curver Luxembourg, SARL v. Home Expressions Inc. (Fed. Cir. 2019) (case reviewed presented by Sung-Hoon Kim). In Curver,the Federal Circuit limited the scope of the claimed design (i.e., a pattern for a surface ornamentation) to the article of manufacture recited in the claim (i.e., a chair). However, the Federal Circuitalso noted that they were confronted with an atypical situation in Curver, because in most design patents, the drawings themselves depict a particular article of manufacture. Because the drawings in D167 patent identify the article of manufacture, Curver unlikely would have helped Lanard’s claim construction argument.
Infringement
The “ordinary observer” test for design patent infringement requires a comparison of the similarities in overall designs, not similarities of ornamental features in isolation. Under the “ordinary observer” test, courts may discount functional elements, but the analysis must focus on “how [the ornamental features] impact the overall design.”[6]
As in claim construction, the infringement analysis cannot ignore the prior art:
[T]he ordinary observer is deemed to view the differences between the patented design and the accused product in the context of the prior art. When the differences between the claimed and accused design are viewed in light of the prior art, the attention of the hypothetical ordinary observer will be drawn to those aspects of the claimed design that different from the prior art. And when the claimed design is close to the prior art designs, small differences between the accused design and the claimed design are likely to be important to the eye of the hypothetical ordinary observer.[7]
In this case, the district court determined that as compared to Lanard’s claimed design, Ja-Ru’s chalk pencil had:
- a more rotund and more stunted body;
- a shorter, more gradually sloping, and ridged conical piece; and
- a ferrule with a different pattern.
The district court concluded that, based on those distinctions, an ordinary observer would not consider Ja-Ru’s chalk pencil to have the same design as claimed in the D167 patent.
On appeal, Lanard argues that the district court’s infringement analysis compared the designs on an element-by-element basis, rather than comparing their overall appearances. Lanard also argues that the district court focused on features that distinguished the claimed design over the prior art, so that the district court was in effect reverting to the now-defunct “point of novelty” test. The “point of novelty” test would have asked whether Ja-Ru had stolen the novel aspects of Lanard’s patented design that distinguished it from the prior art.
The Federal Circuit rejects both of Lanard’s arguments.
As the district court noted, and which the Federal Circuit agrees, the problem for Lanard is that the asserted design similarities between the claimed design and Ja-Ru’s product stem from aspects of the design that are either functional or well-established in the prior art.
Lanard wants the district court and the Federal Circuit to find infringement on the basis that Ja-Ru’s product and the claimed design share the overall appearance of a No. 2 pencil. But this is precisely the argument that Lanard should not make.
Any aspect of Lanard’s claimed design that relates to the function of a No. 2 pencil or the conventional, well-known appearance of a No. 2 pencil are not patentable, and as such, are excluded from the scope of the design patent during claim construction and cannot be the basis for establishing infringement.
Lanard’s argument is made weaker by the ubiquity of No. 2 pencils. The Federal Circuit agrees with the district court’s finding that, because of the crowdedness of the field of pencils or writing utensils in general, the ornamental features in Lanard’s claimed design which are not dictated by function and which are not in the prior art take on greater significance. Far from being inconsequential and minor, those ornamental distinctions would dominate an ordinary observer’s attention when evaluating the overall appearances of Ja-Ru’s product and Lanard’s claimed design. The Federal Circuit agrees with the district court that those ornamental distinctions are sufficient to preclude a finding of infringement.
What troubles the district court and the Federal Circuit especially is what they perceive to be an attempt by Lanard to monopolize the basic design concepts underlying a pencil. They believe that Lanard’s arguments, if accepted, would “exclude any chalk holder in the shape of a pencil and thus extend the scope of the D167 patent far beyond the statutorily protected ‘new, original and ornamental design’.”
Takeaway
- In a crowded art, the devil and God are in the detail. The nuances in a design can take on greater significance where the article of manufacture embodying the design (or the article of manufacture that the design is intended to resemble) has a well-known appearance.
- While the scope of a design patent is limited to the drawings, courts during litigation have often relied on “verbal descriptions” of the claimed design to construe the claim. Be strategic about those verbal descriptions. For example, a quick review of the prior art cited during prosecution suggests that Lanard’s claimed design and the design of Ja-Ru’s chalk pencil may be closer to each other than to the cited prior art—in that case, Lanard might have offered a verbal description of the D167 patent drawings that downplayed the differences between those drawings and Ja-Ru’s chalk pencil, and still distinguished over the prior art.
- Drawings in a design patent application should reflect the intended function of the claimed design. A potential weakness in Lanard’s design patent may be that the drawings look too much like the article of manufacture (i.e., No. 2 pencil) that the claimed design is intended to resemble. If Lanard’s intention was to claim an oversized, toyish rendition of the No. 2 pencil, perhaps the patent drawings could have better emphasized the exaggerated proportions of the various chalk holder parts relative to each other.
[1] Lanard also alleged copyright and trade dress infringement, but this review will focus only on the design patent issues.
[2] Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 679 (Fed. Cir. 2008).
[3] Sport Dimension, Inc. v. Coleman Co., 820 F.3d 1316, 1320 (Fed. Cir. 2016).
[4] Egyptian Goddess, 543 F.3d at 680.
[5] Richardson v. Stanley Works, Inc., 610 F.Supp.2d 1046, 1049 (D. Ariz. 2009), aff’d 597 F.3d 1288 (Fed. Cir. 2010).
[6] Richardson, 597 F.3d at 1295.
[7] Egyptian Goddess, 543 F.3d at 671.
The disclosure-dedication doctrine applies at limitation level, not at embodiment level
WHDA Blogging Team | May 27, 2020
Eagle Pharmaceutical Inc. v. Slayback Pharm LLC
May 8, 2020
O’Malley (Opinion author), Reyna, and Chen
Summary
The Federal Circuit affirmed the district court’s holding that the disclosure-dedication doctrine applies here to bar application of the doctrine of equivalents and, accordingly, the Slayback’s generic products do not infringe the Eagle’s four patents.
Details
Slayback filed new drug application (“NDA”) for a generic version of Eagle’s branded bendamustine product, BELRAPZO®. Bendamustine is used to treat chronic lymphocytic leukemia and indolent B-cell non-Hodgkin lymphoma. Eagle sued Slayback for infringing four patents in the District Court for the District of Delaware. Eagle’s four asserted patents share essentially the same written description. One of the four patents is U.S. Patent No. 9,572,796 (“the ’796 patent”), which has a representative claim 1 as shown below:
1. A non-aqueous liquid composition comprising: bendamustine, or a pharmaceutically acceptable salt thereof;
a pharmaceutically acceptable fluid comprising a mixture of polyethylene glycol and propylene glycol, wherein the ratio of polyethylene glycol to propylene glycol in the pharmaceutically acceptable fluid is from about 95:5 to about 50:50; and
a stabilizing amount of an antioxidant;
. . . .
In the district court, Slayback conceded that its generic product literally infringes all limitations of claim 1 except for the “pharmaceutically acceptable fluid” limitation. Slayback uses ethanol instead of propylene glycol (PG) in its generic product. Eagle argued that the ethanol in Slayback’s product is insubstantially different from the propylene PG in the claimed composition and, accordingly, Slayback’s product infringes under the doctrine of equivalents.
Slayback moved for a judgment of non-infringement on the pleadings under Federal Rule of Civil Procedure 12(c). Slayback argued that the disclosure-dedication doctrine barred Eagle’s claim of infringement under the doctrine of equivalents because the asserted patents disclose, but do not claim, ethanol as an alternative solvent to PG. Eagle counter-argued that the disclosure-dedication doctrine does not apply here because the asserted patents do not disclose ethanol as an alternative to PG for the claimed embodiment that contains an antioxidant. In fact, the specification only discloses ethanol when discussing unclaimed embodiments that contain chloride salt. Specifically, the asserted patents disclose three distinct “categories” of bendamustine formulations: (i) chloride salt formulations; (ii) antioxidant formulations; and (iii) dimethyl sulfoxide (“DMSO”) formulations. The specification only discloses ethanol as an alternative to PG when discussing the unclaimed chloride salt formulations; and it never discloses ethanol as an alternative to PG when discussing the claimed antioxidant formulations. Eagle also submitted an expert declaration from Dr. Mansoor Amiji in support of its opposition. Nevertheless, the district court held for Slayback because the asserted specification expressly and repeatedly identifies “ethanol” as an alternative “pharmaceutically acceptable fluid” to PG.
The federal circuit affirms the district court’s holding. The disclosure-dedication doctrine does not require the specification to disclose the allegedly dedicated subject matter in an embodiment that exactly matches the claimed embodiment. Instead, the disclosure-dedication doctrine requires only that the specification disclose the unclaimed matter as an alternative to the relevant claim limitation. That is, the disclosure-dedication doctrine requires disclosure of alternatives only at limitation level, not at embodiment level. In this case, the asserted patents disclose ethanol as an alternative to PG in the “pharmaceutically acceptable fluid” claim limitation. The specification repeatedly identifies—without qualification—ethanol as an alternative pharmaceutically acceptable fluid. Aside from the description of certain exemplary embodiments, nothing in the specification suggests that these repeated disclosures of ethanol are limited to certain formulations, or that they cannot extend to the claimed formulation.
Eagle also challenges the district court’s decision from the procedural grounds. Eagle argues that the district court erred by resolving that factual dispute at the pleading’s stage without drawing all reasonable inferences in Eagle’s favor. The federal circuit held that the district court has discretion to consider evidence outside the complaint for purposes of deciding whether to accept that evidence and convert the motion into one for summary judgment. In this case, the district court decided that Eagle was trying to fabricate a factual dispute and Slayback is entitled to judgment in its favor as a matter of law.
Take away
- The disclosure-dedication doctrine applies at limitation level, not at embodiment level.
- A patent drafter should be careful that the scopes of claims are consistent with the disclosure of specification to avoid inadvertent disclosure-dedication.
Tags: disclosure-dedication doctrine > doctrine of equivalent > patent infringement
PETITION DENIED: AI MACHINE CANNOT BE LISTED AS AN INVENTOR
Sung-Hoon Kim | May 21, 2020
In re Application of Application No. 16/524,350 (“Devices and Methods for Attracting Enhanced Attention”)
April 27, 2020
Robert W. Bahr (Deputy Commissioner for Patent Examination Policy)
Summary:
The PTO denied a petition to vacate a Notice to File Missing Parts of Nonprovisional Application because an AI machine cannot be listed as an inventor based on the relevant patent statutes, case laws from the Federal Circuit, and the relevant sections in the MPEP. The PTO did not find the petitioner’s policy arguments persuasive.
Details:
This application was filed on July 29, 2019. Its Application data sheet (ADS) included a single inventor with the given name “DABUS[1]” and the family name “Invention generated by artificial intelligence.” The ADS identified the Applicant as the Assignee “Stephen L. Thaler.” Also, a substitute statement (in lieu of declaration) executed by Mr. Thaler was submitted, and an assignment document executed by Mr. Thaler on behalf of both DABUS and himself was submitted. Finally, an “Inventorship Statement,” which stated that the invention was conceived by “DABUS” and it should be named as the inventor, was also submitted.
Afterward, the PTO issued a first Notice to File Missing Parts on August 8, 2019, which indicated that the ADS “does not identify each inventor by his or her legal name,” and an surcharge of $80 is due for late submission of the inventor’s oath or declaration.
Mr. Thaler filed a petition on August 29, 2019, requesting supervisory review of the first Notice.
The PTO issued a second Notice to File Missing Parts on December 13, 2019. The PTO dismissed the petition filed on August 29, 2019 in a decision issued on December 17, 2019.
Mr. Thaler filed a second petition on January 20, 2020, requesting reconsideration of the decision issued on December 17, 2019.
Relevant Statutes cited by the PTO
35 U.S.C. §100(f):
The term “inventor” means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.
35 U.S.C. §100(g):
The terms “joint inventor” and “coinventor” mean any 1 of the individuals who invented or discovered the subject matter of a joint invention.
35 U.S.C. §101:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
35 U.S.C. §115(a):
An application for patent that is filed under section 111 (a) or commences the national stage under section 371 shall include, or be amended to include, the name of the inventor for any invention claimed in the application. Except as otherwise provided in this section, each individual who is the inventor or a joint inventor of a claimed invention in an application for patent shall execute an oath or declaration in connection with the application
35 U.S.C. §115(b):
An oath or declaration under subsection (a) shall contain statements that … such individual believes himself or herself to be the original inventor or an original joint inventor of a claimed invention in the application.
35 U.S.C. §115(h)(1):
Any person making a statement required under this section may withdraw, replace, or otherwise correct the statement at any time.
The PTO’s reasoning
Citing the above statutes, the PTO found that the patent statutes preclude the petitioner’s broad interpretation that an “inventor” could be construed to cover machines. That is, the PTO asserted that such broad interpretation could contradict the plain reading of the patent statutes.
The PTO also cited the case law from the Federal Circuit to dismiss the petitioner’s argument. For example, in Univ. of Utah v. Max-Planck-Gesellschajt zur Forderung der Wissenschajten e. V (734 F.3d 1315 (Fed. Cir. 2013), the CAFC held that a state could not be an inventor. In Beech Aircraft Corp. v. EDO Corp. (990 F.2d 1237 (Fed. Cir. 1993), the CAFC held that “only natural persons can be ‘inventor.’”
Furthermore, the PTO cited the relevant sections in the MPEP to support their position. The PTO indicated that the MPEP defines “conception” as “the complete performance of the mental part of the inventive act” and it is “the formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is thereafter to be applied in practice.” The PTO asserted that the use of terms such as “mental” and “mind” indicates that conception must be performed by a natural person.
The PTO rejected the petitioner’s argument that the PTO should take into account the position adopted by the EPO and the UKIPO that DABUS created the invention, but DABUS cannot be named as the inventor. The PTO indicated that the EPO and the UKIPO are interpreting and enforcing their own laws.
The PTO also rejected the petitioner’s argument that inventorship should not be a substantial condition for the grant of patents by arguing that “inventorship has long been a condition for patentability.” The PTO rejected the notion that the granting of a patent for an invention that covers a machine does not mean that the patent statutes allow that machined to be listed as an inventor in another patent application.
Finally, the petitioner provided some policy considerations to support his position: (1) this would incentivize innovation using AI systems, (2) would reduce the improper naming of persons as inventor who do not qualify as inventors, and (3) would inform the public of the actual inventors of an invention. The PTO rejected the petitioner’s policy considerations by arguing that they do not overcome the plain language of the patent statutes.
Takeaway:
- At this point, it appears that it is not possible to list an AI machine as an inventor in the U.S. patent applications. The EPO reached a similar decision in December. It is known that the Japanese Patent Act and the Korean Patent Act do not include an explicit definition of an inventor. Also, the Chinese State Council called for “better IP protections to promote AI.”
- Congress needs to work on this issue because the patent system is in place to incentive innovation in technology, and eventually, increase investment for more jobs.
- A lack of patent protection for inventions developed by AI would decrease investment in the development and use of AI.
- However, there is a concern, among other things, that the PTO may not be able to deal with situations where AI created enormous amount of prior arts to be reviewed by the Examiners.
- Human programmer of AI or the one who defined the task of AI machine could be listed as the named inventor.
[1] DABUS stands for “Device for Autonomous Bootstrapping of Unified Sentience.” Mr. Thaler asserts that DABUS is a creativity machine programmed as a series of neural networks that have been trained with general information in the field of endeavor to independently create invention. In addition, Mr. Thaler asserts that this machine was “not created to solve any particular problem and not trained on any special data relevant to the instant invention.” Furthermore, Mr. Thaler asserts that this machine recognized “the novelty and salience of the instant invention.”
Tags: 35 U.S.C. §100 > artificial intelligence > conception > DABUS > inventorship > Petition
