Patent Law Developments: The Big Shifts You Need to Know

Here’s a summary of some of the top patent law developments in the last year.

Artificial Intelligence and Patents

In November, as Reuters reported, the US Patent and Trademark Office (USPTO) issued new guidelines on when inventions created with the help of generative artificial intelligence (“GenAI”) can be patented.

USPTO Director John Squires said that the Patent Office considers GenAI tools to be "analogous to laboratory equipment, computer software, research databases, or any other tool that assists in the inventive process."

According to a statement by Squires,

[GenAI tools] may provide services and generate ideas, but they remain tools used by the human inventor who conceived the claimed invention. When one natural person is involved in creating an invention with the assistance of AI, the inquiry is whether that person conceived the invention under the traditional conception standard.

The USPTO reiterated that a GenAI tool can’t, in itself, be considered an inventor.

In 2023, the US Supreme Court declined to hear a challenge by computer scientist Stephen Thaler to the USPTO’s refusal to issue patents for inventions created by his AI system.

Software and Business Methods Patents

Rideshare Displays, Inc. v. Lyft, Inc.

The Patent Trial and Appeal Board (PTAB, or Board) found that Rideshare’s initial patent claims related to helping rideshare passengers and drivers identify each other in crowded areas, such as airports, were unpatentable.

The Federal Circuit found that the technology was patent-ineligible because it did not “fundamentally alter or improve the way the technology itself functions.” The court explained that the technology was streamlining a physical process by “invoking a computer merely as a tool.”

United Services Automobile Association v. PNC Bank N.A

The Federal Circuit reversed a finding that USAA’s patent for a “Digital Camera Processing System” for remote check deposits was valid, concluding the asserted claim was not patent eligible.

The court found that “the asserted claim is directed to the abstract idea of depositing a check using a handheld mobile device” rather than via specialized equipment.

The court rejected USAA’s argument that its patent claims should be viewed “as a whole, considering the ordered combination of elements,” because the court found all of these elements “well-known and routine.”

Recentive Analytics, Inc. v. Fox Corp.

The Federal Circuit affirmed a finding that Recentive’s four machine learning patents were subject matter ineligible.

The court found that “[b]oth sets of patents rely on the use of generic machine learning technology in carrying out the claimed methods for generating event schedules and network maps.” In contrast, the machine learning technology itself was not claimed by the patentee, was entirely “conventional,” and lacked any improvements on the existing technology.

Obviousness

Merck Serono S.A. v. Hopewell Pharma Ventures, Inc.

The Federal Circuit affirmed that Merck’s claimed patents were unpatentable as obvious over a combination of prior art under pre-America-Invents-Act (AIA) rules.

The patents at issue covered a regimen for administering oral medications for multiple sclerosis.

Merck conducted clinical trials in partnership with a manufacturer, Ivax. Two Ivax employees filed for an international patent (“the Bodor patent”) disclosing a particular dosing regimen.

Merck filed its own patent applications for dosing two months later.

The Board found Merck’s claims unpatentable as obvious over prior art, including the Bodor patent.

Merck argued that the Bodor patent should be precluded as prior art because one of its own employees was an unlisted co-inventor on the Ivax patent.

The Federal Circuit affirmed, reiterating that

when the patented invention is the result of the work of joint inventors, the portions of the reference disclosure relied upon must reflect the collective work of the same inventive entity identified in the patent to be excluded as prior art.

Eye Therapies v. Slayback

The Federal Circuit reversed a PTAB determination in an inter partes review (IPR) proceeding that the patentee’s claims were unpatentable as obvious.

The court held that the intended meaning of the phrase “consisting essentially of” in this patent differed from its ordinary meaning.

The case involved a patent for a method of reducing eye redness via topical application of a solution “consisting essentially of” brimonidine.

Eye Therapies used the phrase “consisting essentially of” rather than “comprising” during patent prosecution to avoid anticipation by an earlier patent that used brimonidine along with another active ingredient.

The Federal Circuit held that the prosecution history “strongly evince[d] a restrictive meaning” of the phrase “consisting essentially of,” noting that Eye Therapies had “persuaded the examiner of the novelty of the claims by underscoring the absence of other active ingredients in the claimed methods.”

Expert Testimony in Patent Cases

EcoFactor, Inc. v. Google LLC

The Federal Circuit overturned a $20M Google verdict, holding that the trial court had abused its discretion and prejudicially erred by failing to exclude the patentee’s expert testimony on damages as unreliable.

Looking at EcoFactor’s evidence, the court concluded that the licenses the expert cited “were insufficient, individually or in combination, to support his conclusion that prior licensees agreed to the $X royalty rate.”

The licenses could be relevant to show what the patent licensor would have accepted, but not what a willing licensee would pay.

The decision stressed that the evidence cited by an expert needs to support the expert’s conclusions.

International Trade and Patents

Lashify, Inc. v. International Trade Commission

The Federal Circuit vacated the International Trade Commission's (ITC) finding that Section 337 of the Tariff Act had not been violated because the economic prong of the “domestic industry” requirement failed.

The court clarified that the “employment of labor or capital” required by Section 337 includes sales, marketing, warehousing, distribution, and quality control expenses, not just costs related to domestic manufacture.

This could expand the scope for IP cases at the ITC.

Design Patents

Top Brand LLC v. Cozy Comfort Co. LLC

Top Brand sought a declaration of noninfringement of Cozy Comfort’s design patent for oversized hooded sweatshirts, and Cozy Comfort counterclaimed for infringement.

The Federal Circuit held that the utility patent doctrine of prosecution history disclaimer also applies to design patents, such that a patentee could “surrender claim scope of a design patent” either by amendment or by argument.

In re Floyd

The Federal Circuit affirmed the Board’s rejection of a design patent application directed to a cooling blanket.

The court held that the applicant’s earlier utility patent application didn’t provide adequate written description to afford priority to the subsequent design patent, such that the latter was anticipated by the former.