A U.S. Supreme Court's 2014 decision that abstract ideas implemented with a computer are not eligible for patenting has been cited to invalidate scores of patents, often early in litigation on motions for dismissal or summary judgment. The new Federal Circuit decisions reversed some of those rulings, making such victories for accused infringers harder to come by. Patents are invalid under Alice if they cover abstract ideas and do not transform them into something more than "well understood, routine and conventional activities." According to the Federal Circuit's new rulings, that inquiry can involve factual questions that preclude finding invalidity on early dispositive motions, meaning such cases may have to go to trial.
The Federal Circuit decisions also have ramifications for patent prosecution, where attorneys should consider including declarations from inventors about how the invention improves technology and goes beyond what is routine to aid future infringement cases, said Mr. Schwarz.
"Patent prosecutors can help the chances of a patent surviving a motion to dismiss during enforcement by including ample descriptions of the technological improvements in the application itself," he said.
In Arthrex Inc. v. Smith & Nephew Inc., the appeals court affirmed a PTAB decision entering adverse judgment against Arthrex after it gave up the rights to a suture patent challenged by Smith & Nephew in an inter partes review, meaning that estoppel attached. It rejected Arthrex's argument that the disclaimer meant the review should have ended without an adverse judgment, which would not implicate estoppel.
Patentees whose patents are challenged at the PTAB often have pending applications on similar subject matter, and triggering patent owner estoppel by disclaiming the claims at the board could cause headaches for those applications and possibly result in their being rejected.
"The main takeaway for patent owners is the need to be aware of the possibility of estoppel taking effect against the patents you still have in the pipeline and to take steps to avoid the impact of estoppel," Schwarz said.