Archive for the ‘Patent Law – Current Issues’ Category


Patent Licensing Agreements: Ensuring They Won’t Thwart the Patentee’s Rights to Damages in a Later Patent Infringement Lawsuit

Attorneys often categorize themselves as either only transactional or only litigation attorneys. The fact is that legal documents, whether drafted by a transactional attorney specifically retained to draft an agreement or “grabbed off” the Internet, may become the subject matter” of a lawsuit, either directly as in a breach of contract claim or indirectly as where an agreement fails to properly address statutory requirements pertinent to the contact.   The latter situation is discussed in the Federal Circuit Court of Appeal’s Feb. 19, 2020 decision in Arctic Cat, Inc., v. Bombardier Recreational Products, Inc.

Arctic Cat is the owner of two patents directed towards thrust steering systems for personal watercraft (“PWCs”). Although it initially sold the inventions before the patents had issued, Arctic Cat later entered into a license agreement with Honda for several patents including the PWC patents.  Somewhere along the licensing negotiating process, the provision requiring Honda, as the licensee, to mark all licensed patented products with the applicable patent numbers was deleted.  The final version even expressly stated that Honda had no marking obligations.  This provision was contrary to the requirements of 35 U.S.C. § 287 and case law involving the interpretation of that statute.

Section 287(a) provides in pertinent part:

Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into United States, may give notice to the public that the same is patented . . . by fixing thereon the word “patent” . . . . In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

The notice provision of § 287 does not apply to patents directed to processes or methods. Nor does it apply if a patentee never makes or sells a patented article; such a patentee may recover damages even absent notice to an alleged infringer.  On the other hand, the patentee who either directly sells the patented article or indirectly introduces into the market through a licensee, cannot collect damages until it either begins providing notice or sues the alleged infringer.  Any resultant damages are limited to the period after notification.  A patentee can cure the marking dilemma by beginning to mark (or have the licensee mark) its products in accordance with § 287.

The public policy behind § 287 is threefold: to (1) help avoid innocent infringement; (2) encourage patentees to give public notice that the article is patented; and (3) aid the public to identify whether an article is patented.   Arctic Cat at 8 citing Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1443 (Fed. Cir. 1998).   Failure of a patentee to inform the public that an article is patented is deemed problematic because of its potential to mislead others into believing they are free to make and sell an article that is actually patented and then finding themselves on the receiving end of a patent infringement lawsuit.

The statute also actually provides incentive to the patentee to sell marked products so as to maximize its damages in any subsequent patent infringement lawsuit by a “knowing” infringer. That is, the marking statute imposes notice obligations on the patentee.  Whether or not the alleged infringer may have had mere knowledge that unmarked patented articles were actually patented is irrelevant.  A patentee who does not comply with the marking statue cannot later claim entitlement to “willful infringement” damages without establishing that the alleged infringement had been put on proper notice.

The duty to mark is not limited to the patentee but is also imposed on any licensee or assignee. Arctic Cat at 6.   The licensing/assigning patentee has to demonstrate that it made reasonable efforts to ensure any third parties’ compliance with § 287 to the satisfaction of the court.  Inexplicably, the licensing agreement between Arctic Cat and Honda expressly stated that Honda had no obligation to mark the patented PWCs.   As such, in its later filed infringement lawsuit, Arctic Cat was in no position to argue that it had made reasonable efforts to ensure labeling.  The “wrong” provision included within the patent licensing agreement with Honda executed years before proved fatal from a damages maximization perspective.

And this begs the question:  Who drafted that licensing agreement and why was the original provision referencing marking deleted?  Did Arctic Cat’s authorized representative understand the implications of what he was signing?  Did its transactional attorney explain the consequences?

From our perspective, the Arctic Cat decision drives home the point that a faulty transactional agreement may well mess up a party’s rights in a future lawsuit.  Faulty agreements can range from unartful, overly verbose, and ambiguous wording to provisions that are inexplicably contrary to federal and/or state statutory requirements and public policy.  The latter should never happen at least when a transactional attorney is involved.  Any such attorney must have a thorough understanding of the legal area the agreement involves to determine how much latitude may be incorporated into the agreement without running afoul of governing law.  Failure to do so denotes sloppy work.

The commentator handles both legal disputes involving intellectual property rights including patents and drafts and negotiates complex licensing and assignment agreements.  In my opinion the preferred approach to drafting these and other types of agreements is to draft with an eye toward future litigation whether between the parties to the agreement or a third party as in the Arctic Cat case.  Such agreements should also be drafted by an attorney with experience in the subject matter.

Considering licensing your intellectual property? Contact us to see how we can provide value to you or your company from drafting the licensing agreement from scratch through negotiating the draft (or a previously existing draft) with the other party to the agreement.  Our services including taking care to explain the agreement in detail to our clients and providing a summary of the agreement’s provision to provide for ready reference.  


© Troy & Schwartz, LLC 2020

Where Legal Meets Entrepreneurship™





Maintaining Registered Trademarks & Patents – Do It or Lose Your Rights!

  • Background

So you or your company have met the requirements for receiving a registered trademark or patent from the United States Patent and Trademark Office (USPTO). Your efforts to obtain these valuable intellectual property rights (especially for the patent) involved considerable costs ranging from legal fees to filing fees charged by the USPTO and maybe even an appeal. Does your success in obtaining a registered trademark or a patent mean that your “interaction” with the USPTO is now over and done with? Not if you wish to retain your trademark registration and patent rights!

Both registered trademark rights and patents require the payment of maintenance fees to the USPTO to maintain their “active” status. Additionally, the owner of registered trademarks must also establish periodically that the mark is still in use to enjoy the benefits of registration. Patents, on the other hand, need never be practiced to enjoy continuing patent rights during the effective patent term providing the maintenance fees are timely paid.

Unfortunately, many patent and registered trademark owners are not aware of the ramifications of failing to pay maintenance fees until it’s too late. This article summarizes important information related to maintaining the active status of registered trademarks and issued patents.

  • Maintenance of Registered Trademarks

The USPTO is required to strictly comply with the federal statute governing registered trademark maintenance fees.  Failure to timely pay the maintenance fees will result in administrative cancellation of the mark by the USPTO. These fees are due within the 5th and 6th years of registration, the 9th and 10th years of registration and every 10th year thereafter. Once cancelled as the result of non-payment of the required maintenance fee, the only way to again acquire registration rights in that mark is to file another trademark application and go through the prosecution process again.

This new trademark prosecution process may not necessarily result in registration of the mark that had been cancelled. This commentator encountered such a scenario with a client who had inadvertently failed to pay the maintenance fee by the 6th year of registration on a valuable registration originally obtained by the client. The commentator was retained to file a new application for the cancelled mark. The new examining attorney initially refused registration of the mark as being merely descriptive despite the fact that the same mark had once been registered. The commentator was able to obtain registration of the mark on distinctiveness grounds.

Proving distinctiveness to the satisfaction of the USPTO is no easy task as the case law demonstrates and can be a very costly endeavor because of the legal fees. The commentator’s client would have appealed any final rejection by the examining attorney to the Trademark Trial and Appeal Board (TTAB) because of the value of mark. Appeals are expensive and time-consuming. Additionally, statistics available for TTAB decisions show that examining attorneys’ rejections are affirmed more often than not. Hence another reason for ensuring that trademark registration fees are timely paid to prevent a situation where a new examining attorney may conclude that the “re-filed” mark does not qualify for registration.

In addition to paying the maintenance fee, the mark owner must file documentation with the maintenance fees declaring that the mark is still in use and provide specimens proving as such. As long as the declaration and specimens are filed according to the above specified schedule and the declaration/specimens meet the requirements USPTO’s requirements, the registered trademark will remain in effect with three exceptions: (1) it becomes cancelled as the result of a cancellation proceeding filed with the TTAB by a third party; (2) it becomes cancelled as the result of a trademark infringement lawsuit in federal court wherein the court issues an order directing the USPTO to cancel the mark; or (3) it is voluntarily cancelled by the registrant, the mark’s current owner, or the registrant/owner’s legal representative. See 37 U.S.C. § 1904.07(a).

Registered trademarks that end up being cancelled by the USPTO for any statutory reason will be designated as cancelled in the records of the USPTO. Registered trademarks may also be cancelled by a federal court to which a party (petitioner or registrant) in a TTAB cancellation proceeding has appealed the TTAB’s cancellation decision.

The actual trademark registration maintenance fees due are dependent upon the number of international classes designated for the registered trademark. If the trademark owner is no longer using the mark with one more of the designated classes in a multi-international class registration, then the declaration should indicate as such and request deletion of the “inactive” classes of goods/services. The payment due is based on the number of “remaining” classes and the registrant must provide specimens showing how the mark is still being used with the “remaining” classes.

A registered mark may remain in effect indefinitely providing declarations/fees are timely submitted to the USPTO and accepted and assuming that the registered mark is not cancelled as the result of one of the above three specified scenarios. That is, there is no statutory “cut-off” period for enjoying registered mark status.

  • Maintenance of Patents

Maintenance fees on utility patents in the United States are due 3½, 7½ and 11½ years after grant of the utility patent. In contrast to many other countries, no maintenance fees are due while a US patent application is pending.  Maintenance fees are not required for design patents and plant patents.

Patents have a defined lifetime generally equal to twenty (20) years from the application’s filing date; the actual expiration date is determined under the patent term extension statute where the 20 year date may be adjusted to a later or earlier date according to the patent’s prosecution history. Patents therefore have a cut-in-stone expiration date while registered trademarks may last indefinitely.

Patent maintenance fees may not be paid in advance; the patentee must wait until the payment window opens six months before the due date before paying a maintenance fee. At the end of the half-year window during which a maintenance fee may be paid, a six-month grace period begins during which a patentee may still pay the maintenance fee along with a small surcharge. The maintenance fees are determined on the basis of the patentee’s designated status: large entity, small entity, or micro entity. This status must be reasserted with the payment of each maintenance fee.

If the maintenance fee has not been paid at the conclusion of the grace period, the patent expires for non-payment of maintenance fees. In contrast to trademark registrations for which the declaration/maintenance fee was not timely filed, a patentee may file a petition indicating that the non-payment was unintentional. This petition must be timely filed and there is no guarantee that the petition will be granted and the expired patent reinstated.

Patent claims may be invalidated as the result of proceedings involving the USPTO’s Patent Trial & Appeal Board (PTAB) (see 35 U.S.C. § 311) or by federal court order resulting from: (1) a patent infringement case wherein the alleged infringer successfully argues that at least some of the patent claims should be invalidated; or (2) an appeal of a PTAB decision to the court. As long as an issued patent has claims that are not invalidated as the result of proceedings before the PTAB or a federal court, maintenance fees will be due.

  • Assignment of Registered Trademarks and Patents

The assignee of any registered trademark or patent rights will generally assume the responsibility of paying any future maintenance fees as the mark owner and filing the required declaration/specimens. Any assignment document should always specify which party has the obligation to pay the maintenance fees. Assignees should always ensure that any assigned trademark registration or patent is full effect and that the assignor is indeed the legal owner of an “active” trademark registration or patent. Recordation of any trademark or patent assignment with the USPTO is highly recommended. Licensors of trademarks and patents are generally responsible for paying the maintenance fees, but any licensing agreement should nevertheless clearly state who has the obligation to do so. The licensor remains the owner of the registered mark or patent.

  • Ensuring that Valuable Registered Trademark and Patent Rights Are Not Lost for Failure to Maintain

Large companies generally have procedures in place for monitoring the status of their trademark and/or patent intellectual property. The in-house legal team, if any, is generally involved in monitoring the “active” status of the company’s IP.

Startups and small companies, on the other hand, often do not have a formal mechanism in place for ensuring that the future required maintenance fee dates are adhered to.  Furthermore, these time periods occur over a period of many years and can easily be “forgotten.” It is thus highly recommended that any entity owner of any registered trademark and/or patent adopt a procedure for annually reviewing the status of its intellectual property by designated managers/officers to ensure that maintenance dates are kept on the radar. Additionally, a department and/or employee should be assigned the responsibility of ensuring compliance with registered trademark and patent maintenance fee/document filing requirements by the due date. Payments/filings are preferably made “earlier” rather than “later.” Proof of payment/document filings should be maintained with the other records associated with the corresponding patent or registered trademark.

For registered trademarks, either in-house counsel or outside counsel should be consulted if there are any questions concerning the declaration/specimen documents that will need to be filed with the USPTO to ensure that the registration status will remain in effect. The USPTO will reject declarations that do not meet statutory requirements, including establishing that the declaration filer is the owner of the registered mark.

  • A Brief Comment on Copyright and Trade Secret Lifetimes

Although not discussed above, registered copyrights enjoy decades of protection under the copyright statute and maintenance fees are not required. Trade secret protection can last for decades or far beyond the lifetime a patent providing, of course, that the trade secret remains just that – secret. The best example of a long-time trade secret is the formulation for Coca Cola.


The foregoing is not legal advice but is provided for information only. Contact the office to receive a complimentary checklist for monitoring the status of your valuable IP at The commentator is available to assist clients in obtaining and maintaining intellectual property rights protection as well as protecting their valuable intellectual property from the unauthorized use by others at a predictable, reasonable legal fee.

© Troy & Schwartz, LLC 2019

Where Legal Meets Entrepreneurship™


Assuming a Patent Application’s Effective Filing Date Is Always Equal to Its Claimed Priority Date – A Trap for the Unwary


Many of the recent decisions concerning patent claim validity have focused on whether or not the claims cover inventions meeting the requirements for subject matter eligibility under § 101 since the infamous Alice decision. This commentator has blogged on that very topic and her blog on the Enfish decision appeared at in 2016.    This blog will focus on some of the other points of patent application preparation that may crop up during an infringement proceeding and prevent the patentee from prevailing.  These points apply to all patent applications no matter what the subject area.

A May 2017 opinion granting the defendants’ motion for summary judgment resulting in claims invalidation is a good reminder that the specification is a critical aspect of a patent application to establish that the inventor had possession of the invention at the time the application was filed.  The patentee’s specified claim of priority to an earlier filed application may not necessarily be the effective filing date if the earlier application’s specification is found to be “invention disclosure” deficient.   Losing a priority date for reasons discussed below may well result in a situation where previously unconsidered intervening prior art is fair game during a claim invalidation proceeding.

In D Three Enterprises, LLC  v. Rillito River Solar, LLC and Sunmodo Corp., case no. 15-cv-1148 (D. Colo. 2017), the district court invalidated several of D Three’s claims in two patents at the summary judgment stage of the lawsuit because the claims were not supported by the application’s original provisional application disclosure.  Although D Three had filed two separate lawsuits, the defendants filed joint motions for summary judgment.  It is not clear why the cases were not consolidated.

The D Three court went to great lengths to point out that the written description requirement under § 112(a) is distinct from the enablement requirement.  Under § 112(a), “]t]he application’s specification shall contain a written description of the invention and of the manner and process of making and using it, in such full, clear, concise and exact terms as to enable any person skilled in the art to which pertains . . . to make and use the same.”  The written description is intended to establish that the inventor was in possession of the invention as of the filing date sought.   D Three Court citing Ariad Phar., Inc. v. Eli Lily & Co., 598 F.3d 1336, 1340 (Fed. Cir. 2010). This requirement is achieved through descriptive means as words, structures, figures, diagrams, formulas, etc. that set forth the claimed invention.”  D Three opinion citing Moba, B.V. v. Diamond Automation, Inc., 325 F.3d 1306, 1319 (Fed. Cir. 2003).

Furthermore, all limitations expressed in actual claims must appear in the specification.  The Federal Circuit has interpreted this requirement to mean that the written description must actually or inherently disclose the claim element according to the jurisprudence of the Federal Circuit on which the D Three court relied.  Where, for example, a provisional patent application is involved, this jurisprudence requires that “one skilled in the art, reading the provisional patent application must reasonably discern the limitation at issue in the challenged claims within the original disclosure.   “If the asserted claims describe an invention that ‘is an obvious variant of that which is disclosed in the [earlier] specification,’ or ‘renders obvious the invention for which an earlier filing date is sought,’ that is insufficient.”  D Three opinion citing Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1007).

The D Three case was complicated by the fact that the chain of applications starting with a 2009 provisional patent application included a continuation-in-part application (“CIP”).  A CIP application may include subject matter that appears for the first time in the CIP application.  Any claims derived from this additional subject matter are not entitled to any earlier application.  Any patent resulting from a CIP application may have claims with two different effective filing dates – a date for a previously filed application and the filing date of the CIP.

This blog will review the many issues addressed in the opinion and the court’s responses.  The district court’s opinion itself is worth a read because it provides a “real world” scenario of how “text book” procedures can become important considerations in a patent infringement case.   Moreover, these issues and the court’s detailed analysis provide a good reminder of patent law principles and just how difficult it can be to write an application that will withstand future challenges to validity.  It is noted that the court emphasized claim invalidation must be based on clear and convincing evidence or, as the court put it, the court must be convinced that invalidation of the suspect claims is appropriate.

Three D appealed the decision to the Federal Circuit.   The Federal Circuit affirmed the district court’s opinion in May 2018.

Take home points are presented at the end of the blog.


Issue:  Is claim validity assumed if the USPTO did not question the validity of a claimed earlier effective filing date?

Plaintiff’s argument:  The claims at issue were allowed by the USPTO and awarded an effective filing date corresponding to the filing of a provisional application in a long chain of applications.  As such the challenged claims were entitled to a presumption of validity.

Court’s Response:  There is no presumption that a patent is entitled to an earlier filing date.  The presumption that claims are valid rests on the merit of claims based on their novelty and non-obviousness according to the prior art and meet the requirements for subject matter eligibility. Here, the plaintiff could not present evidence showing a decision by the PTO or the Board of Patent Appeals and Interferences regarding whether the specified effective filing date are to be presumed valid.

Issue:  Can select limitations from the specification’s preferred embodiments be imported during a patent invalidation proceeding to render previously approved claims invalid? 

Plaintiff’s and Defendants’ Positions:  The defendant argued that the suspect claims were broader than the original provisional patent application’s disclosure.  The plaintiff argued that the defendants were trying to import select limitations from the disclosed preferred embodiments described in the specification.

Court’s Response:  The plaintiff was misreading sections 120 and 112.  The question is not whether the broad scope of plaintiff’s claims should be limited to its disclosed preferred embodiments.  The question under well-settled patent law is whether the Plaintiff’s applications (particularly the very first 2009 application) describe inventions at least equal in breadth to the asserted claims.  If not, then the asserted claims were not entitled to the earlier effective filing date.   That is, the inventor cannot claim what was not disclosed.

Issue:  Do “comprising” claims mean that the claims are not actually excluding unidentified elements (i.e., elements not actually in the claim)?  Do such claims nevertheless include an element, in this case a washer, that was not mentioned in the claim?

Court’s Response:  The court opined that the at-issue claims were broad enough to include a soft washer or not.  However, even with “comprising” claims, the inventor must be able to locate within the written description the information which support the full scope of the “comprising” claim.  That is, comprising claims are not exempt from the written description requirement according to the case law of the Federal Circuit which was cited by the D Three court.

Issue:  Are an application’s figures sufficient to disclose an invention when the narrative description itself if incompleteHere the original 2009 application disclosed an assembly for roof mounts with and without soft washer.   However, the 2009 application only disclosed one invention that lacked a washer.  Most of the disclosed embodiments included a soft washer.

Court’s Response.  The court found that the 2009 application’s narrative description did not suggest that the figures were incomplete or that a soft washer was included in each and every Figure.  The court found that certain Figures in the 2009 application did not include a washer.   The application therefore had disclosed an assembly both with and without a washer.

Issue:  Is the “phrase incorporated by reference” sufficient for establishing that a later filed application is entitled to the earlier application’s filing date?

Court’s Response.  Here is where things became tricky.  The answer is yes, this phrase will generally include all that was previously disclosed as long as the instant specification is itself consistent with what was previously disclosed.  The court found that a later filed 2011 application properly incorporated 2009 and 2010 applications by reference and that the incorporation included both the washerless and washer-including assemblies.  The beginning with the 2012 application, the specification suggested that the washer was “in all embodiments” and “regards only the embodiments in the subset of figures under discussion.  The commentator notes that the referred-to Figures were 10-14- 21-22, 25a-b and 27 a-c.  The washerless assembly had been depicted in Figures 27-33 and 41 in the 2009 application.  The court found that the plaintiffs’ application ambiguous as to whether the plaintiff intended to abandon the washerless assembly disclosed in 2009 in its 2012 application.

Issue:  Is an application depending from an earlier filed application entitled to its asserted claims if these claims are broader than what was originally disclosed?

Court’s Response. The inventor had disclosed one type of attachment bracket for the washerless assembly.  The asserted claims were not limited to this type of attachment bracket –  a W-shaped prong and face seat.   The 2009 application and each intervening application disclosed three types of attachment bracket: support post, W-pronged, and T slide.  The W-pronged bracket was the only attachment bracket that the application disclosed as being bolted through the flashing either with or without a washer.  Therefore the asserted claims were broader than what was disclosed and were not entitled to the effective 2009 filing date because the inventors did not possess a washerless assembly other than the one requiring the W-pronged attachment bracket.  Here, the disclosure of one species (the W-pronged bracket) was not found to support the asserted claim of three brackets (i.e., a genus claim).

IssueWhat if the positioning of a component as claimed in the original application differs from the disclosed positioning of the component as claimed in a later application claiming priority to the original application?  Here the original 2009 disclosure disclosed a washer positioned above the sheet member. In the intervening applications, the assemblies had a washer placed either above the sheet member or both above and below the sheet member.

Court’s Response.   Switching the location of the soft washer would eliminate the lack of support in the original 2009 application with one exception – one skilled in the art would discern from the 2009 application that the plaintiff had invented an assembly where the disclosed soft washer could be positioned in other locations of the assembly. Here, the plaintiff could offer no evidence to meet the exception.   As such, the filing dates for the two patents in suit were actually the filing dates of the applications directly preceding the two issued patent documents and not the 2009 application.

Issue:  Do the effective filing dates of Sept. 4, 2013 and Oct. 2, 2014 (and not Feb. 8, 2009) render the “problematic” claims invalid?

Court’s Response: It is axiomatic that “[t]hat which infringers if later, anticipates if earlier.” Three D court quoting SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1321 (Fed. Cir. 2006).  Here, the the first public sale dates [by both defendants] were earlier than the effective filing dates of the challenged patents.   The defendants’ alleged infringing products were first sold in 2009 and 2010, or several years before the actual effective filing dates of the patents in suit.

The court concluded that the defendants had meet the burden of providing by clear and convincing evidence that the asserted claims were not entitled to the 2009 filing date.

Take Home Points

  1. Adequate disclosure of the invention in the written description and drawings is essential to ensure that a later filed application’s claimed priority date is also the later filed application’s effective filing date.
  2. Adequate disclosure in the specification is required to support claim validity. A too broad of claim not supported by the specification’s disclosure either in an instant application or one relying on incorporation by reference of an earlier filed application may be subject to invalidation in a patent infringement lawsuit.
  3. When relying on “incorporation by reference to an earlier application,” be careful to not inadvertently abandon the earlier invention.
  4. Develop a strategy for filing multiple applications. Although not discussed in this blog, the D Three case briefly discussed how published patent publications under § 122 may serve as invalidating prior art if they are published before the “true” effective filing date of a later-filed application by the same applicant.
  5. Consider developing a patent application filing strategy to minimize the types of situations D Three faced and ultimately could not overcome.

© 2018 by Troy & Schwartz, LLC





Claim Construction and the Importance of Claim Wording

Part II of a Blog Series on Obviousness Issues Arising in Post Grant Proceedings

Netlist, Inc. v. Diablo Technologies, Inc. – A Case Study on Claim Construction in Post Patent Grant Proceedings

DecidedJuly 25, 2017 by the U.S. Court of Appeals for the Federal Circuit


The first blog in this blog series on the obviousness standard for securing a patent and having it withstand post-grant proceedings discussed the case of Soft Gel Technologies, Inc. v. Jarrow Formulas, Inc. Inc.  There the Federal Circuit Court of Appeal affirmed the Patent Trial and Appeal’s Board’s (“Board”) finding in a reexamination proceeding that claims in three of Soft Gel’s patents were invalid on obviousness grounds under § 103.  The conclusion was reached on the basis of the combination of five (5) prior art references including two patents, a published handbook in the associated field, a dissertation, and a publication by the World Health Organization.  The Board and the Federal Circuit both concluded that it would have been obvious to one skilled in the art to try and use a specific isolate (d-limonene) from lemon oil as a dissolving agent for CoQ10.  This commentator agreed with the decision because of the extensive prior art which provided a rational timeline for understanding the existing knowledge in the field at the time the patent applications were filed.

This blog discusses the Federal Circuit Court of Appeal’s decision on July 25, 2017 in Netlist, Inc. v. Diablo Technologies, Inc.  Here, the Board had invalidated several claims in two patents owned by Netlist, Inc. “(“Netlist”) in an interpartes review proceeding (IPR) on obviousness and anticipation grounds.  The Federal Circuit vacated the Board’s opinion concerning certain of the invalidated claims and remanded the matter.

The decision is of interest because it demonstrates how tricky it can be to decipher the actual meaning behind a claim’s wording.   The IPR proceeding involved claim construction issues meaning the claims underwent an “interpretative” analysis by the Board to determine what exactly did certain wording in the claims mean.  The Soft Gel case did not involve claim construction issues because the claim wording was relatively straight forward with no issues over the meaning behind claim terms.

As the Netlist decision demonstrates, different claim interpretations can result in different conclusions concerning the validity of the claim(s) according to the prior art.  Here the Federal Circuit found that the Board’s invalidation of certain of the claims in Netlist’s two patents was based on a flawed interpretation of those claims by the Board.

Discussion of the Opinion

Claim construction which really means claim interpretation can be a critical aspect of any proceeding involving the potential invalidation of a claim.  Claim interpretation issues also arise during patent prosecution because interpretation of the claim’s wording can in turn have an effect as to how prior art is applied to determine if a claim should be allowed.   Claims from patent prosecution to IPR proceedings to court proceedings must be construed according to their broadest reasonable construction.  Netlist court citing Cuozzo Speed Techs, LLC v. Lee, 136 S. Ct. 2131, 2144 (2016).

Several of the claims at issue in Netlist included the wording “a circuit configured to be mounted on a memory module.”  The Board had construed this phrase as meaning “a circuitry configured to be mounted on at least a portion of a memory module.”  Netlist argued that its original claim wording meant the entire circuit must be mounted on a single memory module.  Furthermore, allowing any portion to mounted elsewhere would undermine the ability to easily swap out memory modules in the computer system.  Slip opinion at 4-5.

The Board disagreed with Netlist.  And this is where it is important to understand the intersection between claim language and the specification.   Upon appeal of the Board’s decision, the Federal Circuit found that Netlist failed to show why the claim term “mounted” requires that the entire circuit be mounted on the memory module rather than a portion of the circuitry.  The specification itself did not discuss any such limitation.  Furthermore, Netlist could not provide any compelling reason why the claims should be read to limit to embodiments to those with a “swapping out memory module” feature.   As such, the reasonable construction of these claims was that the word mounted did not apply to the entire memory module.  Unfortunately for Netlist, the phrase “entire circuit” was not stated in the claim or discussed anywhere in the specification.  Also, the patents themselves had broadly defined circuit as a term that includes “a configuration of electrical components or devices.”  In other words, Netlist had used the broad, well-known definition of circuit in its applications which subsequently ended up in the issued patent claims. Slip opinion at 4-5.  As such, the Board’s claim construction was reasonable and the Federal Circuit affirmed the Board’s invalidation of the associated claims.

Several of Netlist’s claims also featured the wording “selectively electrically coupling.” The Board construed the wording to mean “making a selection between at least two components so as to transfer power or signal information from one selected component to at least the other selected components.”  The “selective electronic coupling” claims actually were more specific by stating in part “selectively electronically coupling the first data signal line to the common data signal line and selectively electronically coupling the second data line to the common data signal line . . . Slip opinion at 3 and claim 15 of Patent No. 7,881,150.

Netlist argued that the proper construction of the claims’ wording was “coupling in response to a selection.”  Netflix also argued that the Board’s claim instruction would result in a situation that could not work because “selectively electronically coupling” cannot occur in circuits where the first/signal data lines share a hard-wired connection with a common data signal line.  Slip opinion at 5.

The Federal Circuit agreed with Netlist that the claims specified exactly which two data lines must be coupled and that the Board’s interpretation of what was a clearly worded claim was unreasonable.  The Federal Circuit also emphasized that the claims were not limiting “selectively electrically coupling” to a switch or other specific component or that the term necessarily preludes a hard-wired connection.   However, there still may be prior art problems for Netlist concerning whether prior art circuits perform selective electrical coupling even under Netlist’s own construction.   It is now up to the Board to address prior art issues again involving “selectively electrically coupling” using Netlist’s own claim construction.

Finally, the Federal Circuit found that the Board had also misconstrued the wording “selectively isolating” as “making a selection between at least two components and not transferring power or signal information from one selected component to the other selected component” in one of the patents but as “electrical separation of a selected component from another component.”   That is, although both patents used the same term, the Board construed them differently.  Netlist contended that the term actually means “isolate/isolating in response to a selection” just as the term “selectively electrically coupling” meant “coupling in response to a selection.” Slip opinion at 6 and 7.

The Federal Circuit found that the Board’s claim construction for “selectively isolating” was flawed primarily because it relied on its flawed construction of “selectively electrically coupling.”  Furthermore, the record was unclear as to how the Board actually interpreted and applied the two different constructions for the “selectively” isolating claims.  On remand the Board must construe “selectively isolating/isolate” in view of the correct construction for “selectively electrically coupling” adopted by the court.


The Netlist case demonstrates how claim construction can be a difficult endeavor and result in both reasonable an unreasonable interpretations.   Netlist’s patents had met patent prosecution requirements only to then face invalidation under an IPR.  The specificity in the “selectively electrically coupling” and “selectively isolating/isolate” claim wording helped save the day for Netlist at least temporarily.   For the claim construction where the Federal Circuit agreed with the Board’s claim construction, the usage of the word “entire” may also have resulted in a different outcome. Or stating within the specification that the claim including the term “circuit configured to be mounted on a memory module” is limited to embodiments where memory modules can be swapped out.  Slip opinion at 5.  Perhaps the unstated limitation was always the intent behind the now-invalidated claim.  Nevertheless, if not in writing somewhere in the issued patent document, then for the purposes of claim construction, the patentee’s intended meaning may well not “enter into” the claim construction process where a claim term/phrase is open to reasonable interpretation.    And any future claim construction involving claims in an issued patent may result in invalidation of the  “reconstructed” claims as being unpatentable over the prior art as the Netlist opinion demonstrates.

Stay turned for a future blog on the Board’s decision following its reconsideration of the claims involving “selectively electrically coupling” and “selectively isolating/isolate.”


© 2017 by Troy & Schwartz, LLC








Soft Gel Technologies, Inc. v. Jarrow Formulas, Inc. – A Case Study on How the Combination of Prior Art References Can Result in the Invalidation of a Patent on Obviousness Grounds.

Obviousness and Patentability – A Series of Blogs on Recent Court Decisions

#1 – Soft Gel Technologies, Inc. v. Jarrow Formulas, Inc. – A Case Study on How the Combination of Prior Art References Can Result in the Invalidation of a Patent on Obviousness Grounds.

Decided:  July 26, 2017 by the Federal Circuit Court of Appeals


With the onslaught of software patent claim invalidations since the Alice decision, it might be easy to forget that patent claims can also be invalidated on the basis of prior art and not just as the result of subject matter ineligibility under §101.  In fact some software patents that have been invalidated on subject matter ineligibility grounds could also just well have been invalidated on prior art grounds under §102 (anticipation) and §103 (obviousness) as some federal courts have opined.  This series of blogs will discuss the recent court decisions involving obviousness considerations for non-software patents/applications.   See, e.g., YYZ v. Hewlett Packard, et al., U.S. Dist. Court for Dist. of Del., no 1:2013 cv 00136.

In the inter partes patent reexamination matter of Soft Gel Technologies v. Jarrow Formulas, Inc., the Patent Trial and Appeal Aboard (“Board”) had invalidated three patents involving methods for solubilizing CoQ10, a naturally-occurring substance that is sold as a dietary supplement.  As with both dietary supplements and pharmaceuticals, the formulation can be of critical importance in ensuring that the “effective” substance is absorbed by the body and does not simply pass through the gut.  CoQ10 or ubiquinone is a coenzyme that is necessary for certain metabolically processes and for the production of cellular energy.  The typical adult’s CoQ10 levels decrease with age and certain prescription drugs such as statins may also contribute to decreases in this important coenzyme’s levels.

The Board found claims in three patents issued Soft Gel Technologies (“SGT”) to be invalid on obviousness grounds and the Federal Circuit affirmed the Board’s decision.  The decision is a reminder of how the combining of prior art references is fair game in finding that an invention is obvious over the prior art at whether at the application prosecution stage or during a reexamination proceeding.   Also, prior art is not limited to published patent documents in and outside the U.S. but can include non-patent documents such as a technical handbooks, a dissertation, and/or scientific papers.  The appellate court’s decision is also reminder that prior art references may not come to light during patent application prosecution but instead after a patent has actually issued.

CoQ10 is a hydrocarbon with a very limited solubility in aqueous solvents.    At the time SGT filed its patent applications, CoQ10 as a supplement either had to be administered as a tablet in solid form or in a suspension of solvents designed to partially dissolve CoQ10 according to the patent disclosures.  Either way, only a small percent of CoQ10 would actually enter the blood stream.   And solubility problems can reduce a supplement’s effectiveness by limiting its bioavailability once ingested.

SGT’s patents claimed d-limonene, a monoterpene, as a suitable solvent for CoQ10 to increase its bioavailability.   The dissolved CoQ10 could then be formulated as an ingestable caplet or soft gelatin capsule containing the CoQ10-d limonene solution.

The Prior Art

Unfortunately for SGT, the reexamination proceeding revealed several prior art references including a patent issued to Motoyama in 1982, a patent issued to Khan and Nazzal in 2009 (2001 provisional patent priority claim), and a dissertation authored by Nazzal in 2002 showing that the solubility of CoQ10 in at least some monoterpenes was well known before the SGT had applied to its patents.  All three references noted the poor solubility of CoQ10 in aqueous (water-based) solvents and posited that better solubility could be achieved with lipids or oils including monoterpenes.  Montoyama’s patent disclosed that CoQ10 is highly soluble in a particular monoterpene known as carvone, found in spearmint oil and peppermint oil.

The Nazzal/Khan patent recognized that oils, by themselves, would not be soluble in the body’s aqueous fluids but that emulsifiers could be added to disperse the oil-CoQ10 mixture as small “nano-emulsion” droplets.  Nazzal and Khan tested various essential oils including peppermint oil, spearmint oil, and lemon oil, as solvents.   Mixing of CoQ10 with these oils was found to lower the co-enzyme’s melting point to a temperature closer to the body temperature of 37° C.  Such an effect was desirable to facilitate the absorption of “melted” CoQ10 by the body.

The above two patent prior art references did not specifically refer to d-limonene as a CoQ10 solvent.  Nazzal’s dissertation on the solubility of CoQ10 in monoterpenes, however, concluded with suggestions for further studies to study the “[c]hemical components of essential oils such as limonene, menthone, and carvone . . . for their potency in lowering the melting point of CoQ10.” Slip opinion at 10.

In addition to the three foregoing references, the Board relied on a reference handbook from 1975 that characterized lemon essential oil as a substance with many different components of which  limonene constituted about 90% of the composition.  The Board also relied on an article published by WHO’s International Agency for Research Cancer.  The article stated that limonene is the most frequently occurring natural monoterpene and that the “d form comprises 98-100% of the limonene in most citrus oils.”  Slip opinion at 10.

The Board combined the five references to invalidate all of the claims in one of SGT’s patents and most of the claims in the other two patents.

Patent law allows the combining of prior art references to find that an invention would have been obvious to one skilled in the art.  There are, however, certain criteria that the patent office must adhere to in finding that the combined references establish the obviousness of the invention.  These include a showing that any one of the references does not actually teach away from the claimed invention and that a person of ordinary skill in the art would have had a reasonable expectation of success regarding the combination.  Upon appeal, SGT argued that the Board had wrongly concluded that the three patents were obvious over the prior art because: 1) Khan’s patent did in fact teach away from the claimed invention; 2) a person of ordinary skill would not have had a reasonable expectation of success in using lemon oil as a solvent for CoQ10; and 3) limonene is not the main monoterpene constitute of lemon oil.

SFT’s arguments did not pass muster with Federal Circuit.  This commentator notes that although SGT presented various arguments that had some semblance of truth at first blush, a full reading of the references relied on by the Board showed that SGT’s arguments were often specious. For example, it challenged the Board’s factual finding that d-limonene is the main constituent of lemon oil despite the information articulated in the handbook and WHO references that had been relied on by the Board.  The scientific article reference presented by SGT to overcome the handbook and WHO references at the appellate proceeding provided the results of 19 samples of lemon oil specifies where the d-limonene content varied from 38.1 % to 95.8%.  In 17 of the samples, d-limonene made up more than half of the composition of the samples and even the author of the article concluded that “[l]imonene was always the main constitute . . . of all oil[]” samples.  Slip opinion at 12.  The court concluded that even SGT’s own reference established that d-limonene is the main component of lemon oil.

SGT also purported that the Khan patent taught away from SGT’s inventions because different melting profiles had been obtained for a lemon oil-emulsifier mixture relative to the peppermint and spearmint oil emulsifier mixtures.  In actuality the “best” melting profile from a supplement-bioavailability perspective was obtained with the lemon oil mixture because only the lemon oil mixture remained a liquid at the body temperature of 37°C even at high emulsifier concentrations.  The court concluded that these results established that lemon oil provided the best performance [i.e., solubility of CoQ10] among the tested essential oils, not that it behaved in an entirely different manner from the other essential oils and therefore taught away from the invention.  Slip opinion at 14.

The court further stated that “[n]on-obviousness cannot be established by attacking references individually where the rejection is based upon the teachings of a combination of references.” See In re Merck & Co., 800 F.2d 1091, 1097 (Fed. 1986).

SGT did not help its cause by asserting that the legal standard for obviousness required “absolute predictability” rather than “a reasonable expectation of success.”  This assertion was totally contrary to patent law jurisprudence.  As SGT’s argument went, Dr. Khan’s later research presented in a 2004 published journal article after the filing of the patent application in 2001 was conducted because it must not have been obvious to him that the lemon oil results in his earlier experiments were attributable to d-limonene.

As discussed above, the Khan patent had disclosed only lemon oil and not d-limonene.  The court pointed out that the non-identification of d-limonene in the 2001 patent does not mean that a person of skill would not expect d-limonene, the main constituent of lemon oil, to work as a CoQ10 solubilizer.  Slip opinion at 16.  As the court pointed out, “[a] supplement study does not imply lack of awareness of the likely result; rather studies are frequently conducted to confirm what is suspected to be true.”  This commentator adds that follow-up studies are part of the scientific process for proving a hypothesis, confirming earlier results, etc.  Indeed as the court stated, “studies are frequently conducted to confirm what is suspected to be true.”


It is always disheartening for any patentee to have any patent claims invalidated as the result of prior art.  In this case the multiple underlying references from patents to scientific articles to handbooks when taken together were sufficient establishing that the solubilizing effect of d-limonene, the major component of lemon oil, on CoQ10 would have been obvious to one of ordinary skill in the art.  The outcome might have been different had the patents claimed a specific mixture of monoterpenes that even further maximized the solubility of CoQ10 relative to individual monoterpenes or if the patents had claimed, for example, a chemically modified monoterpene that further enhanced the solubility of CoQ10 relative to unmodified monoterpenes.

Here the claims were relatively easy to understand given their chemical nature and claim interpretation was not difficult.   It is also not surprising that the Board’s decision, based on the combination of many references, was affirmed.  The prior art was reasonably viewed as “bridging” the knowledge from Motoyama’s 1982 patent concerning monoterpenes and their effect on CoQ10 solubility to what was understood about the “d-limonene makeup” of the monoterpene lemon oil at the time SFT’s patent applications were filed.

Next Blog

The next blog in this series of “obviousness” blogs will discuss the Federal Circuit’s decision in Netlist, Inc. v. Diablo Technologies, Inc. where the court found that the Board had not properly met the burden of establishing obviousness over the prior art because the wording in the claims was open to interpretation.  This case is a good example of how wording and definitions can either make or break a patent application or save patent claims from invalidation.

© 2017 by Troy & Schwartz, LLC