Reasonably Continuous Diligence Is Not Negated If an Inventor Works On Improvements or Evaluates Alternatives to the Claimed Invention

In ATI Technologies ULC v. IANCU, Appeal Nos. 2016-2222, -2406, -2608, the Federal Circuit held that diligence requires “reasonably continuous diligence,” and that diligence is not negated if the inventor works on improvements and evaluates alternatives while developing an invention.

LG Electronics, Inc. (LGE) requested an Inter Partes Review of patents owned by ATI Technologies ULC (ATI). ATI argued it conceived of its invention—a computer-implemented system that specified how a three-dimensional image is generated and presented on a two-dimensional screen—and constructively reduced it to practice before the asserted prior art. ATI presented a declaration purporting to show evidence of conception, reduction of practice, and diligence for its patents. The PTAB agreed with ATI that the date of conception was established before the primary reference dates. However, the PTAB nevertheless invalidated ATI’s patents, finding that ATI did not establish actual reduction to practice and diligence. The PTAB noted that ATI’s work included designing an optional unclaimed feature, and that ATI did not provide a way for the PTAB to determine whether unexplained lapses had not occurred.

The Federal Circuit reversed, finding that the PTAB erred in its application of the law of diligence when it required “continuous reasonable diligence” rather than “reasonably continuous diligence,” the established standard. Noting ATI’s almost 1300 pages of records, including metadata, document logs, and folder histories, the Federal Circuit noted that the documents corroborated reasonably continuous diligence. The Federal Circuit added that working on improvements and evaluating alternatives while developing an invention does not negate diligence. The purpose of the diligence requirement is to assure that the invention was not abandoned or unreasonably delayed. The PTAB did not cite or provide any evidence supporting a conclusion that ATI had abandoned or unreasonably delayed the invention.

Federal Circuit Upholds PTAB’s Ineligible Subject Matter Determination for Graphical User Interface that Aided Human Traders, But Did Not Improve Computer Functionality

In Trading Technologies Int’l, Inc. v. IBG LLC, Appeal No. 2017-2257, the Federal Circuit held that a graphical user interface that allows users to place orders for items (such as shares of stock) by moving icons onto displayed item prices is not patent eligible subject matter.

IBG and Interactive Brokers petitioned for Covered Business Method (“CBM”) review of claims from three patents owned by Trading Technologies. The patents covered graphical user interfaces (“GUIs”) for electronic trading. The Board held all of the challenged claims ineligible under 35 U.S.C. § 101. Trading Technologies appealed.

The Federal Circuit agreed that the challenged claims were ineligible. The claims covered various ways to initiate trades from GUIs in which market information is displayed on a graph. For example, the claims of one patent required (1) displaying bids and offers for an item on a graph, (2) allowing a user to move an icon onto the graph in order to (3) place an order for the item. Trading Technologies argued the claims recited eligible subject matter because the invention improved computer functionality compared to prior GUIs. The Federal Circuit disagreed, finding that the invention helped the human trader—not the computer—process information more quickly. The claimed GUI lacked an inventive concept because receiving and graphing price information was conventional, as was selecting and moving an icon on a screen. The Federal Circuit also declined to address the merits of Trading Technologies’ argument that CBM review violated the Seventh Amendment because Trading Technologies did not adequately brief the issue.

Federal Circuit Upholds PTAB’s Finding of Nonobviousness Based on Evidence of Skepticism

In Neptune generics, LLC, Fresenius kabI USA, LLC v. Eli Lilly & Co., Appeal Nos. 2018-1257, 2018-1258, the Federal Circuit held that industry skepticism is a question of fact that weighs in favor of non-obviousness and can range on a scale, with the most weight afforded to skepticism based on notions that the subject matter is technically infeasible, unworkable, or impossible.

Neptune and Fresenius (“Petitioners”) requested three Inter Partes Reviews (“IPR”) of a patent owned by Eli Lilly for the administration of chemotherapy to cancer patients. Before administering the chemotherapy agent, the patent claims require administering folic acid and a methylmalonic acid (“MMA”) lowering agent, such as vitamin B12, in order to reduce the toxic effects of the chemotherapy agent. The Board found that the Petitioners did not establish that the claims at issue were unpatentable for obviousness. The Board cited secondary considerations in support of its non-obviousness finding, including skeptical communications from the FDA regarding the clinical trials.

On appeal, the Federal Circuit affirmed the Board’s finding that the prior art did not provide a motivation for a skilled artisan to administer an MMA lowering agent. In support, the Federal Circuit found that the Board did not err in its consideration of Eli Lilly’s FDA communications. During clinical trials, the FDA stated that it did “not support adding vitamins to the ongoing . . . trial” and that “the addition of vitamins . . . is risky.” The Petitioners argued that the FDA’s concerns did not support a finding of skepticism because the FDA allowed the trials to continue. Petitioners argued that secondary considerations of “skepticism must be premised on whether it is ‘technically infeasible,’ ‘unworkable,’ or ‘impossible’ that the claimed subject matter would work for its intended purpose.” However, the Federal Circuit found that Petitioners’ argument was not consistent with case law, which “recognize[d] a range of third-party opinion that can constitute skepticism.” The Court held that “while evidence that third parties thought the invention was impossible might be entitled to more weight, that does not mean the Board erred in giving weight to the skepticism evidence here.”

Federal Circuit Affirms Patent-Ineligibility of Claims Directed to Displaying Financial Information on a Known Device

In Trading Technologies Intl v. IBG LLC, Appeal No. 2017-2323, the Federal Circuit held that claims directed to providing additional trading information on a prior art display, without more, are patent-ineligible under 35 U.S.C. § 101.

IBG and Interactive Brokers petitioned for CBM review of a Trading Technologies (TT) patent directed to providing new or different trading information via a trading screen. The Board held the patent met the statutory definition of a “covered business method” (CBM) patent and held all claims were patent-ineligible under 35 U.S.C. § 101. TT appealed both issues.

The Federal Circuit agreed that the patent met the definition of a CBM patent because the claims failed to provide a technical solution to a technical problem. In particular, the Federal Circuit held that providing new or different information to traders on a prior art trading screen “focuses on improving the trader, not the functioning of the computer.”

The Federal Circuit also affirmed the claims were patent-ineligible under § 101. Regarding step one of the Alice analysis, the claims were directed to an abstract idea because their “purported advance” was gathering, analyzing, and displaying market information without solving a technological problem. Regarding step two, the claims failed to amount to “significantly more” than an abstract idea because they merely added conventional information to a prior art trading screen.