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U.S. v. Arthrex: Is Historical Practice of the USPTO Relevant?

Reported by James Lovsin at JD Supra

If the Supreme Court determines that the appointment of administrative patent judges to the PTAB is currently unconstitutional, the Supreme Court will likely have to find a remedy. While the Federal Circuit proposed severing part of the AIA, the Supreme Court could consider historical practice at the USPTO when constructing a solution. James Lovsin highlights this aspect of oral arguments where Smith & Nephew’s attorney pointed out that the APJs are part of a “patent-specific tradition” that goes back to 1836. While history and tradition carry some weight at the Supreme Court, Lovsin indicates that reliance on those factors here is misplaced.

Just as Smith & Nephew noted that the appointment of administrative patent judges was “until now unchallenged,” so too was the clear error standard of review for USPTO fact finding for over 50 years before Zurko.  The USPTO argued in Zurko that the APA trumped historical practice.

For similar reasons, Smith & Nephew’s reliance on a “patent-specific tradition” appears misplaced.  Since at least eBay Inc. v. Mercexchange LLC, 547 U.S. 388 (2006), the Supreme Court has sought to avoid patent law diverging from other areas of the law.

For more information, see our coverage.

Apple Faces Dubious Federal Circuit on Patent Ownership Argument

Reported by Perry Cooper at Bloomberg Law

The Federal Circuit heard oral arguments in Omni MedSci, Inc. v. Apple, Inc. on Thursday for a rare interlocutory appeal of the lower court’s ruling on Omni MedSci’s standing. Perry Cooper recaps the arguments in this case where Omni MedSci alleges that the Apple Watch infringed its patents on health-related sensors. Apple argues that the inventor of the patents automatically assigned the patents to his former employer, the University of Michigan, due to language in his contract. The Federal Circuit honed in during arguments on the words “shall be property of the university.”

“It’s very clear through our case law over and over again if you say something in the present tense in the active voice, ‘I hereby assign, I hereby grant,’ everybody will understand that is an automatic assignment,” Chen said. But “shall be” is an agreement to assign in the future, he said.

While the Federal Circuit seemed to read the language as warranting a future assignment, the University of Michigan argued in an amicus brief that the language in the contract indicated that the patents were automatically assigned.

For more information, see our coverage.

Federal Circuit on TM Licensing: We’re Going to Enforce the Terms

Reported by Dennis Crouch at Patently-O

In Authentic Apparel Group v. United States, the Federal Circuit ruled that the Army acted within its discretion granted by its licensing agreement with Authentic Apparel Group. Dennis Crouch summarizes the opinion in the case where Authentic Apparel challenged the Army’s refusal to allow Authentic Apparel to make certain clothing items. The Federal Circuit determined that the language “sole and absolute discretion” supported the Army’s decision. Other provisions in the contract also denied Authentic Apparel any remedy for the Army’s refusal.

Authentic argued that the Army has an obligation of good faith and fair dealing in its contracting, and that complete enforcement of these covenants would contravene those principles.  On appeal, the Federal Circuit agreed that it would be improper for the Army to act in an arbitrary or bad-faith manner when denying approval.

The Federal Circuit also disagreed with Authentic Apparel’s other arguments regarding the identification of the Army as the source of the goods and the decorative use of the Army’s mark.

For more information, see our coverage.