For those of you wanting to register “immoral” or “scandalous” trademarks, 2019 was your year. However, for those of you seeking to patent merely a natural law or abstract idea, not so much. And for those of you wanting to shield your patents from certain reexamination practices with your state sovereign immunity, tough luck.

Here, we look back at 5 interesting cases of 2019 in patent and trademark law, selected because we find them interesting and hope you do too. At least, you should, since their relevance extends beyond the bubbly ball drop.

Case Summary: 

1 – Iancu v. Brunetti: Can the PTO refuse registration of “immoral…or scandalous” trademarks?

2 – Athena v. Mayo: Can inventors patent a standard way of observing a newly discovered natural law?

3 – Cleveland Clinic Foundation v. True Health Diagnostics: Can PTO guidance rescue diagnostics patents from the quagmire of patent ineligibility due to “natural law”?

4 – Chargepoint v. SemaConnect: Does PTO guidance address patent ineligibility of “abstract ideas” successfully?

5 – Regents of the University of Minnesota vs LSI Corporation: Does state sovereign immunity apply for inter partes review?


1. Iancu v. Brunetti, 139 S. Ct. 2294 (2019)

What’s at stake: Can the PTO refuse registration of “immoral…or scandalous” trademarks?

This case is about an F-word, namely FUCT, that paved the way for approval of previously rejected “immoral” or “scandalous” trademark registrations…as well as hilarious headlines about the ruling.

Background:

Erik Brunetti, an artist and entrepreneur, founded a clothing line using the trademark FUCT, which he of course pronounced one letter at a time, but may be pronounced a few other ways. When knock-offs appeared for sale, he sought trademark registration with the PTO.

However, the PTO denied registration under the Lanham Act, the federal statute governing trademarks. Specifically, the PTO denied Brunetti’s trademark application Serial No. 385310960, for “children’s and infant’s apparel, namely, jumpers” under provision 15 U.S.C. § 1052(a), which permits the PTO to refuse registration of a trademark that “[c]onsists of or comprises immoral…or scandalous matter.” Tired of being Fully and Unjustly Cept from his Trademark, Brunetti decided to fight.

Outcome:

The Supreme Court decided on June 24, 2019 that the PTO’s practice of refusing to register trademarks deemed “immoral…or scandalous” violates the First Amendment in restricting applicants’ freedom of speech.

In this decision, the Court opined that the PTO’s practice discriminates on the basis of viewpoint; somewhat arbitrarily, the PTO has allowed registration of some trademarks and barred others based on particular points of view, particularly at the level of individual trademark examiners. The Court’s decision opened the floodgates for approval of trademark registrations that previously may have been rejected as “immoral” or “scandalous.”

*Editorial note. The case paved the way for our registration of “Sh*t Like a Man. Smell Like a Legend®” for a client marketing Toilet Elixirs®.

How this fits with legal precedent:

This aligns with Matal v. Tam, 137 S. Ct. 1744 (2017). In this case, an Asian-American rock band appealed to the Supreme Court after the PTO denied a trademark registration on the mark “The Slants”. The band said the mark reclaimed an offensive slur, but the PTO denied registration based on 15 U.S.C. § 1052(a), the same paragraph at issue in Brunetti,  which also contains a provision permitting the PTO to bar registration of “disparag[ing]” trademarks.

The Supreme Court found that this provision is viewpoint-based, disfavoring certain ideas and thus infringing the First Amendment right to freedom of speech. Thus, between Brunetti and Tam, several provisions of 15 U.S.C. § 1052(a) violated the First Amendment and are no longer exercised.

*Editorial note. Examiners don’t make good gatekeepers. For example, the following table shows the arbitrariness of marks that were allowed vs rejected as disparaging under § 1052(a) leading up to Tam:

Rejected as Disparaging Allowed as…Not Disparaging?

N.I.G.G.A. (Naturally Intelligent God Gifted Africans)

N.W.A. (Niggaz Wit Attitudes)

Squaw Valley

Stinky Gringo

The Christian Prostitute

Dykes on Bikes

Amishhomo

Celebretards

Have you heard that Satan is a Republican?

The Devil is a Democrat

 

Favorite quote from Opinion of the Court:

“…the ‘immoral or scandalous’ bar is substantially overbroad. There are a great many immoral and scandalous ideas in the world (even more than there are swearwords), and the Lanham Act covers them all. It therefore violates the First Amendment.”

Where do we go from here?

In the same way you can copyright porn, it seems you can trademark just about anything as long as you are using the word / logo / slogan / sensory input as a source identifier in the stream of commerce. We predict that future cases will target other limitations, such as the ban on registration of religious symbols.


2. Athena v. Mayo, 915 F.3d 743 (Fed. Cir. 2019) 

What’s at stake: Can inventors patent a standard way of observing a newly discovered natural law?

Many point out that this decision and others like it reduce incentives for R&D of medical diagnostics; results from these diagnostics factor into critical decisions in life-changing clinical practice, so reduced R&D incentives make an enormous impact on healthcare practice and expenditures. While this case is complicated and steeped in judicial precedent, it’s well worth probing for its wide impact.

Background:

Athena Diagnostics, Inc. (“Athena”) is the exclusive licensee of the patent under fire (“patent ‘820”), and after Mayo Collaborative Services, LLC developed similar tests, Athena accused them of patent infringement. The inventors of patent ‘820 discovered a link between patients with neurological disorder Myasthenia gravis (“MG”) and muscle-specific tyrosine kinase (“MuSK”) protein, an important molecule that aids transmission of signals from neurons to muscles.

Patients with MG generate autoantibodies, or antibodies recognizing a person’s proteins as foreign, that recognize MuSK. Thus, the inventors discovered a correlation between naturally-occurring MuSK autoantibodies in the body and MuSK-related diseases like MG.

Subsequently, they developed and claimed a method of diagnosing disorders such as MG by detecting MuSK in bodily fluid. In summary, one could say the inventors patented a standard way of observing a natural law.

More background:

To understand this decision, we need to dive into the U.S. Code and how it’s applied by the PTO and courts. Title 35 of the U.S. Code section 101 (“35 U.S.C. § 101”) governs patent subject matter eligibility of “…any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof…”

This means that lots of things are patentable, but what about laws of nature, natural phenomena, and abstract ideas? For these, various judicial actions have ruled they are not eligible for patenting, so they are considered judicial exceptions.

But what if the inventors claim significantly more than these judicial exceptions, adding some inventive concept? It turns out that claims to these judicial exceptions are patentable only if  the patent claims an additional inventive concept.

A two-part test called the Alice/Mayo test has been developed to determine patent eligibility under 35 U.S.C. § 101 based on both Alice Corp. v. CLS Bank, 573 U.S. 208 (2014), termed “Alice” as well as Mayo v. Prometheus, 566 U.S. 66 (2012), termed “Mayo”. Basically, the first step determines if the claim is to one of the judicial exceptions (laws of nature, natural phenomena, or abstract ideas). If yes, then the second step determines if claims provide an inventive concept above and beyond the judicial exception.

At the second step, if there is some extra inventive concept then the subject matter is patent eligible. If there’s nothing more than the judicial exception, then the subject matter is patent ineligible. Two steps to figure this out – simple, right?

Outcome:

The U.S. Court of Appeals for the Federal Circuit (“CAFC”) on February 6, 2019 invalidated the claims of patent ‘820 since they merely observe a natural law by an admittedly standard technique. Later, on July 3, 2019 the court denied Athena’s request for rehearing by all Federal Circuit judges, and included commentary from some judges criticizing the controversial 2012 Supreme Court decision in Mayo, one of the two decisions of the Alice/Mayo test. They say Mayo constrained their decision in Athena v. Mayo.

How this fits with legal precedent:

In Mayo, the Supreme Court invalidated patent claims correlating the relationship between metabolite concentration in the blood with the efficacy of a drug dose. They held these  and other claims to be unpatentable natural law.

The Mayo decision immediately threatened many issued patents and pending patent applications, arguably destabilizing patent law and reducing incentives to develop new diagnostic tools. Many argue this stunted innovation in biosciences and consequently harmed public health.

In the July 3 denial for rehearing of Athena v. Mayo, many Federal Circuit judges excoriated the potentially sweeping or overbroad reading of Mayo, expressing that the Mayo precedent constrained the court in Athena v. Mayo.

Favorite quotes from the July 3 denial for rehearing:

“If I could write on a clean slate…I would not exclude uses or detection of natural laws,” “…as long as the Court’s precedent stands, the only possible solution lies in the pens of claim drafters or legislators. We are neither,” “…the holding of Mayo may be overbroad,” and “Since Mayo, every diagnostic claim to come before this court has been held ineligible.”

Favorite quotes from Opinion of the Court:

“We consider it important at this point to note the difference between the claims before us here, which recite a natural law and conventional means for detecting it, and applications of natural laws, which are patent-eligible,” and “…we cannot hold that performing standard techniques in a standard way to observe a newly discovered natural law provides an inventive concept.”


3. Cleveland Clinic Foundation v. True Health Diagnostics, 18- 1218 (Fed. Cir. 2019)

What’s at stake: Can PTO guidance rescue diagnostics patents from the quagmire of patent ineligibility due to “natural law”?

As we saw above in Athena v. Mayo, application of the Mayo decision continues to stymie patent protection of diagnostics. In order to apply the law around the Alice/Mayo framework consistently, the PTO provides guidance for its personnel in evaluating subject matter eligibility. But can legal uncertainties around patenting natural law be overcome by this PTO guidance? 

Background:

The Cleveland Clinic Foundation and Cleveland Heart Lab, Inc. appealed a decision that invalidated claims of certain patents as claiming patent-ineligible natural law. The patents at issue disclose diagnostic tests for leukocyte and blood myeloperoxidase (“MPO”), a naturally occurring heme protein, in blood samples, correlating their levels with risk of cardiovascular disease (“CVD”).

Outcome:

On April 1, 2019 the CAFC affirmed the lower court’s ruling that the patents at issue claim only natural law without additional inventive concept, and thus claim patent-ineligible material as per the Alice/Mayo test. In response to the Cleveland Clinic’s argument that deference should be given to PTO guidance on subject matter eligibility, the CAFC declined to defer to PTO guidance.

How this fits with legal precedent:

The patents at issue are continuations of a parent patent in Cleveland Clinic v. True Health Diagnostics, 859 F. 3d 1352 (Fed. Cir. 2017). In this earlier ruling, the Court, citing Mayo, ruled that correlating MPO levels with CVD without any further inventive concept is patent-ineligible natural law (in keeping with the Alice/Mayo test).

Favorite quotes from Opinion of the Court:

“…laws of nature exist regardless of the methods used by humans to observe them. Inadequate measures of detection do not render a natural law any less natural,” and “While we greatly respect the PTO’s expertise on all matters relating to patentability, including patent eligibility, we are not bound by its guidance…we are mindful of the need for consistent application of our case law.”


4. ChargePoint, Inc. v. SemaConnect, Inc., 18-1739 (Fed. Cir. 2019)

 What’s at stake: Does PTO guidance address patent ineligibility of “abstract ideas” successfully?

The PTO guidance based on the Alice/Mayo framework is meant to bring clarity to patent eligibility of abstract ideas in addition to natural law addressed above, but does it?

Background:

ChargePoint inventors patented networked charging stations for electric vehicles. Their technology enabled central control of charging stations, identification of open charging stations remotely, and use of utility data to manage charging stations with the electrical grid effectively.

When Chargepoint sued SemaConnect for infringement and sought injunctive relief, the lower court held each asserted claim ineligible for patenting.

Outcome:

On March 28, 2019 the CAFC affirmed the lower court’s ruling that patent claims at issue were ineligible for patenting because they are merely an abstract idea. The Court determined that the invention is a network-controlled charging station, and thus an abstract idea of communicating over a network for device interaction.

In its decision, the Court noted the lack of technical details or explanation of how modifications occur; given the breadth of the claims, these patents would preempt the industry’s use of networked charging stations. In effect, this would shut out competitors from innovating around this abstract idea. On October 21, 2019, ChargePoint requested that the Supreme Court overturn this decision.

How this fits with legal precedent:

The Court employed the two-part Alice/Mayo test to determine that the invention is nothing more than an abstract idea, lacking an inventive concept. Many worry that this ruling has “swallowed all of patent law” by extending patent ineligibility to anything that “involves” or incorporates an abstract idea. If this is true, then many inventions are patent ineligible since abstract ideas are often the bedrock on which innovation stands.

Favorite quotes from Opinion of the Court:

“…the inventors here had the good idea to add networking capabilities to existing charging stations to facilitate various business interactions. But that is where they stopped, and that is all they patented,” and “…[claims] are all directed to the abstract idea of communicating over a network for device interaction. Communication over a network for that purpose has been and continues to be a ‘building block of the modern economy’.”

Where do we go from here?

Three out of five of these cases pertain to patenting natural law and abstract ideas. PTO guidance has not brought sufficient clarity to patent eligibility. Clearly something needs to be done, but who will do it? Given the uncertainties and since the “solution lies in the pens of claim drafters and legislators,” it’s critically important to file well-drafted patents.


5. Regents of the Univ. of Minn. v. LSI Corporation, 18-1559 (Fed. Cir. 2019)

What’s at stake: Does state sovereign immunity apply for inter partes review?

States are generally immune from being sued in federal court, but does their immunity extend to inter partes review (“IPR”)? 

Background:

First, what is IPR? This is a process that allows a third party to ask the PTO to reexamine patent claims in issued patents. The IPR is a mechanism for reexamining patents that may have been granted in error. The PTO issues patents in error given “an understaffed and overworked office trying to handle an ever increasing workload” (Sen. Birch Bayh).

In this case, the Regents of the University of Minnesota (”UMN”) requested, based on their state sovereign immunity, to dismiss a petition for IPR against their patents. This request was denied so UMN appealed. The several parties that petitioned for IPR did so after UMN sued them for infringement of several patents covering distinct technologies. 

Outcome:

On June 14, 2019 the CAFC concluded that state sovereign immunity does not apply to IPR proceedings.

How this fits with legal precedent:

This aligns with Saint Regis Mohawk Tribe v. Mylan Pharms, 2018 896 F.3d 1322 (Fed. Cir. 2018) (“Saint Regis”), which was decided while the Regents of the Univ. of Minn. v. LSI Corporation (“Regents”) appeal was pending.

In Saint Regis, Allergan sought to shield its patents from threat of IPR; Allergan entered into an agreement with Saint Regis Mohawk Tribe to assign, or transfer, patents to the tribe, which would use its tribal sovereign immunity to terminate the IPR.

The court held that tribal sovereign immunity does not bar IPR proceedings. In Saint Regis, the court did not address whether state sovereign immunity should be treated similarly, leaving this question open for consideration in Regents.

Favorite quote from Opinion of the Court:

“…[IPR] is in key respects a proceeding between the United States and the patent owner. In this way, these proceedings are not barred by state sovereign immunity since sovereign immunity does not bar proceedings brought by the United States.”

There you have it – hopefully you’ve found these cases as interesting as we do. We’re off to a new year with new cases to come, so stay tuned for more excitement in the world of patent law as we check in down the road.

Co-Author: Kevin Christopher

Andrew Lerner

Author Andrew Lerner

Patent Lead at Rockridge Venture Law // Innovation Fellow at UNC School of Pharmacy // Ph.D., UNC - Chapel Hill, Biochem/Biophysics // B.S. University of California, Berkeley // Veteran U.S.M.C. Russian cryptologist

More posts by Andrew Lerner

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