2019 was another milestone year in intellectual property law that resulted in hundreds of decisions by the courts and Patent Trial and Appeal Board (PTAB) that will affect your company's litigation, patent prosecution or business strategy. This special report on patents discusses some of the most important cases from 2019 from the US Supreme Court, the US Court of Appeal for the Federal Circuit and the PTAB.

On January 22, 2019, the Supreme Court addressed in Helsinn Healthcare S.A. v Teva Pharmaceuticals, USA, Inc. the question of whether, under the America Invents Act (AIA), an inventor's sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention. In a unanimous decision authored by Justice Clarence Thomas, the Supreme Court concluded that such a sale qualifies as prior art.

Also, in the Supreme Court's highly anticipated opinion in Iancu v. NantKwest, the Court struck down the US Patent and Trademark Office (USPTO) policy that automatically demanded repayment of its legal bills, finding that it was against the centuries-old "American Rule," which requires US litigants to pay their own attorney fees.

2019 also saw the USPTO's and Federal Circuit's application of §315(b) time bar statue. On January 24, 2019, the PTAB found that an inter partes review (IPR) petition was time barred because an unnamed real-party-in-interest (RPI) and privy of the petitioner had been served with a complaint more than one year earlier. Ventex Co., Ltd. v. Columbia Sportswear North America, Inc., Case No. IPR2017-00651 (PTAB Jan. 24, 2019) (Cocks, APJ). The PTAB determined that structured, pre-existing, contractual and well-established business dealings between entities can create an RPI relationship, and made the unnamed party a privy of the petitioner. In another precedential decision, the PTAB dismissed a petition for IPR, finding that the one-year time limit for filing an IPR petition under § 315(b) is triggered even if a party serving a district court complaint alleging infringement lacks standing to sue. GoPro, Inc. v. 360Heros, Inc. Relying on the Federal Circuit's 2018 decision in Click-to-Call v. Ingenio, the PTAB found that service of a pleading asserting a claim of infringement triggers the one-year time period for a petitioner to file a petition, even where the serving party lacks standing to sue or where the pleading is otherwise deficient. Further, although § 315(d) provides that "the determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable," the en banc Federal Circuit held that a decision to institute an IPR after finding that the § 315(b) time bar did not apply was appealable.

Although the Federal Circuit tried to clarify patentability under 35 U.S.C. §101 by issuing several precedential decisions, it is still difficult to know with certainty what is considered patent eligible subject matter these days. In Athena Diagnostics, Inc. v. Mayo Collaborative Services, the Federal Circuit addressed the subject matter eligibility of diagnostic methods based on underlying natural laws, finding them invalid notwithstanding the Federal Circuit's acknowledgement of the claims' recitation of "certain concrete steps." Along the same lines, the Federal Circuit found claims directed to methods of identifying and detecting a biomarker to be directed to patent-ineligible natural law. –( IP Update Vol. 20, No. 8) In contrast to the diagnostic methods that the Court has declared invalid on several occasions, the Federal Circuit has been willing to find method-of-treatment claims, employing a specific method on specific patients or subjects using a specific compound at specific doses to achieve a specific outcome, patent eligible. See e.g., Natural Alternatives Int'l, Inc. v. Creative Compounds, LLC, Case No. 18-1295 (Fed. Cir. Mar. 15, 2019); Endo Pharmaceuticals Inc. v. Teva Pharmaceuticals USA, Inc. Similarly, in the field of computer technology, a divided panel of the Federal Circuit held that a claimed method for monitoring and analyzing a computer network was directed to an improvement in computer capability, not an abstract idea. SRI International, Inc. v. Cisco Systems, Inc. Relying on the Court's Enfish opinion, the majority explained that the claimed technology provides a network defense system that monitors network traffic in real time to automatically detect large-scale attacks, thus providing a "specific asserted improvement in computer capabilities." In its analysis, the Court explained that the challenged claims were not directed to using a computer as a tool, but instead were directed to improving the technical functionality of the computer and computer networks by reciting a specific technique for improving computer network security.

To help alleviate some confusion in view of the recent Federal Circuit decisions, the USPTO issued the revised 2019 Patent Subject Matter Eligibility Guidance, as well as an update issued on October 18, 2019. The update is similar to the 2019 PEG and includes additional examples applying the subject matter eligibility test. While the USPTO guidance is useful, especially in the context of prosecution, practitioners should not assume, especially in the context of enforcement actions, that a claim similar to one designated as patent eligible in the PTO guidance will survive a § 101 challenge.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.