Case Law Committee Meeting Summary - CalTech v. Broadcom

In Shaw, the CAFC limited estoppel to issues that were actually raised during an IPR. The CalTech panel said that the Supreme Court decision in SAS Institute made clear that Shaw “cannot be sustained.” The Case Law Committee had some difficulty following the panel’s reasoning. Rather than essentially reading “during” out of the statute, the panel could have reached the same result by giving “during” a broader meaning than it had in Shaw.

How Caltech will be applied going forward is less clear than it might be. The panel’s Feb. 4 decision extended estoppel “to all claims and grounds … which reasonably could have been included in the petition.” Its Feb. 22 errata decision narrowed this to “all grounds … which reasonably could have been asserted against the claims included.” However, the Committee noted that the latter decision was non-precedential.

Two other subjects the Committee discussed were the district court holdings, both affirmed by the panel, that (i) “Sales may be found to have occurred in the United States where a substantial level of sales activity occurs here, even for products manufactured, delivered, and used entirely abroad,“ and (ii) claim 13 containing a mathematical operation was patent-eligible because it was directed to” a method for encoding data that, according to the patent specification and testimony of Plaintiff’s experts, leads to a framework that improves on previous data encoding methods.”

With respect to the first, the Committee noted that two sections of the patent laws are directed to when a product is on-sale – Sec.102(a)(1) and Sec 271(a). In Phaff v. Wells, 525 U.S. 55 (1998), the Supreme Court said that the on-sale bar did not apply unless the product was “the subject of a commercial offer for sale.” Should the test be the same for infringement? For those who want to make products for foreign markets overseas, doesn’t clarity and uniformity of the patent law require a clear line?

The most interesting aspect of the panel’s decision that claim 13 was patent-eligible was that it never mentioned Alice. Instead it cited 40-year old Diamond v. Diehr: “The mere fact that Caltech’s claim employs a mathematical formula does not demonstrate that it is patent ineligible. See Diamond v. Diehr, 450 U.S. 175, 187 (1981).”

Diehr itself said that “The fact that one or more of the steps in respondents' process may not, in isolation, be novel or independently eligible for patent protection is irrelevant to the question of whether the claims as a whole recite subject matter eligible for patent protection under § 101.

One might hope that the Federal Circuit would follow the panel’s approach in deciding whether a claim is patent-eligible. First decide whether “a claim containing a mathematical formula implements or applies that formula in a structure or process which,  when considered as a whole, the patent laws were designed to protect,” and then turn to whether the claim “as a whole” is new and non-obvious.