Home > Publications > Blog

Upcoming Changes to Patent Rules Concerning Practice Before Patent Trial and Appeal Board

by John T. Pienkos, posted Friday, April 29, 2016

Image

Images

As of May 2, 2016, amended rules of practice go into effect concerning practice before the U.S. Patent Trial and Appeal Board (PTAB), particularly in relation to Inter Partes Review (IPR), Post-Grant Review (PGR), Covered Business Method patent review (CBM), and Derivation proceedings (collectively, PTAB proceedings). These changes are being made by the U.S. Patent and Trademark Office (USPTO) in an effort to take into account feedback received by the USPTO regarding the original rules established by the USPTO several years ago following enactment of the America Invents Act in 2011 – they are the second set of changes being made in this respect. The new changes relate to four aspects of PTAB proceedings, namely, (1) the submission of testimonial evidence; (2) the introduction of Rule 11-type certification requirements pertaining to PTAB submissions and the associated possibility of sanctions; (3) claim construction; and (4) the length requirements pertaining to submissions in the proceedings.

Regarding the submission of testimonial evidence, the amended rules provide that the PTAB will take into account testimonial evidence submitted by a patent owner as part of the patent owner’s preliminary response in an IPR, PGR, or CBM proceeding in the context of deciding whether to institute the proceeding. However, the PTAB will view any genuine issue of material fact created by the testimonial evidence in the light most favorable to the petitioner.

Regarding the new certification requirements, the amended rules begin by making clear that the duty of candor and good faith to the USPTO applies to parties and individuals involved in PTAB proceedings, and then further set forth that attorneys, registered practitioners or unrepresented parties that make representations to the PTAB (whether in the form of a petition, response, written motion, or other paper) necessarily are attesting to the PTAB that those representations are in compliance with certain well-established USPTO certification requirements (as set forth in 37 C.F.R § 11.18(b)). The comments provided by the USPTO characterize the certification requirements as a Rule-11 type certification (well known in the federal litigation context). Accordingly, the amended rules create the possibility of sanctions being imposed upon parties who violate the certification requirements. At the same time, the amended rules establish particular processes that need to be followed in order for sanctions to be imposed, as well as afford parties targeted with sanctions with an opportunity to withdraw or correct the representations giving rise to the motion for sanctions.

As for claim construction, the amended rules state that, in the context of an IPR, PGR or CBM proceeding, claims of a patent will be interpreted as having their broadest reasonable construction in light of the patent specification if the patent will not expire prior to a written decision being issued in the IPR, PGR or CBM proceeding. Nevertheless, the amended rules additionally state that the claims of a patent that is the subject of any of an IPR, PGR or CBM proceeding can potentially be interpreted more narrowly in accordance with a “district court-type claim construction approach” (also referred to in the comments as a “Phillips-type” construction approach). To qualify for a Phillips-type construction approach, the patent must expire within 18 months of the entry of the Notice of Filing Date Accorded to Petition for that proceeding, provided that a party submits a motion for this within 30 days of the petition filing date.

Finally, with respect to the length requirements pertaining to PTAB submissions, the amended rules establish word count limits instead of page count limits for several different types of petitions and replies. Among other things, an IPR petition and a derivation proceeding petition will each have a word limit of 14,000 words, and a PGR petition and a CBM petition will each have a word limit of 18,700 words. In certain circumstances, it may be possible to obtain a waiver of these word limits. Additionally, the amended rules establish parity between the word limits for certain petitions and certain corresponding responses. Further, the amended rules establish page limits for certain motions rather than word limits for those motions, and identify certain portions of submissions that will not be counted toward the word or page limits.

The amended rules taking effect May 2 apply not only to PTAB proceedings begun on or after that date, but also to PTAB proceedings already pending. How the amended rules can apply to any given PTAB proceeding will depend upon the particular circumstances surrounding that proceeding. Although certain aspects of the amended rules will have the effect of imposing new or modified burdens upon the parties to PTAB proceedings, at least some aspects of the amendments to the rules – particularly the amendments relating to testimonial evidence submission and claim construction – will effectively expand the range of tactical options available to the parties involved with PTAB proceedings. These tactical options and related issues should be thoroughly considered by those already involved in, or contemplating becoming involved in, PTAB proceedings.

For more information, please contact John Pienkos at (414) 978-5630 or jpienkos@whdlaw.com, or Brianna Schonenberg at (414) 978-5567 or bschonenberg@whdlaw.com, or another member of the PATCAP Team at Whyte Hirschboeck Dudek S.C.




Arkema Files Three Parallel AIA Post-Grant Proceedings Against Honeywell

by Ted J. Barthel and Brianna M. Schonenberg, posted Monday, April 25, 2016

Image

Images

On Feb. 22-23, 2016, Arkema filed two Post-Grant Review (PGRs) Petitions and one Inter Partes Review (IPR) Petition against USP 9,157,017, which is owned by Honeywell International Inc. (Honeywell). In essence, Arkema filed three post-grant challenges in parallel against the same Honeywell patent.

The ‘017 Patent is a divisional application claiming priority to a line of applications reaching back to 2002 (pre-America Invents Act (AIA)). As basis for the two PGRs, Arkema asserts that the effective filing date of the ‘017 Patent is March 26, 2014, the filing date of the divisional application. On the same day as the divisional filing (March 26, 2014), Honeywell filed a preliminary amendment canceling all previous claims and adding 20 new claims. Arkema contends that the new claims presented in the preliminary amendment lack support in the priority applications, thereby establishing the effective filing date of the ‘017 Patent as March 26, 2014 (post-AIA) — making the ‘017 Patent available for PGR.

The filing of three parallel petitions against the same patent raises the question whether the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) will review one, some, or all of these petitions. The decision to institute is driven by 35 U.S.C. § 314 (IPRs) and § 324 (PGRs). In addition, 35 U.S.C. § 325(d) provides PTAB discretion to reject a petition where “the same or substantially the same prior art or arguments previously were presented to the Office.”

PTAB has used § 325(d) in the past to block serial IPR “follow on” petitions, thereby preventing a petitioner from using a previous denial of institution as a roadmap for a “second bite at the apple.” In Unilever v. The Proctor & Gamble Company, IPR2014-00628 (Paper 21), PTAB stated that merely presenting different prior art may not be sufficient. If new prior art is relied on in a similar manner as other prior art, an IPR may be denied upon the basis that substantially the same arguments were previously presented. PTAB also noted that it has at its disposal the notion of “the interests of fairness, economy, and efficiency” in determining whether to institute review.

The table below provides a quick overview of the different challenges asserted by Arkema.

Grounds

PGR2
PGR2016-00012
Filed Feb. 22, 2016

PGR1
PGR2016-00011
Filed Feb. 23, 2016

IPR
IPR2016-00643
Filed Feb. 22, 2016

Post-AIA effective filing date

• Effective filing date of March 26, 2014, because patent claims are not enabled by priority applications.

--

Art summary

• Allegations based on (1) prior use and (2) patents and printed publications that published prior to the filing date of the ‘017 Patent, but after the earliest asserted priority date on the face of the ‘017 Patent.

• Each prior art reference relied on is a patent or printed publication predating the priority date asserted on the face of the ‘017 Patent.

Anticipated under § 102(a)

• Claims 1 - 20 because the subject matter of the claims was in public use prior to the effective filing date, in view of non-patent evidence submitted that the claimed refrigerant and lubricant were used in at least four different models of cars as early as 2012.

• Claims 1 -12 by WO 2007/002625.

--

Obvious under § 103(a)

• Claims 1 - 20 over Minor & Spatz and USP 8,065,882.

• Claims 1 -20 over Inagaki in view of Tapscott, Uemura and Magid.

Not enabled under § 112(a)

• Claims 1 - 20.

• Claim 13.

--

Indefinite under § 112(b)

• Claims 1 - 20.

--

Arkema expressly states that the cases are “not redundant” with respect to each other. It will be interesting to see whether PTAB applies § 325(d) to deny institution for any of the three Arkema post-grant challenges.

Another set of pending parallel PGR Petitions may also provide PTAB the opportunity to apply § 325(d). Dr. Reddy’s Laboratories Ltd. (Dr. Reddy) filed two parallel PGR Petitions on the same day against USP 9,173,942, owned by Helsinn Healthcare S.A. (PGR2016-00007 and PGR2016-00008). In one PGR Petition, Dr. Reddy argues the ‘942 Patent is invalid under the written description requirement of § 112 and the on-sale bar of § 102(a). In the other PGR Petition, Dr. Reddy argues the ‘942 Patent is invalid as obvious under § 103(a) over the combination of several prior art references.

For more information, please contact Ted Barthel at (414) 978-5317 or tbarthel@whdlaw.com, Brianna Schonenberg at (414) 978-5567 or bschonenberg@whdlaw.com, or another member of the Intellectual Property Practice Group. We will be monitoring future PGR developments in these cases and others in this blog.




Sun Capital III: Private Equity Funds Liable for Withdrawal Liability with Portfolio Company

by Myriem Bennani, posted Monday, April 11, 2016

Image

On March 28, 2016, the U.S. District Court – District of Massachusetts issued a much-anticipated ruling on remand in Sun Capital Partners III LP v. New England Teamsters & Trucking Industry Pension Fund, holding that two non-parallel private equity funds formed a “partnership-in-fact” and conducted a “trade or business” and, as such, were jointly and severally liable for multiemployer pension plan withdrawal liability triggered by a portfolio company of the two funds.

Background

The case presented issues of first impression involving the imposition of a portfolio company’s withdrawal liability obligations on two private equity funds that had invested in the bankrupt company, owning respectively 30% and 70% of the company.

Under ERISA, multiemployer withdrawal liability is imposed on an entity other than the contributing employer if such entity is under “common control” with the employer and is a “trade or business.” The pension fund asserted that the funds were also liable for the withdrawal liability because they were engaged in a trade or business under common control with the portfolio company. Conversely, the equity funds argued that they were mere passive investors that had indirectly controlled and tried to turn around the struggling company.

In 2013, the First Circuit Court of Appeals applied an “investment plus” standard (i.e., passive/active management of portfolio company and level of economic benefit received), ultimately holding that one of the funds was engaged in a trade or business and remanding to the District of Massachusetts District Court for a factual determination with respect to the second fund.

The Latest Chapter

On remand, applying the “investment plus” standard, the District Court found that the second fund was also a trade or business. The court held that the two equity funds were therefore jointly and severally liable for the portfolio company’s withdrawal liability obligations as under common control with the company (i.e., combined ownership of at least 80%).

In reaching its decision, the court reasoned that the two equity funds were engaged in a single “partnership” notwithstanding that the two funds had separate lifecycles and investors, had separate financial statements and bank accounts, were not parallel funds, and had, for the most part, different portfolio companies. Just as troubling is the court’s acknowledgment that the two funds had expressly stated in the operating agreement of the LLC that they did not intend the investment overlap to constitute a partnership or joint venture.

This is a critical decision for private equity funds that have portfolio companies (or are considering investing in companies) that contribute to multiemployer pension plans. The decision is likely to spur more litigation on the “trade or business” question in other circuits, as more pension funds seek to collect on withdrawal liability from private equity funds as deep pockets. Of course, whether other circuit courts adopt the Sun Capital rationale and conclusions remains to be seen.

For more information, please contact Myriem Bennani at (262) 956-6227 or mbennani@whdlaw.com, Erik Eisenmann at (414) 978-5371 or eeisenmann@whdlaw.com, or another member of the Employee Benefits Team.




IRS Issues Guidance on Mid-Year Changes to Safe Harbor Plans

by David W. Eckhardt, posted Tuesday, April 05, 2016

Image
On Jan. 29, 2016, the IRS issued Notice 2016-16, which provides guidance on mid-year changes to a safe harbor plan under sections 401(k) and 401(m) of the Internal Revenue Code.
 
Generally, a mid-year change to a safe harbor plan or a plan’s safe harbor notice does not violate the safe harbor rules provided that certain conditions are satisfied. A mid-year change is a change that is first effective during the plan year but not as of the beginning of the plan year, or a change that is effective as of the beginning of the plan year but adopted mid-year.
 
The notice condition requires that a notice describing the change and its effective date be delivered to each employee otherwise required to be provided the safe harbor notice within a reasonable period before the change. This requirement is deemed satisfied if the updated notice is provided at least 30 days and not more than 90 days before the effective date of the change.
 
Additionally, employees must be given an opportunity before the effective date of the change to change their election under the plan.
 
There are certain changes that a plan cannot make. A plan cannot: increase the number of completed years of service that are required for an employee to have a right to their safe harbor account balance; reduce the number of employees who are eligible to receive safe harbor contributions; change the type of the safe harbor plan; or modify the formula used to determine matching contributions if it increases the amount of matching contributions.
 
This guidance is helpful to employers who want or need to make changes to the safe harbor plans at mid-year. Employers who make changes to their safe harbor plan should make sure that change is not prohibited. Further, employers should be careful to follow the notice requirements when making changes, including allowing employees to make changes to their elections.
 
For more information, please contact David Eckhardt at (414) 978-5414 or deckhardt@whdlaw.com, or another member of the Employee Benefits Team.



First Annual Emergency Engine Electronic Report Due to EPA by March 31, 2016

by Phillip R. Bower, posted Wednesday, March 09, 2016

Image The U.S. Environmental Protection Agency’s (EPA) reciprocating internal combustion engine (RICE) regulations require an owner of an emergency engine that is greater than 100 horsepower, and that is operated or contractually obligated to be available greater than 15 hours per year for emergency demand response or voltage or frequency deviations, or operated for local reliability, to submit an annual electronic report to EPA. See generally 40 C.F.R. §§ 63.6650(h), 60.4214(d), and 60.4245(e). This is the first year that this annual reporting requirement applies, and the first annual report covering the operating year of 2015 is due by March 31, 2016. Generally, the reports must contain the following information...Read more...



Claim Amendment Not Enough to Subject Pre-AIA Patent to PGR

by Ted J. Barthel and Brianna M. Schonenberg, posted Wednesday, March 02, 2016

Image
PGR2015-00023. USP 8,876,638, owned by MLB Advanced Media, L.P. (MLB), has a filing date of Jan. 29, 2010 (pre-America Invents Act (AIA)). Challenger Front Row Technologies, LLC (Front Row) focused on a claim amendment made during prosecution of the ‘638 Patent as the basis for Post Grant Review (PGR) eligibility. During prosecution, MLB submitted the claim amendment “pitch classes pitches” on Sept. 23, 2013 (post-AIA). The Examiner rejected MLB’s claim amendment under 35 USC § 112 for lack of support. MLB later overcame the § 112 rejection with the claim amendment “pitch types classes.” Front Row asserted that the “§ 112-unsupported” claim amendment of Sept. 23, 2013, moved the application that matured into the ‘638 Patent from the pre-AIA regime to the AIA regime. According to Front Row, once an application falls under the AIA, it remains subject to the provisions of the AIA.

The U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) denied institution on Feb. 22, 2016.
 
PTAB noted the proper approach under 35 USC § 100(i) for determining whether a patent is entitled to an earlier filing date is:
      A. look first at the actual filing date (AFD) of the application as the effective filing date (EFD); then
      B. look for any earlier filing date and determine whether the patented claims find support in earlier application; and
      if no to (B), then the AFD is the EFD.

Using this approach, PTAB found that § 100(i)(1)(B) does not apply to the ‘638 Patent because no earlier priority date exists. The sole filing date presented in the ‘638 Patent is the actual filing date of Jan. 29, 2010. Since the actual filing date is pre-AIA, PTAB held that the ‘638 Patent is not eligible for PGR.

PTAB dismissed Front Row’s assertion that the alleged § 112-unsupported claim amendment made during prosecution (and post-AIA) can serve as an “effective filing date” under the rubric of § 100(i). Specifically, PTAB noted “[n]owhere does the statute contemplate that the effective filing date might depend on the date of a later-filed amendment to a claim. Instead, the statute speaks only to “priority” or “earlier” dates, not dates subsequent to the actual filing date.”

Takeaway. This is a benchmark decision shedding light on a debate within the patent bar on whether a post-AIA claim amendment can subject a pre-AIA patent to the AIA. PTAB’s decision here indicates that a § 112-unsupported claim amendment, made after the filing date (and post-AIA), will not move a pre-AIA patent into the AIA regime. This decision reinforces the practice point to file any preliminary amendment at least one day after the application filing date.

For more information, please contact Ted Barthel at (414) 978-5317 or tbarthel@whdlaw.com, Brianna Schonenberg at (414) 978-5567 or bschonenberg@whdlaw.com, or another member of the Intellectual Property Practice Group. We will be monitoring future PGR developments in this case and others in this blog. 




U.S. Supreme Court Limits Health Plan Subrogation Rights

by David W. Eckhardt and Erik K. Eisenmann, posted Tuesday, March 01, 2016

Image
On Jan. 20, 2016, the U.S. Supreme Court held that an ERISA benefit plan cannot enforce its subrogation right to recover expenses from a participant’s general assets when the participant has spent any third-party settlement on items that cannot be traced. See Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan.

In Montanile, the plan reimbursed the participant’s medical costs after a serious injury, but required the participant to reimburse the plan if the participant received any amounts from a third party (an obligation the participant confirmed in a signed agreement).  

Upon receiving a settlement from a third party, the participant’s lawyers held the amount in a client trust account. The participant’s lawyers attempted to negotiate with the plan for repayment, but when negotiations broke down, the lawyers demanded that the plan file an “objection” within 14 days (an arbitrary deadline established by the participant) or waive its right to those proceeds. The plan did not timely object, and the participant subsequently spent all of the funds.

The Supreme Court held that although the plan’s claim against the participant was an equitable claim, enforcing the claim against the participant’s general assets was not equitable. Because the participant spent the money on nontraceable items (e.g., food, travel), the equitable lien could not be enforced.

The case emphasizes the importance of carefully reviewing subrogation agreements, which could include naming the participant as a fiduciary who is obligated to return any funds to the plan, and the importance of tracking recoveries from third parties. It also highlights that a plan may be required to “negotiate” with a participant’s counsel for repayment amounts, even where the plan has a clearly superior right to that money. Finally, it shows that a plan will be required (at least for now) to timely object to artificial deadlines imposed by counsel for participants, or risk having proceeds spent on nontraceable items.  

For more information, please contact David Eckhardt at (414) 978-5414 or deckhardt@whdlaw.com, Erik Eisenmann at (414) 978-5731 or eeisenmann@whdlaw.com, or another member of the Employee Benefits or Labor & Employment teams. 



PTAB PGR Institution Sheds Light on Patentee’s Burden to Establish Priority in Claims

by Brianna M. Schonenberg and Ted J. Barthel, posted Monday, February 22, 2016

Image
PGR2015-00022. USP 8,882,292, owned by S&S Precision, LLC (S&S Precision), has a filing date of June 26, 2013, and a chain of continuation-in-part and provisional applications reaching back to Nov. 21, 2008 (pre-America Invents Act (AIA)). The application for the '292 Patent included original claim 22, which contained subject matter not disclosed in any of the priority applications. Prior to grant, original claim 22 was cancelled in response to an Ex parte Quayle Action to maintain the priority of the application. S&S Precision did not dispute that the '292 Patent is available for Post Grant Review because the application for the '292 Patent contained a claim (original claim 22) that had an effective filing date after March 16, 2013.
 
In its Petition, Challenger CORE Survival, Inc. (CORE) argued the claims of the '292 Patent are obvious under 35 U.S.C. § 103 over Hamilton (WO 2009/101391, filed Feb. 10, 2009, published Aug. 20, 2009) and Neptune (Neptune product brochure filed with U.S. Trademark Application Serial No. 85014106, filed April 14, 2010)—as well as three other references that clearly pre-date the earliest possible priority date of the '292 Patent (Nov. 21, 2008). In its Preliminary Response, S&S Precision argued CORE failed to establish the claims of the '292 Patent are not entitled to a priority date preceding Hamilton and Neptune, in which case Hamilton and Neptune would not be available as prior art against the '292 Patent.
 
On Feb. 19, 2016, in its decision on institution, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) held that CORE had shown that claims 1 - 9 and 16 - 20 more likely than not would have been obvious under 35 U.S.C. § 103 over Hamilton and Neptune. Relying on Dynamic Drinkware, LLC v. National Graphics, Inc., 800 F.3d 1375 (Fed. Cir. 2015), PTAB held that a patentee must demonstrate entitlement to a priority date when relying on that priority date to overcome an anticipation or obviousness argument. Thus, S&S Precision has the initial burden of demonstrating that the claims meet the requirements of 35 U.S.C. § 120. In its Preliminary Response, S&S Precision provided no analysis of whether the granted claims were supported by the provisional application with a filing date of Nov. 21, 2008. Consequently, PTAB held that S&S Precision failed to show the claims of the '292 Patent are entitled to a priority date preceding Hamilton and Neptune.
 
Takeaway: For a patent owner to antedate art cited by a challenger, it is the patentee’s burden to show claims are supported by an ancestral application. Here, S&S Precision provided no analysis of whether the granted claims were supported by a priority application.
 
For more information, please contact Brianna Schonenberg at (414) 978-5567 orbschonenberg@whdlaw.com, Ted Barthel at (414) 978-5317 or tbarthel@whdlaw.com, or another member of the Intellectual Property Practice Group. We will be monitoring future PGR developments in this case and others in this blog.



First PTAB PGR Decision of 2016 Institutes Another Pre-AIA Patent

by Ted J. Barthel and Brianna M. Schonenberg, posted Monday, February 15, 2016

Image
 
PGR2015-00019. USP 8,876,991, owned by Gold Standard Instruments, LLC, has a filing date of Jan. 29, 2014. The ‘991 Patent is a transition patent because it is based on a line of priority applications reaching back to 2004 (pre-America Invents Act (AIA)). Each application in the ‘991 Patent lineage has the same specification.  
 
Challenger US Endodontics, LLC (US Endodontics) petitioned for a Post-Grant Review (PGR) within nine months of the ‘991 Patent grant. On Jan. 29, 2016, in its decision on institution, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) agreed with challenger’s allegation that claims 12-16 of the ‘991 Patent do not find § 112(a) support in any of the pre-AIA applications. PTAB held that the ‘991 Patent claims are not entitled to the pre-AIA filing date. 
 
PTAB cited Inguran v. Premium Genetics (PGR2015-00017) for the premise that a transition patent is available for PGR “if the patent contains at least one claim that was not disclosed in compliance with the written description and enablement requirements of § 112(a)” in the pre-AIA application. PTAB noted the proper approach under 35 USC § 100(i) for determining whether a transition patent is entitled to an earlier filing date is: 
  1. look first at the actual filing date (AFD) of the application as the effective filing date (EFD); then
  2.      
  3. look to the pre-AIA application and determine whether the patented claims find § 112(a) support in the pre-AIA application; and
  4.      
  5. if no to (2), then the AFD is the EFD.
Using this approach, PTAB focused on an element of claim 12 (below): 
   
"heat-treating the entire shank at a temperature above 25°C up to but not equal to the melting point of the superelastic nickel titanium alloy, wherein the heat treated shank has an angle greater than 10 degrees of permanent deformation….”

 
PTAB was persuaded by US Endodontics’ expert testimony, which showed that the claimed alloy heat treated at 25°C and 300°C obtained a deformation angle an order of magnitude less than the claimed deformation of 10°—0.87° (at 25°C) and 1.17° (at 300°C). PTAB therefore agreed that US Endodontics’ single example of alloy heat treated at 500°C for 10° deformation angle was insufficient guidance for one to practice the full scope of the claim. Consequently, PTAB found the ‘991 Patent's specification (and all priority applications) as insufficient support under the doctrine of undue experimentation.
 
Takeaways. The ‘991 Patent is the second transition patent to be instituted under PGR—the first being USP 8,933,395, owned by Premium Genetics. PGR provides challengers the ability to attack pre-March 16, 2013 patents by finding overly broad claims in granted transition patents. For those prosecuting pending transition patent applications, consider keeping the claim scope close to your disclosure (i.e., keep claim ranges tight with your examples).
 
For more information, please contact Ted Barthel at (414) 978-5317 or tbarthel@whdlaw.com, Brianna Schonenberg at (414) 978-5567 or bschonenberg@whdlaw.com, or another member of the Intellectual Property Practice Group. We will be monitoring future PGR developments in this case and others in this blog.



EEOC Discusses Health Insurance Incentive Programs

by David W. Eckhardt, posted Tuesday, February 09, 2016

Image
As a follow-up from WHD’s previous blog post regarding wellness programs, this post will address informal comments made by the EEOC regarding wellness programs.
 
The American Bar Association Joint Committee on Employee Benefits met with EEOC staff on May 7, 2015. In that meeting, staff members stated that a program that only measures a participant's waistline would not be subject to ADA rules because measuring a waistline is not a disability-related question or medical examination. However, staff reiterated that incentives tied to answering disability-related questions or underdoing a medical examination cannot exceed 30% of the total cost of self-only coverage.
 
For example, an employer informed an employee and his spouse that the spouse must participate in the program to avoid a reduction in coverage level. EEOC staff indicated that this reduction in coverage would violate both the HIPAA nondiscrimination rules and the similar ADA provision.  

Staff confirmed that a voluntary “Biggest Loser” challenge is not considered a workplace wellness program subject to the proposed ADA wellness rules when it is provided through a third-party vendor. The program is also not part of an employer’s group health plan and does not involve incentives related to the group health plan.
 
These comments provide helpful insight into how the EEOC views these types of wellness programs. With the issuance of regulations under the ACA, ADA and GINA, employers will need to navigate the various laws based on their programs’ specifics.

For more information, please contact David Eckhardt at (414) 978-5414 or deckhardt@whdlaw.com, or another member of the Employee Benefits Team.



Federal Court Decision Provides New Guidance for Employers Considering Wellness Programs

by Erik K. Eisenmann and Laura L. Ferrari, posted Monday, January 25, 2016

Image
On Dec. 30, 2015, Judge Barbara Crabb from the U. S. District Court for the Western District of Wisconsin issued a decision in EEOC v. Flambeau, Inc., a case that clarifies employers’ rights under the Americans with Disabilities Act (ADA) to utilize workplace wellness programs. With employee wellness programs gaining popularity, this decision offers some much-needed guidance as to how this provision applies to the programs and what program features are essential in ensuring employers maintain compliance with the ADA.
 
Key Language in the ADA

2 U.S.C. § 12112(d)(4)(A) generally prohibits employers from requiring a medical examination or making inquiries as to the existence, nature or severity of a disability unless doing so is job-related and consistent with business necessity. There is, however, an exception to this rule that allows employers to conduct voluntary medical exams that are a part of a workplace health program.  
 
Section 12201(c)(2) of the ADA also outlines a safe harbor provision that allows employers to engage in activities to establish the “terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks." 
 
The Employer’s Wellness Program
 
In Flambeau, the employer offered its employees the ability to participate in its self-funded, self-insured insurance plan. Participation was voluntary, and employees were not required to join as a condition of their employment. To be eligible for the insurance plan, however, employees were required to participate in a wellness program, which was comprised of a health risk assessment (including a questionnaire about diet, medical history, etc.), and a biometric test, which was similar to a routine physical exam. With the exception of information about tobacco use, the information associated with individual employees was not used; only aggregate information from all participating employees was used to identify any common health risks and allowed the employer to estimate the cost of insurance, set premiums and adjust co-pays. An employee who lost his coverage due to non-completion of the wellness program requirements sued his employer, claiming that the requirements violated the prohibition in the ADA on mandatory medical exams. The employer, however, maintained that these requirements were terms of the plan, thereby bringing the plan and its prerequisites within the safe harbor provision. Read more...



Recent ACA Guidance

by David W. Eckhardt, posted Friday, January 15, 2016

Image
This post is the first in a series that will address recent guidance issued by the U.S. Treasury Department, Internal Revenue Service (IRS) and U.S. Department of Labor regarding various aspects of group health plans and the Affordable Care Act (ACA). This blog will supplement Employee Benefit Special Reports and provide more informal and frequent posts on employee benefits matters.
 
IRS Notice 2015-87  
 
While everyone was enjoying the holidays, IRS Notice 2015-87 was issued together with 26 frequently asked questions (FAQs) that covered the following topics:
  • Information reporting penalty relief;
  • Application of ACA reforms to various health care arrangements, such as health reimbursement arrangements and employer payment plans;
  • Application of the employer mandate provisions relating to contributions under HRAs, FSAs, and opt-out payments;
  • The impact of employer contributions on affordability for employees; and
  • COBRA rules related to FSAs.   
As the FAQs are very lengthy, detailed and cover a lot of ground, each topic will be covered in the Employee Benefits blog and Special Reports.
 
Penalty Relief and Reporting Deadlines
 
Starting with some good news for the new year, the Notice reiterates the relief provided for in the preamble to the final regulations under IRC §6056 that the IRS will not impose penalties on employers who can show they have made a good faith effort to comply with the information reporting requirements in 2016 for coverage offered in 2015. However, employers must still timely report to be eligible for the relief.
 
With regard to timing of reporting, the IRS released IRS Notice 2016-4, which delays the due dates for ACA information reporting both for furnishing to individuals and filing with the IRS. The notice delays the due date to furnish reports to individuals from Feb. 1, 2016, until March 31, 2016. The notice delays the filing with the IRS from Feb. 29, 2016, to May 31, 2016, if not filing electronically, and from March 31, 2016, to June 30, 2016, if filing electronically. Employers receive this extension automatically and are not required to submit any further documentation with the IRS.
 
Stay tuned for further blog posts regarding the ACA guidance issued under Notice 2015-87.
 
For more information, please contact David Eckhardt at (414) 978-5414 or deckhardt@whdlaw.com, Michael Taibleson at (414) 978-5514 or mtaibleson@whdlaw.com, or another member of the Employee Benefits Team.
 



U.S. Patent Office Institutes First Post-Grant Review of a Pre-AIA Patent

by Ted J. Barthel and Brianna M. Schonenberg, posted Tuesday, January 05, 2016

Image
 
PGR2015-00017. USP 8,933,395 owned by Premium Genetics, Ltd. (PG), has a filing date of Jan. 31, 2014, and a long priority chain of continuation and provisional applications reaching back to July 31, 2002 (pre-America Invents Act (AIA)). The ‘395 Patent has 14 claims, with independent claims 1 and 2. It is noteworthy that claim 2 was filed by way of preliminary amendment on the ‘395 Patent filing date—Jan. 31, 2014 (post-AIA).

Challenger Inguran LLC (Inguran) petitioned for a Post-Grant Review (PGR) within nine months of the ‘395 Patent grant date and, in response, Patentee PG, filed a Preliminary Response. In its Dec. 22, 2015 Decision on Institution, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) agreed with Inguran that the ‘395 Patent is available for PGR. PTAB ruled that even though claim 1 was fully supported by the pre-AIA priority application (giving claim 1 a pre-AIA effective filing date), claim 2 was not sufficiently disclosed in the pre-AIA priority application. Central to the PTAB’s reasoning was the analysis of “constriction and flattening of cells” language in claim 2. PG contended that the skilled artisan would understand the meaning of this claim language and pointed to a third-party prior art patent as support. PTAB found PG’s argument unpersuasive, stating that “a prior application itself must describe an invention.” PTAB determined that claim 2 was not supported by the pre-AIA priority application. With an effective filing date of Jan. 31, 2014, PTAB found that claim 2 fulfills the AIA provision of an application containing “at any time” a claim with an effective filing date on/after March 16, 2013. PTAB therefore ruled that all claims (including claim 1) of the ‘395 Patent are subject to PGR.

Interestingly, PTAB determined that Inguran’s § 112 challenge to claim 2’s enablement/definiteness fell short. With respect to enablement, PTAB stated Inguran failed to establish the claim 2 term “constriction and flattening of cells” constituted undue experimentation. With respect to the definiteness requirement, PTAB noted Inguran failed to establish the claim 2 term “all available sides” was ambiguous.

Takeaway: It is perplexing how PTAB determined claim 2 has § 112 enablement/definiteness in the pre-AIA priority application sufficient to withstand Inguran’s challenge, yet claim 2 is not entitled to receive the benefit of the pre-AIA priority application filing date.

For more information, please contact Ted Barthel at (414) 978-5317 or tbarthel@whdlaw.com, Brianna Schonenberg at (414) 978-5567 or bschonenberg@whdlaw.com, or another member of the Intellectual Property Practice Group. We will be monitoring future PGR developments in this case and others in this blog.



Using Post-Grant Review to Challenge Pre-AIA Patents

by Ted J. Barthel and Brianna M. Schonenberg, posted Tuesday, December 22, 2015

Image
 
 
As of Dec. 22, 2015, 16 Post-Grant Review (PGR) petitions have been filed with the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB). Seven PGRs (more than 40%) challenge, or have challenged, a patent with a pre-America Invents Act (AIA) priority claim—i.e., seven patents challenged by PGR claim priority to a patent application with a filing date before March 16, 2013.

This blog post provides a brief overview of the pre-AIA patents challenged under PGR.

 
1. PGR2014-00007. Challenger SDI Technologies, Inc. (SDI), mistakenly filed a petition for Inter Partes Review (IPR) as a petition for PGR on USP 8,364,295, owned by Bose Corp. The ‘295 Patent was filed on Dec. 7, 2006 (pre-AIA) as a continuation application that claims priority to an earlier application having a pre-AIA filing date of Oct. 12, 2000. The PGR was dismissed in view of SDI’s mistake, and SDI proceeded to file two petitions for IPR against the '295 Patent.

2. PGR2014-00008. Challenger LaRose Industries LLC (LaRose) alleged that USP 8,684,420, owned by Choon’s Design Inc., was available for PGR. The ‘420 Patent has a filing date of July 13, 2013, with a priority chain of previous applications extending back to an earliest effective filing date of Nov. 5, 2010 (pre-AIA). LaRose asserted the application that matured into the ‘420 Patent was filed with new claims, the new claims being different than claims in any of the pre-AIA priority applications. In the PGR petition, LaRose provided detailed argument explaining why four key claim terms were not supported in the pre-AIA applications.

Prior to a decision on institution, the parties jointly filed a motion to terminate the PGR, which PTAB granted.

3. PGR2014-00010. USP 8,598,219, owned by Helsinn Healthcare S.A., has a filing date of May 23, 2013, and is a continuation-in-part (CIP) with a long priority chain of continuation and provisional applications reaching back to Jan. 30, 2003 (pre-AIA). However, the Application Data Sheet filed with the application for the ‘219 Patent identified the patent as an AIA application. Indeed, during prosecution, Helsinn Healthcare S.A. argued in an examiner interview that the application falls within the AIA regime.

Prior to a decision on institution, the parties jointly filed a motion to terminate the PGR, which PTAB granted.

4. PGR2015-00017. Challenger Inguran LLC (Inguran) alleges that USP 8,933,395, owned by Premium Genetics Ltd., is available for PGR. The ‘395 Patent has a filing date of Jan. 31, 2014, and has a long priority chain of continuation and provisional applications reaching back to July 31, 2012 (pre-AIA). Inguran asserts that the ‘395 Patent claims were first fully disclosed when they were submitted in a preliminary amendment filed on Jan. 31 2014, as part of the application that matured into the ‘395 Patent. Inguran argues that the ‘395 Patent claims are not entitled to the filing date of any earlier pre-AIA priority application because none of the priority applications disclose the last element of claim 1, namely the “at least one channel disposed at said another end of the apparatus…. Inguran therefore contends that the effective filing date for the ‘395 Patent claims is the filing date of the preliminary amendment, Jan. 31, 2014.

5. PGR2015-00019. USP 8,876,991, owned by Gold Standard Instruments, LLC, has a filing date of Jan. 29, 2014, and is a continuation of an application with a priority claim of April 25, 2012 (pre-AIA). Challenger US Endodontics LLC alleges that claim 1 includes a temperature range with a lower limit (“a temperature above 25°C up to but not equal to the melting point of the superelastic …alloy”) that is not supported in the pre-AIA application and the ‘991 Patent claims are therefore not entitled to the pre-AIA filing date. During prosecution, the Examiner presented a § 112 rejection to the lower limit of “a temperature above 25°C.” The Patentee overcame the § 112 rejection by way of 132 Declaration. In the reasons for allowance, the Examiner withdrew the § 112 rejection and the originally filed claims granted with no claim amendments. In the PGR petition, US Endodontics LLC alleges that the Examiner made a mistake in allowing the claims with the lower temperature limit of “above 25°C.

6. PGR2015-00022. USP 8,882,292, owned by S&S Precision LLC, has a filing date of June 26, 2013, and is a CIP that claims priority to an earlier CIP application having a pre-AIA filing date of Jan. 31, 2011. Challenger Core Survival Inc. alleges the originally filed ‘292 Patent claims contained new matter not disclosed in the pre-AIA application and, therefore, the ‘292 Patent claims are not entitled to a pre-AIA filing date. Indeed, during prosecution of the ‘292 Patent, the Examiner stated the application was being examined under the provisions of the AIA.

7. PGR2015-00023. USP 8,876,638, owned by MLB Advanced Media, L.P. (MLB), has a filing date of Jan. 29, 2010 (pre-AIA). Challenger Front Row Technologies, LLC (Front Row) focuses on a claim amendment made during prosecution of the ‘638 Patent as the basis for PGR eligibility. During prosecution, MLB submitted the claim amendment “pitch classes pitches” on Sept. 23, 2013 (post-AIA). The Examiner rejected MLB’s claim amendment under § 112 for lack of support. MLB later overcame the § 112 rejection with the claim amendment “pitch types classes.” Front Row asserts that the “unsupported” claim amendment of Sept. 23, 2013, moved the application that matured into the ‘638 Patent from the pre-AIA regime to the AIA regime. According to Front Row, once an application falls under the AIA, it remains subject to the provisions of the AIA.

For more information, please contact Ted Barthel at (414) 978-5317 or tbarthel@whdlaw.com, Brianna Schonenberg at (414) 978-5567 or bschonenberg@whdlaw.com, or another member of the Intellectual Property Practice Group. We will be monitoring future PGR developments in these cases and others in this blog.

 
 



EPA Engine Enforcement Continues

by Phillip R. Bower, posted Wednesday, October 07, 2015

Image While Volkswagen’s installation of “defeat devices” on its diesel automobiles has recently received a significant amount of media coverage, enforcement of engine regulations has been part of an ongoing effort by EPA to ensure that importers of vehicles and engines comply with the requirements of the Clean Air Act and that retailers exercise due diligence in ensuring that their products comply fully with the regulations. Companies that import vehicles or engines or that install engines in vehicles or equipment should be aware of the following recent enforcement cases and be vigilant of their own compliance with EPA’s engine regulations. Read more... 



Recent Judicial Decisions: Stationary Engines (RICE)

by Phillip R. Bower, posted Wednesday, October 07, 2015

Image There have been some recent judicial decisions related to stationary reciprocal internal combustion engines (RICE) and the exemptions for emergency engines to operate for certain non-emergency periods without controls. As discussed in a prior blog post, petitioners sought judicial review of parts of EPA’s Jan. 30, 2013, final rule amending the National Emission Standards for Hazardous Air Pollutants (NESHAPs) for Stationary Reciprocating Internal Combustion Engines and Standards of Performance for Stationary Internal Combustion Engines. Read more...  



PTAB Issues Third Decision to Institute Post-Grant Review

by Brianna M. Schonenberg and Ted J. Barthel, posted Monday, August 24, 2015

Image
 
On Aug. 4, 2015, the U.S. Patent and Trademark Office's Patent Trial and Appeal Board (PTAB) issued its third decision to institute Post-Grant Review (PGR). Netsirv, LLC and Local Motion MN (collectively, Netsirv) filed a petition for PGR against USP 8,756,166 (assigned to Boxbee, Inc.) on March 17, 2015. No patent litigation is pending between Boxbee and Netsirv. The '166 Patent generally relates to a computerized method for storage container (e.g., the PODS® storage system) tracking and delivery. Netsirv challenged the claims of the '166 Patent under 35 U.S.C. §§ 101, 102 and 103.
    
PTAB allowed Netsirv to correct the page count of its originally filed petition (82 pages) to meet the allowed page limit of 80 pages. Boxbee responded to the petition by explicitly waiving its right to file a preliminary response.
 
PTAB held that it is more likely than not that Netsirv will prevail in showing that the '166 Patent claims fail to recite "significantly more" than the abstract idea of "facilitating containerized storage," as required under the Alice Corp. decision.
 
PTAB found Netsirv's § 102 challenge that the '166 Patent was publicly known before the effective filing date was deficient. The only evidence proffered by Netsirv to establish prior public use was an affidavit by the president and CEO of Local Motion MN, the co-PGR petitioner. Citing to the "rule of reason" analysis of In re Reuter, PTAB ruled testimony from an interested party—alone and with no corroborating evidence—was insufficient to establish prior public use. PTAB also determined Netsirv's § 103 challenge was lacking. PTAB found that the same affidavit from Local Motion MN's CEO was insufficient evidence to fulfill deficiencies in the combination of two asserted prior art patent references.
 
Takeaways: 1. Self-interested testimony alone is not enough to establish unpatentability in a PGR proceeding. A challenger must present other corroborating evidence. 2. Boxbee's explicit waiver to a preliminary response is interesting. It appears Boxbee's strategy may be not to defend the '166 Patent in the PGR. Boxbee has a pending continuation application that claims priority to the '166 Patent. Boxbee's plan may be to respond to PTAB's PGR ruling by way of claim amendment in the pending continuation application.
 
For more information, please contact Brianna Schonenberg at (414) 978-5567 or bschonenberg@whdlaw.com, Ted Barthel at (414) 978-5317 or tbarthel@whdlaw.com, or another member of the Intellectual Property Practice Group. We will be monitoring future PGR developments in this case and others in this blog.
  



What is Patent Post Grant Review and Why Use It?

by Brianna M. Schonenberg and Ted J. Barthel, posted Tuesday, July 28, 2015

Image
 
Post Grant Review (PGR) is a U.S. Patent and Trademark Office (USPTO) proceeding where a third party can challenge a granted America Invents Act (AIA) patent. To be eligible for PGR, a patent must contain a claim with an effective filing date on or after March 16, 2013. A petition for PGR must be filed within nine months of the date of patent grant. Any third party may use PGR to challenge a granted patent's validity. PGR enables a third party to challenge on any ground of patentability—subject matter eligibility (§ 101), novelty (§ 102), obviousness (§ 103) and written description/enablement (§ 112). Unlike litigation, a patent in PGR is not provided a presumption of validity and patent claims are given their broadest reasonable interpretation (instead of the narrower Phillips construction of litigation). After a PGR is instituted, the USPTO must issue a final written decision on the case within one year. Similar to litigation, a PGR can be terminated by the parties through settlement before the USPTO issues a final written decision.
 
PGR can be used offensively and defensively by a third party. A third party concerned about future infringement charges may use PGR offensively by petitioning for PGR of a granted patent before any charges are made. A third party already charged with infringement may defensively petition for PGR in order to take advantage of PGR's lower evidentiary threshold for patent invalidity (preponderance of the evidence) as opposed to the higher evidentiary threshold of clear and convincing evidence applicable in federal court patent litigation. Note that a third party cannot petition for PGR if it has already challenged the validity of the claims in litigation.
 
Of course, if the nine-month window for PGR has passed, Inter Partes Review (IPR) or Covered Business Method Patent Review (CBM) are other USPTO mechanisms available for a third-party challenger.
 
To date, 11 petitions for PGR have been filed—two PGRs settled before the USPTO Patent Trial and Appeal Board (PTAB) issued a decision on institution, one PGR was dismissed because the petitioner mistakenly filed a petition for IPR as a petition for PGR, and two PGRs have been instituted by PTAB.
 
Because of the limited nine-month window to file a PGR, it is important to stay aware of competitors’ pending patent applications. Recently, the USPTO released a free patent application alert service that allows users to set up customized email alerts to receive notification when a patent application is published which meets criteria set by the user (available at www.uspatentappalerts.com).

For more information, please contact Brianna Schonenberg at (414) 978-5567 or bschonenberg@whdlaw.com, or Ted Barthel at (414) 978-5317 or tbarthel@whdlaw.com, or another member of the Intellectual Property Practice Group. We will be monitoring future PGR developments in these cases and others in this blog.
   



Post Grant Review Trumps Reissue

by Ted J. Barthel and Brianna M. Schonenberg, posted Thursday, July 16, 2015

Image
 
Patentee Leachman Cattle of Colorado (Leachman) filed a reissue application requesting reissue of USP 8,660,888 on Oct. 16, 2014. Thirty-six days later, American Simmental Association (American Simmental) filed a petition for Post Grant Review (PGR) of the '888 Patent. In a teleconference with the Patent Trial and Appeal Board (PTAB) 20 days after American Simmental filed its petition for PGR, Leachman requested authorization to file a motion to stay the PGR proceeding pending conclusion of the reissue application. Leachman made its request prior to filing a preliminary response to American Simmental’s petition for PGR—indicating Leachman was attempting to avoid the costs of defending the '888 Patent in PGR. However, PTAB held that Leachman was not authorized to file a motion to stay at the time because PTAB had not yet decided whether to institute PGR. PTAB noted Patentee Leachman had made no claim amendments in the reissue proceedings. Thus, PTAB found that it would be premature to consider a motion to stay the PGR proceeding.
 
Within one week of instituting the PGR, PTAB unilaterally ordered a stay on the reissue proceeding. PTAB reasoned that duplication of efforts and possible inconsistencies between the reissue proceeding and the PGR justified a stay of the reissue. Claim amendment in the reissue would cause inconsistency in claim scope between the reissue and the PGR.
 
Takeaway: If the '888 Patent is invalidated in PGR, the stayed reissue may benefit Patentee Leachman, as it may offer Leachman the opportunity to play the last hand by later amending claims in the reissue proceeding. Reissue proceedings allow more flexibility for claim amendment compared to the limited ability to amend claims in America Invents Act post-grant proceedings. On the other hand, a PGR-invalidated patent may be Patentee Leachman’s last play. A patent examiner will undoubtedly give weight to PTAB's PGR decision, thereby severely limiting or eliminating Leachman’s attempt at claim amendment. Moreover, invalidation of a patent in PGR triggers patent owner estoppel, which bars a patent owner from obtaining a patent on a claim unless the claim is patentably distinct from the invalidated claims.
 
In a separate PGR proceeding, PTAB stayed the reissue proceedings of USP 8,725,557 for the same reasons. The '557 Patent is also owned by Leachman and PTAB issued a Decision to Institute PGR based on American Simmental's petition for PGR on June 19, 2015.
 
For more information, please contact Ted Barthel at (414) 978-5317 or tbarthel@whdlaw.com, or Brianna Schonenberg at (414) 978-5567 or bschonenberg@whdlaw.com, or another member of the Intellectual Property Practice Group. We will be monitoring future PGR developments in these cases and others in this blog.  
  



PTAB Issues First Two Decisions to Institute Post Grant-Review on Same Day

by Brianna M. Schonenberg and Ted J. Barthel, posted Wednesday, June 24, 2015

Image
 
The America Invents Act (AIA) created the Post-Grant Review (PGR) proceeding before the U.S. Patent and Trademark Office's (USPTO) Patent Trial and Appeal Board (PTAB). PGR is a USPTO proceeding to review the validity of a granted AIA patent on any ground of patentability. To be eligible for PGR, a patent must contain a claim with an effective filing date on or after March 16, 2013. A petition for PGR must be filed within nine months of the date of patent grant. Any third party may use PGR to challenge a granted patent's validity. To date, 10 petitions for PGR have been filed-two PGRs settled before the PTAB issued a decision on institution, and one PGR was dismissed because the petitioner mistakenly filed a petition for Inter Partes Review as a petition for PGR. On June 19, 2015, PTAB issued its first two decisions to institute PGR. Read more...  



EPA Proposes Amendments to NSPS for Grain Elevators

by Phillip R. Bower, posted Tuesday, November 25, 2014

Image As part of a required Clean Air Act review process, the U.S. Environmental Protection Agency (EPA) recently proposed amendments to the new source performance standards (NSPS) for grain elevators found at 40 C.F.R. Part 60, Subpart DD. EPA is accepting comments on the proposal through Dec. 22, 2014. Read more...