Preparing for 101 Change: Preserving Future Argume

Preparing for 101 Change: Preserving Future Arguments
By Scott McKeown & Matthew Rizzolo on June 4, 2019

Plan Ahead for 101 Change
With the Senate conducting marathon hearings on the subject of patentable subject matter this week (i.e., 35 U.S.C. § 101), and with significant effort to date to move legislation forward, it appears that 101 change is coming — and soon.

Given the imminent legislative reset, what should you do if your patent is invalidated by the Court’s under the current 101 regime?

First, you need to preserve your right to appeal and keep the case alive long enough for Congress to pass its new 101 framework. Depending on where you are in the process, this may require filing an appeal to the Federal Circuit, filing for rehearing or rehearing en banc, or filing for a writ of certiorari to the Supreme Court. Maintaining pendency is essential as it remains unclear whether the new 101 framework will be applied retroactively to existing cases and/or issued but unexpired patents and, if so, how it will be applied.

It seems unlikely that Congress would intend that this legislative framework, if passed, could be used to “revive” patents that have been subject to a final judgment of unpatentability by the Courts (more on that below). But it may opt to apply the law retroactively to any patent cases that are not yet final. It is therefore important that patent owners preserve all eligibility arguments to avoid waiving any rights.

Patent owners may argue that a significant change in law—even during the pendency of an appeal—is sufficient to seek a remand and re-determination under the new regime. For example, we can look to the Federal Circuit’s rulings in the wake of the Supreme Court’s SAS Institute for similar guidance. There, the court recognized that SAS represented a “significant change in law that occurred during the pendency of [the] appeal” and “[p]recedent holds that a party does not waive an argument that arises for a significant change in law during the pendency of an appeal.” Biodelivery Scis. Int’l., Inc. v. Aquestive Therapeutics, Inc., 898 F.3d 1205 (Fed. Cir. 2018) (quoting Polaris Indus. Inc. v. Arctic Cat, Inc., 724 Fed. Appx 948 (Fed. Cir. 2018). Indeed, the Fed Circuit agreed that Biodelivery’s failure to predict that the court would remand for SAS-related issues—even after the PTAB issued new statutory guidance on post-SAS procedures—did not constitute waiver of any arguments under SAS.

Applying similar logic to the current 101 framework, Patent Owners should expect that any change in 101 from Congress may constitute a “significant” change under the law allowing them to move for rehearing and remand under the new regime. Best practices, however, suggest maintaining all arguments to avoid the risk of waiver.

Moreover, it’s also important to keep in mind that claims held to be invalid in district courts are not actually canceled, like those held unpatentable in a PTAB proceeding — the only thing stopping patent owners from re-asserting such claims in the future is the principle of Blonder-Tongue collateral estoppel. If Congress doesn’t ultimately address whether the change in 101 law has a retroactive effect, we could see the situation where claims previously held invalid under current Section 101 law could be re-asserted in district court against new parties or products after legislative changes go into effect. It’ll be interesting to see if any witnesses or Representatives at the upcoming hearings address the potential creation of such “zombie patents.”