Does Refusal to Register a Mark Violate the First Amendment?

by Dennis Crouch

USPTO v. Tam (Supreme Court 2017)

The Supreme Court today held oral arguments in the trademark battle over whether the rock band can register its name THE SLANTS. The PTO argues “no” because the name is disparaging to Asians and Congress does not allow registration of marks “which may disparage … persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” 15 U.S.C. § 1052 (known as Section 2(a) of the Lanham Act). Tam argues that the ban on registering disparaging marks violates his free-speech rights protected under the First Amendment of the US Constitution.

Congress shall make no law … abridging the freedom of speech, or of the press.

In its decision, the en banc Federal Circuit ruled against the government – finding that the anti-disparagement law and its application was unconstitutional and therefore invalid. The case will have a direct impact on the native-american sports-logo cases (“Redskins”), and may usher in a new golden era of fringe consumer products with disparaging names. In its brief, the Government wrote that it should not be forced to register marks “containing crude references to women based on parts of their anatomy; the most repellent racial slurs and white-supremacist slogans; and demeaning illustrations of the prophet Mohammed and other religious figures.” Of course, what the PTO is doing here is discrimination based upon viewpoint. If TAM wins here, the larger question will be whether fraudulent marks can also be denied going forward.

In my view, we clearly have viewpoint discrimination.  However, we have skipped the more fundamental question of whether ‘registration’ should count as speech in the first place — and here to be clear the allegation is that TAM’s speech has been impinged.  Another way of looking at the issue is simply that trademark registration is a government program – and for non-speech-limiting government programs, the government has more leeway to discriminate based upon someone’s viewpoint (at least without violating the First Amendment).  My concern for the case is outside of TM law — I wonder the extent that further strengthening the First Amendment to reach beyond usual speech cases will further empower entities to more generally avoid substantial government regulation based upon so-called “speech” concerns.  [E.g., EPA is violating speech rights of pro-polluters by not letting them pollute while allowing non-polluters do whatever they want…Entirely viewpoint based discrimination.]

[Read the Oral Arguments Transcript: 15-1293_l6gn1]

A few excerpts (not in chrono-order)

JUSTICE BREYER: Look. We’re creating, through government, a form of a property right, a certain form. That’s a trademark. It’s as if through government we created a certain kind of physical property right that certain people could dedicate a small part of their houses or land to Peaceful Grove. And in Peaceful Grove, you write messages, but peaceful messages. And above all, you don’t write messages that will provoke others to violence or bad feelings. Okay? Anything wrong with that? I can’t think of anything wrong with that. There are thousands of places where they can express hostile feelings. It’s just in this tiny place, one-quarter of an acre, that you yourself have chosen to take advantage of that you can’t because it will destroy the purpose. It will destroy the purpose of Peaceful Grove. That’s why I asked my question.

. . . .

MR. CONNELL: Marks constitute both commercial speech and noncommercial speech, and the disparagement clause specifically targets the noncommercial speech and denies registration to marks that only express negative views.

JUSTICE SOTOMAYOR: This is a bit different than most [First Amendment] cases. No one is stopping your client from calling itself The Slants. No one is stopping them from advertising themselves that way, or signing contracts that way, or engaging in any activity, except that stopping someone else from using the same trademark. But even that they could do. Because you don’t need a registered trademark to sue under the Lanham Act’s entitlement for the confusion of the public in the use of any kind of registered or unregistered mark. If another band called themselves Slants, they would be subject to deceptive advertisements because they wouldn’t be this Slants. [Rather] your speech is not being burdened in any traditional way.

JUSTICE BREYER: [The provision] stops nobody from saying anything.

MR. CONNELL: In this case, the government has used the disparagement clause to selectively deny those legal benefits to a mark holder expressing negative views that the government favors, as opposed to mark holders who received those benefits because they express neutral or positive views that the government does favor. . . . It is a [speech] burden because our client is denied the benefits of legal protections that are necessary for him to compete in the marketplace with another band. And the only reason for the denial of those benefits is the burden on his noncommercial speech contained in the mark. . . . I think what the government is trying to do here is simply encourage commercial actors to conduct business in such a way as to not insult customers.

MR. STEWART: It places no restrictions on his ability to use the mark. It may limit the remedies that are available for infringement, but — but that’s entirely regulating the commercial aspects of the conduct.

. . . .

MR. STEWART (for the Government supporting the provision): The trademark registration program and trademarks generally have not historically served as vehicles for expression. That is, the Lanham Act defines trademark and service mark purely by reference to their source identification function. . . .

JUSTICE ALITO: Do you deny that trademarks are used for expressive purposes?

MR. STEWART: I don’t deny that trademarks are used for expressive purposes. As I was saying earlier, I think many commercial actors will pick a mark that will not only serve as a source identifier, but that will cast their products in an attractive light and/or that will communicate a message on some other topic. My only point is in deciding whether particular trademarks should be registered, Congress is entitled to focus exclusively on the source identification aspect. . . .

JUSTICE SOTOMAYOR: What purpose or objective of trademark protection does this particular disparagement provision help along or further?

MR. STEWART: I think Congress evidently concluded that disparaging trademarks would hinder commercial development in the following way: A trademark in and of itself is simply a source identifier … It is not expressive in its own right … and basically Congress says, as long as you are promoting your own product, saying nice things about people, we’ll put up with that level of distraction.

. . . .

JUSTICE SOTOMAYOR:  Your argument earlier was that if someone slanders or libels an individual by saying — Trump before he was a public figure — Trump is a thief and that becomes their trademark, that even if they go to court and prove that that’s a libel or a slander, that trademark would still exist and would be capable of use because otherwise canceling it would be an abridgment of the First Amendment?

MR. CONNELL: I believe that’s correct.

JUSTICE SOTOMAYOR: That makes no sense.




Bayh-Dole Act: Failing to Disclose Government Funding

Interesting filing from the folks at KEI. That alleges IONIS Pharma (formerly ISIS) and Cold Springs Harbor Labs failed to disclose Federal funding supported development of the inventions underlying their patents covering nusinersen and its for the treatment of spinal muscular atrophy (SMA).  See U.S. Patent Nos. 8,361,977 and 8,980,853.

The Bayh-Dole Act allows private entities to patent inventions developed through federal funding. However, the law requires that the federal funding be disclosed in order to allow the Government to understand and exercise its corresponding rights.

An entity that fails to disclose the funding is then subject to the penalty of title being awarded to the U.S. government – although the Government must demand title.  “The Federal Government may receive title to any subject invention not disclosed to it within such time.” 35 U.S.C. § 202(c)(1).

The KEI filing is in the form of a letter to Inspector General of HHS (parent of NIH) asking for an investigation and action.

Read the Filing: [18jan2017-oig-investigation-request-nusinersen-patents]

If the new Trump Administration is serious about high drug prices, this may be a place to start.  Nusinersen is priced at $750,000 for the first year of treatment and $375,000 for every year thereafter.


USPTO Transitions and Traditions

The USPTO only houses a handful of political appointees – Director (Michelle Lee), Deputy Director (Russ Slifer), Chief of Staff (Vikrum Aiyer); and a couple more senior advisors including the Chief Communications Officer (Patrick Ross). These folks will all resign on or before noon on Inauguration Day, January 20, 2017.  Through an Agency procedure put in place by former Director James Rogan, Commissioner for Patents (Drew Hirshfeld) will then step-in as acting director.  One unlikely potential kink in the tradition is that this is the first presidential transition with competing PTO leaders – namely the four Regional Office directors (John Cabeca, Molly Kocialski; Cristal Sheppard, and Hope Shimabuku) any of whom could step-in as acting director (recognizing that is the pathway taken by Michelle Lee).  However, the Regional Directors are really outside of the ordinary PTO chain of command.

Recognize that these transitions and traditions are subject to immediate adjustment by the incoming Trump Administration.  I would expect significant shake-up in PTO Senior Staff in the coming months: General Counsel, regional PTO Directors, and perhaps Solicitor and PTAB Director.   However, every president struggles through how to deal with career federal employees loyal to the efforts of the prior administration.

I want to give my congratulations and thanks to Michelle Lee, Russ Slifer, and other members of PTO Leadership.  The past five years have been a time of tremendous shifting in the patent system led by the legislature (the AIA of 2011) and the Supreme Court (Alice/Mayo).  PTO Leadership has offered a stabilizing force with a constant push toward an efficient and high quality system.  Many patentees were saved by by the PTO’s intentionally narrow reading of Alice and Mayo and the long-complaint-of backlog of pending cases is substantially reduced.  These days I hear two major competing complaints: (1) the PTO continues to issue too many invalid patents and (2) the PTAB is too tough on patentees.  It will be interesting to see where we arrive four years from now.

[Errors in this post are all mine, but I want to thank former PTO General Counsel Bernie Knight for helpful pointers]


Supreme Court 2017 – Patent Preview

by Dennis Crouch

A new Supreme Court justice will likely be in place by the end of April, although the Trump edition is unlikely to substantially shake-up patent law doctrine in the short term.

The Supreme Court has decided one patent case this term. Samsung (design patent damages).  Five more cases have been granted certiorari and are scheduled to be decided by mid June 2017. These include SCA Hygiene (whether laches applies in patent cases); Life Tech (infringement under 35 U.S.C. § 271(f)(1) for supplying single component); Impression Products (using patents as a personal property servitude); Sandoz (BPCIA patent dance); and last-but-not-least TC Heartland (Does the general definition of “residence” found in 28 U.S.C. 1391(c) apply to the patent venue statute 1400(b)).

Big news is that the Supreme Court granted writs of certiorari in the BPCIA dispute between Sandoz and Amgen.   The BPCIA can be thought of as the ‘Hatch Waxman of biologics’ – enacted as part of ObamaCare.   The provision offers automatic market exclusivity for twelve years for producers of pioneer biologics.   Those years of exclusivity enforced by the FDA – who will not approve a competitor’s expedited biosimilar  drug application during the exclusivity period.   The statute then provides for a process of exchanging patent and manufacturing information between a potential biosimilar producer and the pioneer – known as the patent dance.  The case here is the Court’s first chance to interpret the provisions of the law – the specific issue involves whether the pioneer (here Amgen) is required to ‘dance.’ [Andrew Williams has more @patentdocs]

A new eligibility petition by Matthew Powers in IPLearn-Focus v. Microsoft raises eligibility in a procedural form – Can a court properly find an abstract idea based only upon (1) the patent document and (2) attorney argument? (What if the only evidence presented supports eligibility?).  After reading claim 1 and 24 (24 is at issue) of U.S. Patent No. 8,538,320, you may see why the lower court bounced this. Federal Circuit affirmed the district court’s ruling without opinion under Federal Circuit Rule 36 and then denied IPLF’s petition for rehearing (again without opinion).

1. A computing system comprising:

a display;

an imaging sensor to sense a first feature of a user regarding a first volitional behavior of the user to produce a first set of measurements, the imaging sensor being detached from the first feature to sense the first feature, the first feature relating to the head of the user, and the first set of measurements including an image of the first feature, wherein the system further to sense a second feature of the user regarding a second volitional behavior of the user to produce a second set of measurements, the second feature not relating to the head of the user; and

a processor coupled to the imaging sensor and the display, the processor to:

analyze at least the first set and the second set of measurements; and determine whether to change what is to be presented by the display in view of the analysis.

24. A computing system as recited in claim 1, wherein the system capable of providing an indication regarding whether the user is paying attention to content presented by the display.

=== THE LIST===

1. 2016-2016 Decisions:

  • Design Patent Damages: Samsung Electronics Co. v. Apple Inc., No 15-777 (Total profits may be based upon either the entire product sold to consumers or a component);  GVR order in parallel case Systems, Inc. v. Nordock, Inc., No. 15-978.  These cases are now back before the Federal Circuit for the job of explaining when a component

2. Petitions Granted:

3. Petitions with Invited Views of SG (CVSG): 

4. Petitions for Writ of Certiorari Pending:

  • Is it a Patent Case?: Boston Scientific Corporation, et al. v. Mirowski Family Ventures, LLC, No. 16-470 (how closely must a state court “hew” federal court patent law precedents?) (Appeal from MD State Court)
  • Anticipation/Obviousness: Google Inc., et al. v. Arendi S A.R.L., et al., No. 16-626 (can “common sense” invalidate a patent claim that includes novel elements?) (Supreme Court has requested a brief in response)
  • Civil Procedure – Final Judgment: Johnson & Johnson Vision Care, Inc. v. Rembrandt Vision Technologies, L.P., No. 16-489 (Reopening final decision under R.60).
  • Anticipation/Obviousness: Enplas Corporation v. Seoul Semiconductor Co., Ltd., et al., No. 16-867 (“Whether a finding of anticipation under 35 U.S.C. § 102 must be supported by findings that each and every element of the subject patent claim is disclosed in the prior art?”)
  • Post Grant Admin: Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, et al., No. 16-712 (“Whether inter partes review … violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.”) [oilstatespetition]
  • Eligibility: IPLearn-Focus, LLC v. Microsoft Corp., No. 16-859 (evidence necessary for finding an abstract idea)
  • Post Grant Admin: SightSound Technologies, LLC v. Apple Inc., No. 16-483 (Can the Federal Circuit review USPTO decision to initiate an IPR on a ground never asserted by any party)
  • Is it a Patent Case?: Big Baboon, Inc. v. Michelle K. Lee, No. 16-496 (Appeal of APA seeking overturning of evidentiary admission findings during reexamination – heard by Federal Circuit or Regional Circuit?)
  • LachesMedinol Ltd. v. Cordis Corporation, et al., No. 15-998 (follow-on to SCA); Endotach LLC v. Cook Medical LLC, No. 16-127 (SCA Redux); Romag Fasteners, Inc. v. Fossil, Inc., et al, No. 16-202 (SCA Redux plus TM issue)
  • Eligibility and CBM: DataTreasury Corporation v. Fidelity National Information Services, Inc., No. 16-883 (I have not seen the petition yet, but underlying case challenged whether (1) case was properly classified as CBM and (2) whether PTAB properly ruled claims ineligible as abstract ideas) (Patent Nos. 5,910,988 and 6,032,137).

5. Petitions for Writ of Certiorari Denied or Dismissed:

Has the Academy Led Patent Law Astray?

Prof Jonathan Barnett (USC) has released his new article arguing that we’ve gone too-far — that those arguing for dramatic changes to the patent system did so with “little to no supporting evidence.” [READ IT HERE]. Barnett argues that

Depropertization of the patent system—yields three potential efficiency losses. First, depropertization impedes efficient resource allocation by shifting the pricing of technology assets from the relatively informed marketplace to relatively uninformed judges and regulators. Second, depropertization distorts markets’ organizational choices by inducing entities to undertake innovation and commercialization through vertically integrated structures, rather than contractual relationships now clouded by the prospect of judicial re-negotiation. Third, depropertization may facilitate oligopsonistic efforts to depress royalties on patent-protected inputs, resulting in wealth transfers to downstream entities and discouraging innovation by upstream R&D suppliers.

In the article, Barnett primarily focuses on the idea of a patent thicket and whether these patent thickets have inhibited downstream innovation.  Barnett concludes: “Without a secure expectation of injunctive relief and compensatory damages, false prophecies of too many patents may result in too little innovation.”  Of course this conclusion also rests upon weak empirical ground.


Supreme Court Grants Cert in Amgen v. Sandoz & Sandoz v. Amgen

By Jason Rantanen

Today, the Supreme Court granted certiorari in two dueling petitions involving the Federal Circuit’s 2015 interpretation of the Biologics Price Competition and Innovation Act of 2009.  Here are the questions presented:

Amgen v. Sandoz

(1) Whether a biosimilar applicant is required by 42 U.S.C. § 262(l)(2)(A) to provide the reference product sponsor with a copy of its biologics license application and related manufacturing information, which the statute says the applicant “shall provide;” and (2) whether, where an applicant fails to provide that required information, the sponsor’s sole recourse is to commence a declaratory judgment under 42 U.S.C. § 262(l)(9)(C) and/or a patent-infringement action under 35 U.S.C. § 271(e)(2)(C)(ii).

Sandoz v. Amgen

(1) Whether notice of commercial marketing given before Food and Drug Administration approval can be effective; and (2) whether, in any event, it is improper to treat Section 262(l)(8)(A) – the Biologics Price Competition and Innovation Act of 2009’s “Notice of commercial marketing” provision which states that a biosimilar applicant shall provide notice to the incumbent seller of the biological product “not later than 180 days before the date of the first commercial marketing of the biological product licensed under” an abbreviated pathway for biosimilars – as a stand-alone requirement and as creating an injunctive remedy that delays all biosimilars by 180 days after approval.

Kevin Noonan discussed the underlying opinion on the PatentDocs blog, describing it as “a seriously fractured decision….”

You can read the Federal Circuit opinion here:  s15-1499

Patent Quality: Where We Are

Guest Post by Professors Arti Rai (Duke) and Colleen Chien (Santa Clara).  Professors Rai and Chien both served in the Obama Administration.  

On the eve of a new Administration, it is useful to take stock of progress that has been made on patent quality over the last eight years, and particularly since February 2015, when the U.S. Patent and Trademark Office launched its Enhanced Patent Quality Initiative (EPQI).  In this contribution, we review progress to date and outline directions for the future.

Patent quality means agency decision making that is appropriate as a matter of both product and process – that is, legally correct, clear, consistent, and efficient.  Measuring correctness, clarity, consistency, and efficiency is difficult, however.  Achieving these goals can also entail significant resources – a challenge for an agency funded entirely by applicants.

When former USPTO Director David Kappos took the helm in 2009, budgetary strains and application backlog demanded immediate attention.  Even so, then-Director Kappos pushed through redesign of the agency’s IT system, gave an across-the-board increase in time to examiners, adjusted count allocation so as to reduce incentives for rework, and emphasized quality improvements through international worksharing, industry training, and the creation of the Common Patent Classification system.  Then, with the passage of the American Invents Act of 2011, the agency’s budgetary position stabilized and the stage was set for further focus on quality.  The backlog subsided, with the queue of patents reduced by 30% over the last eight years, according to statistics released by the USPTO.

Building on these steps, as well as executive actions to crowdsource prior art and technical training, the USPTO launched the EPQI in 2015. Introduced and championed by Director Michelle Lee, the EPQI comprises a group of initiatives that embrace not only the substantive goal of quality but also take seriously issues of measurement. In total, the EPQI comprises 12 different programs and initiatives. We focus here on four initiatives that have thus far yielded data: the Clarity of the Record Pilot; the Master Review Form for measuring quality; the USPTO’s case study on examiners’ use of Section 101; and the Post-Grant Outcomes Pilot.

The Clarity of the Record Pilot ran from March 5 to August 20, 2016 as an effort to train examiners on best practices with respect to claim interpretation, reasons for allowance, and interview summaries and to determine the impact on this training on their work relative to a control group.  Relative to the control group, the 125 trained examiners who examined 2600 cases averaged a 15% improvement in the clarity of their interview summary and a 25% improvement in the clarity of their reasons for allowance.  Notably, although examiners in the pilot were allowed as much time as they wanted, they reported using only about 4 more hours per bi-week than the control group.

On the quality measurement front, the PTO is using its new Master Review Form (MRF) to provide both reviewers at the Office of Patent Quality Assurance (OPQA) and Technology Center (TC) supervisors a single, comprehensive record of the accuracy and clarity of patent work products.  Historically, OPQA and TC supervisor reviews had used different criteria and only OPQA reviews were systematically recorded for identification of trends across different TCs.  Additionally, in contrast with prior quality scores used by the PTO, the quality metrics used in the MRF disaggregate product quality (legal correctness and clarity) from process quality (efficiency and consistency) as well as perceptions of quality.

Current data on product quality, focusing on compliance with the statutory requirements of Section 101; prior art (Sections 102 and 103); and Section 112, is available for reviews conducted in the 4th quarter of FY2016.  These data, admittedly self-reported, indicate compliance in about 97% of cases for Section 101; 88% of cases for prior art; and about 94% of cases for Section 112.

The USPTO’s case study on examiners’ use of Section 101, one of six stakeholder-requested case studies that the agency is currently conducting, examined a sample of 816 Office actions with an Alice/Mayo-type rejection issued between January 2016 and August 2016.  Overall, the study found that 90% of rejected claims were in fact ineligible under the USPTO’s 101 guidance.  However, only 75% of the substantively correct rejections were properly explained.  Rates of properly explained rejections rose significantly after the USPTO conducted training on Section 101 in May and June of 2016.

The USPTO Post-Grant Outcomes pilot provided examiners of pending applications that related to patents that were the subject of an AIA trial with the contents of the trial. This common-sense initiative, which ran from April to August 2016, aimed to alert examiners of highly relevant prior art, identify training opportunities, and build a bridge between PTAB and the examining corps. 44% of the 323 examiners surveyed by the USPTO reported that they had referred to references cited in the AIA trial petition when examining the child case.

Going forward, the USPTO is pursuing bold initiatives on automated pre-examination search and on revising time allocations for examiners, the latter which is the subject of a current request for comment. To carry out efficient, correct examination, examiners must have the appropriate amount of time to examine each individual application, which can vary, making these initiatives critical for improving quality.

Going forward, one important question that remains to be fully addressed is the extent to which examination should be an “one size fits all” enterprise.  In 2011, the USPTO established a separate Track 1 process for those applicants who need decisions made quickly.  Small and micro-sized firms have filed more than fifty percent of the Track 1 applications, even though such entities only represented twenty percent of applicants in 2015. (The heaviest individual users of the system are large firms, however.) For other applicants, it may be appropriate to offer options for deferred, “Track 3” examination.

With a go-ahead from Congress, the USPTO might also make available varied intensity of examination.  Thus applications that were more commercially valuable might be subject to heightened review, by peers or others, in exchange for greater protection from post-grant challenges. Conversely, applications that were filed for defensive reasons only could pay lower fees in exchange for a promise to limit patent use.

Another way to ensure that the quality conversation continues in public is to support continued transparency and measurement of progress on patent quality. The focus should be on objective, independently verifiable metrics such as the percentage of cases with examiner-cited non-patent literature, or the percentage of cases resolved through compact prosecution – “once and done.”  Facilitating tracking of such metrics not only by examiner but by Art Unit or Technology Center could stimulate some healthy competition and also help identify best practices.

For the new focus on metrics and quality two USPTO administrators in particular deserve credit – the Office of the Chief Economist and the Deputy Commissioner for Patent Quality. Together these positions and these personnel, newly created and appointed during the last 8 years, may indeed end up being some of this Administration’s most enduring legacies on patent quality.

= = = =

For an alternate viewpoint, read Gene Quinn’s post: Patently Surreal.

USPTO 2016 Performance and Accountability Report

By Jason Rantanen

Last week, the United States Patent and Trademark Office released its annual Performance and Accountability Report.  If you’ve never read this document before, I highly encourage giving it a look.  It’s chock-full of information on the PTO, from summary overviews to financials to performance metrics to changes in agency operation.  There’s also an extensive set of tables with tons of data for those who like that kind of stuff.

Law students and junior attorneys who want to quickly get up to speed on the PTO, in particular, can obtain a lot of information about the agency from the PAR.  But there’s something in there for everyone.

Here’s a link to the USPTO Chief Financial Officer’s blog post on the 2016 PAR:

And a direct link to the 2016 PAR:

Where are all the patent practitioners?

By Jason Rantanen

A question from two economist friends, Nicholas Ziebarth and Michael Andrews, got me interested in the geographic distribution of patent practitioners in the U.S. and any correlations with issued utility patents and populations.  Using the January 8, 2017 list of patent practitioners from the USPTO, the PTO’s data on utility patents issued to inventors by state, and population estimations for 2016 (wikipedia), I put together the following figures.  They show what one might expect: patents, population and patent attorneys exhibit high degrees of correlation, although there is some interesting variation.  All the linear regressions are highly significant (p<0.001).  Some data caveats follow.

patents-v-poppatents-v-practitionerpractitioners-v-popCalifornia is a clear outlier, as is probably D.C.  In the below charts I’ve removed California.  As you can see, the correlation coefficient goes down.  It’s not apparent due to the scaling of the graphs, but the slope of the line also goes down.  Removing D.C. (where there are lots of registered patent practitioners but few inventors) has the opposite effect when it comes to patents/patent practitioner.  To give another sense of the magnitude of the California effect, 19% (8124/43542) of this set of patent practitioners are California residents and 29% (40/196/140928) of this set of patents has a first named inventor who was a California resident.

patents-v-pop-no-capatents-v-practitioners-no-capractitioners-v-pop-no-ca(Iowa is marked in red.  We have a lower than average number of patent attorneys per population but a slightly higher than average number of patents with U.S. inventors per patent attorney.)

Notes on the data:

  • This analysis entirely ignores patents whose first named inventor is not resident in the 50 states and District of Columbia and patent practitioners who do not reside in those places.  When it comes to patents, this is big: since 2009, over half of issued patents have had a first-named inventor who was not a U.S. resident. It’s less of an effect with patent practitioners: of the 44,897 registered practitioners, 43,579 are U.S. residents.
  • The patent attorney list is subject to concerns about whether it is overinclusive, as discussed in Zachary Kinnaid’s previous posts, and how up-to-date the addresses are.  This comparison also involves data from different years (1/1/2017 versus patents granted in 2015), although there probably isn’t much a change in terms of geographic distribution of patent attorneys over the time. In addition, many registered patent attorneys do not currently engage in patent prosecution activities.
  • The data on patents-per-state is based on the residence of the first named inventor.   This means that the other inventors are ignored in this analysis.  It also means that assignments are not reflected.

My data file is linked if anyone wants to play around with it.  Regression outputs from Stata are here.  If you see any mistakes, I’d appreciate it if you’d let me know via email.  You are free to reuse this dataset or graphs, although I would appreciate an acknowledgement.

Utility Patents for 2016

The chart below shows the number of utility patents granted each year for the past few decades. I have included images of PTO chiefs as well. Although only small view of PTO work-product, the dramatic shifts in the number of grants (all occurring while facing a large backlog of cases) helps highlight the importance of the role of PTO Director.  You’ll note that more utility patents were issued in 2016 than any prior calendar year – 303,000.  However, the rate-of-increase seen under Dir. Kappos is clearly gone.



  • Non-animated version to the right.
  • Directors shown are Q.Todd Dickenson (1998-2001); Jon Dudas (2004-2009); David Kappos (2009-2013); and Michelle Lee (2014-2017). J.Rogan and the acting directors are not shown.


Post-PTO Trials: Party must Prove Injury-in-Fact for Appellate Standing

Phigenix v. ImmunoGen (Fed. Cir. 2017)

In this case, the patentee ImmunoGen won its case before the Patent Trial & Appeal Board (PTAB) with a judgment that the challenged claims are not obvious.  U.S. Patent No. 8,337,856. Phigenix appealed, but the appellate court has dismissed the case for lack of standing – holding that the challenger-appellant failed provide “sufficient proof establishing that it has suffered an injury in fact.”

Article III of the U.S. Constitution provides for federal judicial power over “cases [and] controversies.”  Although not found in the text, the Supreme Court requires existence of an “actual” conflict between the parties — thus prohibiting the courts from issuing advisory opinions.  The doctrine of standing requires that a plaintiff/appellant “have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the [defendant/appellee], (3) that is likely to be redressed by a favorable judicial decision.” (quoting Spokeo (2016)).  As a Constitional limit on judicial power, standing must always exist during a lawsuit and may be raised sua sponte by a trial or appellate court.

The case here began with Phigenix’ filing its inter partes review (IPR) petition.  Since the PTO/PTAB is an administrative agency empowered by statute and Article I of the Constitution, its power is not limited by Article III.  Thus, for IPR petitions, the PTO Director need not concern herself with the question of whether the petitioner has standing in the Federal Courts sense.  When the case is appealed, however, the appellant must provide the required proof of injury.

In this case, Phigenix is something of a competitor of the patentee ImmunoGen and, although Phigenix does not plan to use the patented invention itself (at this point the company is only a licensor), the appellant argues that the existence of the patent makes ImmunoGen a stronger market competitor – leading to actual economic injury. In the appeal, the Federal Circuit suggests that the injury might be sufficient – but that Phigenix failed to prove its existence.

The conclusory statements in the Gold Declaration and the [attorney] letter as to the hypothetical licensing injury therefore do not satisfy the requirements of Rule 56(c)(4).

Without providing the evidence of injury, the court could not hear the case.   The court also reiterated its prior position that the right-to-appeal created by 35 U.S.C. 141(c) does not replace the standing requirement. See Lujan and Consumer Watchdog.



Make Patents Great Again – PTO Speculation: Judge Rader?

Scott Graham of The National Law Journal reports that Chief Judge Rader is in the mix to be the next USPTO Director. Rader wrote hundreds of patent opinions during his 25 years on the Court of Appeals for the Federal Circuit, including four as Chief Judge.  Prior to joining the judiciary, Rader spent eight years as counsel to the Senate Judiciary Committee’s Subcommittee on Patents, Trademarks, and Copyrights.  He is a recipient of the Jefferson Medal for exceptional contributions to the field of intellectual property law.  In a fairly minor scandal, Judge Rader resigned from the bench in 2014.  At that time, I wrote:

Judge Rader is a longtime member of the court and has been a gregarious Chief Judge. His willingness to have frank and open discussions on a variety of patent law issues has been welcomed by the bar as has his work to build ties with patent law authorities from around the globe. Those connections will continue to serve the court well into the future. However, this outgoing approach has also been criticized as contrary to the traditions of judicial detachment and seclusion.

Judge Rader has the patent law and political expertise to do this job — question whether he would really want to run a 10,000 person organization.  Rader likely has strong support from President Pro Tempore of the United States Senate Orin Hatch

In my mind, the other leading candidate is Phil Johnson. The PTO directorship would serve as a capstone to a truly incredible career.   Trump and his team have substantial trademark experience, and so an internal dark-horse candidate is always likely.

Because of her ties to the Obama Administration, I see it as highly unlikely that current PTO director Michelle Lee would be asked to stay-on even temporarily in that position.

PTO Director wears many hats, but I see the primary job as leading the 10,000+ examiners and judges to ensure a high quality work product at a reasonable cost and speed.  Patent and trademark experience are certainly necessary – but I would think it is also important to have experience or understanding of managing such a large workforce of unionized employees.

Congratulations to Harold McElhinny on his retirement from MoFo; he has apparently refused calls from Trump Tower.



Separation of Powers Restoration Act

by Dennis Crouch

The Separation of Powers Restoration Act has been reintroduced in the House of Representatives (H.R. 76) and will likely be quickly passed either alone or as part of the larger Regulatory Accountability Act of 2017 (H.R. 5).  Although unclear at this point, Democrats may welcome the measure as it would substantially weaken executive agency power under President Trump by eliminating the deference courts typically give to agency determinations of law.

The amendment is applied to the Administrative Procedures Act, but is clear that it applies to “any action for judicial review of agency action authorized under any provision of law”:

(a) To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action and decide de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies. Notwithstanding any other provision of law, this subsection shall apply in any action for judicial review of agency action authorized under any provision of law. No law may exempt any such civil action from the application of this section except by specific reference to this section.


Proposed amendment to 5 U.S.C. 706.

For the PTO, the change would open the door to challenge the PTO’s implementation of its PTAB Trial procedures as well as examination procedures, examination requirements, etc since any “rule” created by the PTO can be challenged with de novo review as well as any questions of law (even where the PTO has authority to make those determinations and was previously given deference).

Congressional Republicans likely want to push this through quickly before the Trump administration recognizes the substantial power that the amendment would take away from the Presidency.


Proving the existence of Functional Limitations in the Prior Art

In re Chudik (Fed. Cir. 2017)

This non-precedential decision offers a nice refresher on the law of anticipation for functional claim elements and discusses the patent casebook favorite – In re Schreiber, 128 F.3d 1473 (Fed. Cir. 1997).

In Schreiber, all of the structural limitations of a popcorn funnel were found in a prior art oil can spout.  However, the prior art did not expressly teach that the oil spout would “allows several kernels of popped popcorn to pass through at the same time.”  In its decision, the Federal Circuit held that the “where the Patent Office has reason to believe that a functional limitation … may, in fact, be an inherent characteristic of the prior art” the PTO can shift the burden to the applicant to prove that the prior art does not possess the characteristic.  (Quoting In re Swinehart, 439 F.2d 210 (C.C.P.A. 1971)).

Here, the court writes:

The price [of including functional limitations is] that when the structural limitations are met by a single prior art reference, and when the examiner “has reason to believe” that the prior art reference inherently teaches the functional limitation, the burden shifts to the patent applicant to show that the functional limitation cannot be met by the single prior art reference.

Of course, the benefit of functional claim limitations is that they can offer broad scope with little linguistic difficulty.  This case also shows how these functional limitations help avoid prior art.

In Chudik’s case, there is no dispute that all of the structural limitations for the claimed surgical scalpel are found within a single prior art reference. U.S. Patent No. 5,843,108 (“Samuels”).  A difference is that, Chudik’s invention is “configured for creating a passageway through skin and soft-tissue to a target site on a bone” while Samuels blade was designed for merely making ‘nicks’ in the skin for catheter insertion.  The examiner/PTAB concluded that the Samuels blade nicking could reach a shallow bone – and thus satisfied the limitation.

On appeal, the Federal Circuit has reversed — finding that the examiner did not have (or at least explain) a substantial ‘reason to believe’ that the prior art inherently taught the functional limitation of being configured to reach a bone.

The [PTO] gave no justification for this belief, and nothing in Samuels offers an indication of the size of the blade or indicates that it would be able to contact subdermal anatomical features. If anything, Samuels explains that its design specifically prevents incisions that could damage structures near the skin. The examiner and the Board failed to explain how the Samuels blade could be employed in a manner to reach a shallow bone, but without the “disastrous consequences” that the blocker in Samuels is designed to prevent. For that reason, the examiner failed to make the necessary prima facie showing to shift the burden of going forward the applicant.

Reversed and remanded. It will be interesting to see whether the PTO now issues the patent or reopens prosecution with an obviousness rejection.


Patentlyo Bits and Bytes by Anthony McCain

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Why a strong patent system is vital

Prof. Dolin on Patents and Russia in the Washington Times:

Last month was the 25th anniversary of the dissolution of the Soviet Union, marking the end of the Cold War. Just a few years earlier, it seemed unfathomable that a world superpower would simply disband. And yet, the USSR was destined to lose its confrontation with the U.S. despite having more nuclear weapons, being first in space, having a larger army, and sitting on a much bigger cache of natural resources. The reason was the insurmountable American lead in innovation. . . .

The reason we out-innovated the USSR is rooted in the American system that treats inventions as any other property, subject to the full protection of the law. . . . [In the US,] the government doesn’t guarantee any return to the inventor. . . . [And] Inventors achieve commercial success either because their inventions are marketed directly to mass consumers or because they are adopted by various companies. Those inventors who do not find a market niche have to go back to the drawing board. This process ensures a constant stream of real innovation — one that benefits real consumers. . . . A strong patent system is vital to ensuring continued economic flourishing.

G.Dolin is correct in many ways.  The major problem with his analysis is the way that he focuses solely on the patent system motivating individual inventors.  Although such motivation exists, in the US and around the world, the patent system is primarily used by corporate entities with few inventors receiving substantial upside value of their inventions.  Rather, as in Russia, invention is part of the job description of many engineers and those engineers usually receive only a token for their successes rather than a share of the resulting profits.

Ignoring Nautilus: Sonix Tech. v. Publications Int’l

Sonix Tech. v. Publications Int’l (Fed. Cir. 2017)

The district court awarded summary judgment to the defendant — finding the asserted claims invalid as indefinite under 35 U.S.C. § 112 ¶ 2.  On appeal, the Federal Circuit has reversed finding that the claim was still reasonably certain even with the claim term “visually negligible.”

Section 112 ¶ 2 (now 112(b)) requires claims that “particularly point[] out and distinctly claim[] the subject matter which the inventor or a joint inventor regards as the invention.”  This statement has been is the source of the “definiteness requirement.”  In Nautilus (2014) the Supreme Court interpreted the requirement as demanding that “a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty.”  Indefinite claims of an issued patent are invalid and thus unenforceable.  However, the Federal Circuit has repeatedly stated that (and reiterates here) that “Indefiniteness must be proven by clear and convincing evidence.”

Sonix’s U.S. Patent 7,328,845 covers a “visually negligible” graphical indicator and its use to encode information on the surface of an object.  The specification notes that this visually-negligible requirement is the primary benefit of its system over prior art encoding methods such as a barcode.  Figure 12 below shows the difference in the prior art 12(a) and the invention 12(b).

Although ‘visually negligible’ is not quite expressly defined by the specification, a potential definition is found in the invention summary:

The graphical indicators co-exist with main information, such as a text or picture, on the surface of object, and do not interfere with the perception of human eyes to the main information. A user retrieves the graphical indicators through an electronic system that does not couple with the object and acquires additional information from the graphical indicators.

Later, the specification also provides details on how to create a visually negligible indicator by using an array of “graphical micro-units” that “can be reduced further such that the combination … of the graphical micro-units is visually negligible or is viewed as a background material by human eyes.”  The specification goes on to explain that best results come from micro-units “so tiny that only a microscope apparatus can detect it”; so small that “human eyes cannot differentiate one graphical indicator from others”; and that when “arranged loosely … the user easily neglects the combination … of graphical micro-units and pays attention to main information.”   The patent also calls-out three factors used to create negligibility: differentiability, brightness, and homogeneity.

With this background in mind, the Federal Circuit found that it could construe “visually negligible” as asking whether “something interferes with a user’s perception” and “involves what can be seen by the normal human eye.”  As such, the court found that the claim term does provide an “objective baseline through which to interpret the claims.”  Unfortunately for those of us looking for clarity in opinion-writing, Judge Lourie failed to indicate where he found the “normal human eye” baseline – since it is found nowhere in the patent documents or even elsewhere in the 19-page opinion.  In any event, the “normal human eye” baseline means that the term is not “purely subjective.”

The court continued – finding that – “an accused infringer could compare the examples and criteria from the written description … to determine whether [any given] indicator is visually negligible.”  In the process, the court distinguishes cases such as Datamize and Interval Licensing.

The presumption of validity also helped the patentee — with the court finding that “Appellees have not provided evidence that human perception varies so significantly that reliance on it as a standard renders the claims indefinite.”

= = = = =

Right result here – however, the court again does a poor job by reiterating its blanket statement that indefiniteness must be proven with clear and convincing evidence.  But, indefiniteness is a question of law and the clear-and-convincing standard is historically directed to factual conclusions made by a court rather than questions of law.

A second problem with this decision as well as the rest of the court’s post-Nautilus jurisprudence is that the opinion fails to describe or define what it means by ‘reasonable certainty.’

Finally, as suggested above, the “normal” human eye baseline created by Judge Lourie was apparently pulled from nowhere.  The proposal was found nowhere in the patent document or the briefing.  However, the court must have felt this term necessary to overcome its prior precedent requiring objective boundaries.

= = = = =

One thing that likely saved the patentee here is that the patentee was not seeking to unduly broaden the scope of this claim term — i.e., the accused infringers products clearly used visually negligible indicator standards.

Wi-Fi One v. Broadcom: Mine-Runs and Shenanigans in Inter Partes Review

by Dennis Crouch

Wi-Fi One v. Broadcom (Fed. Cir. 2017)

First en banc order of the year: the Federal Circuit will review the following question:

Should this court overrule Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) and hold that judicial review is available for a patent owner to challenge the PTO’s determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review?

en banc order. Briefs of amicus curiae may be filed without consent.

One Year Filing Deadline: Section 315(b) creates a statute of limitations for inter partes review proceedings – indicating that the petition for IPR must be filed within one-year of “the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”  Here, Wi-Fi argues that Broadcom was in privity with entities involved in parallel district court litigation involving challenged patents — creating a time bar under 315(b).

The PTAB rejected Wi-Fi’s argument and call for discovery on the issue — holding that the “privy” requirement could only be met if Broadcom had the right to control the District Court litigation.

No Appeal: On appeal, the Federal Circuit affirmed – holding Section 314(d) prohibits appellate review of the institution issue.  In particular Section 314(d) states that

The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

In Achates, the court ruled that the one-year-deadline determination is an institution decision – “even if such assessment is reconsidered during the merits phase of proceedins and restated as part of the Board’s final written decision.”

In the background stands the 2016 Supreme Court decision in Cuozzo.  In that case, the Supreme Court gave effect to the no-appeal provision of 314(d).  However, the Supreme Court noted that unusual questions – such as constitutional questions – might still be appealable.  The foundation for the en banc review decision will be its interpretation of the following Cuozzo excerpts:

We conclude that [314(d)], though it may not bar consideration of a constitutional question, for example, does bar judicial review of the kind of mine-run claim at issue here, involving the Patent Office’s decision to institute inter partes review. . . .

Nevertheless, in light of §314(d)’s own text and the presumption favoring review, we emphasize that our interpretation applies where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review. See §314(d) (barring appeals of “determinations . . . to initiate an inter partes review under this section” (emphasis added)). This means that we need not, and do not, decide the precise effect of §314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond “this section.” . . .  Thus, contrary to the dissent’s suggestion, we do not categorically preclude review of a final decision where a petition fails to give “sufficient notice” such that there is a due process problem with the entire proceeding, nor does our interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for “indefiniteness under §112” in inter partes review. Such “shenanigans” may be properly reviewable in the context of §319 and under the Administrative Procedure Act, which enables reviewing courts to “set aside agency action” that is “contrary to constitutional right,” “in excess of statutory jurisdiction,” or “arbitrary [and] capricious.”

The question then for court is whether we have a shenanigan here.



When is the PTO’s claim construction “reasonable”?

dagostinoimageD’Agostino v. Mastercard (Fed. Cir. 2016)

John D’Agostino’s patents cover processes for creating limited-use transaction codes to improve credit card security. U.S. Patent Nos. 7,840,486 and 8,036,988.  The approach basically keeps the card number out of the hands of the merchant (where most scamming occurs).  After being sued for infringement, MasterCard filed for inter partes review and successfully challenged many of the claims as obvious and anticipated by Cohen (U.S. Patent No. 6,422,462). On appeal, however, the Federal Circuit has vacated – holding that the PTAB’s claim interpretation was unreasonable.

Claim construction continues its reign as a messy hairball.  Rather than looking to the “proper” claim construction as defined by Phillips v. AWH, the PTAB defines claims according to their Broadest Reasonable Construction (BRI). That approach largely follows Phillips, but allows the PTO to select the “broadest” construction for any given limitation from the potential set of reasonable constructions.  The express intent here is to broaden the claims in order to make it easier to invalidate them during the IPR process. The idea then is that claims which survive the IPR-scope-puffery-gauntlet will be strong – giving confidence to judges and juries and fear into the hearts of infringers.

Reasonable is a Question of Law: In most areas of law ‘reasonableness‘ is considered a factual conclusion and conclusions regarding reasonableness are given deference on appeal.  The Federal Circuit however has ruled that the reasonableness of claim construction in the BRI context is reviewed de novo on appeal. Unfortunately, the court has not provided much helpful guidance in terms of knowing when a given construction is reasonable.  Their koan states that – although the BRI construction need not be the correct interpretation, the chosen BRI construction may not be “a legally incorrect interpretation.” (Quoting Skvorecz 2009).

Here, the question was whether the claims required a temporal separation between two communications.  The PTAB said no – since it was not expressly required and broadened the claims.   On appeal, the court looked at the claims and found that the express language did in fact require two separate communications: A first request that occurs “prior to” the merchant being identified  and then a second communication that includes the merchant ID.  According to the court, the PTAB’s interpretation (allowing for a single communication) was simply not reasonable.

On remand, the PTAB will decide whether the prior art the claim elements as they are more narrowly defined.

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PTO Bound by its own Prior Construction?: Interesting issue ducked by the Federal Circuit involved the prior reexam of the patent where the PTO expressly narrowly construed the same claim scope. Court did not remark on the patentee’s suggestion here that PTO should be bound by its prior express constructions.  Seems reasonable to me.