More Confusion on Trump’s Next USPTO Director

departmentofcommerceFolks are having fun today with Federasl Government web page conversions.

We still do not have confirmation that Michelle Lee will stay-on as Under Secretary of Commerce for Intellectual Property and USPTO Director.  The newly updated COMMERCE.GOV website shows the position vacant while other positions remain filled.

It should all be figured out by Monday.

If you remember, Dir. Lee’s initial appointment by President Obama was also filled with some amount of discord and confusion a la The Office with her “acting as director” for several months before actually being nominated for the position.

Michelle Lee, Acting as Director but not “Acting Director”


Major Crossover Move: Michelle Lee Staying on as PTO Director?

The Hill and others are reporting that USPTO Director Michelle Lee will stay on as PTO Director under President Trump.  No official statement yet (perhaps because PTO Chief Communications officer Patrick Ross resigned yesterday).



Patentlyo Bits and Bytes by Anthony McCain

Get a Job doing Patent Law                  

Trading Technologies: User Interface for Stock Trading

Before writing more about Trading Technologies v. CQG, I will first note that TT is my former client and I personally filed the original complaint in this very case 12 years ago (2005).  Although TT is no longer my client, I am bound by and respect the rules of professional ethics and the duties owed to former clients.  

The new non-precedential opinion from the Federal Circuit affirms the district court ruling that TT’s asserted claims are patent eligible.

The patent claims here cover a computerized method and system used for trading stocks and similar products.  When buying and selling stocks, speed and accuracy are both critically important and in this invention, TT created a Graphical-User-Interface design (and operational software) that helps traders buy and sell stock more quickly and more accurately. See U.S. Patents No. 6,772,132 and No. 6,766,304.

The court writes:

It is not disputed that the TTI System improves the accuracy of trader transactions, utilizing a software implemented programmatic [method]. For Section 101 purposes, precedent does not consider the substantive criteria of patentability. For Section 101 purposes, the claimed subject matter is “directed to a specific improvement to the way computers operate,” Enfish, for the claimed graphical user interface method imparts a specific functionality to a trading system “directed to a specific implementation of a solution to a problem in the software arts.” Id.

The opinion is authored by Judge Newman and joined by Judges O’Malley and Wallach.  The court’s opinion is a short and interesting read:

Precedent has recognized that specific technologic modifications to solve a problem or improve the functioning of a known system generally produce patent-eligible subject matter. … [I]neligible claims generally lack steps or limitations specific to solution of a problem, or improvement in the functioning of technology.

For some computer-implemented methods, software may be essential to conduct the contemplated improvements. Enfish… Abstraction is avoided or overcome when a proposed new application or computer-implemented function is not simply the generalized use of a computer as a tool to conduct a known or obvious process, but instead is an improvement to the capability of the system as a whole.

We reiterate the Court’s recognition that “at some level, all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Alice, quoting Mayo. This threshold level of eligibility is often usefully explored by way of the substantive statutory criteria of patentability, for an invention that is new, useful and unobvious is more readily distinguished from the generalized knowledge that characterizes ineligible subject matter. This analysis is facilitated by the Court’s guidance whereby the claims are viewed in accordance with “the general rule that patent claims ‘must be considered as a whole’.” Alice, quoting Diamond v. Diehr.

As demonstrated in recent jurisprudence directed to eligibility, and as illustrated in the cases cited ante, the claim elements are considered in combination for evaluation under Alice Step 1, and then individually when Alice Step 2 is reached. Applying an overview of this evolving jurisprudence, the public interest in innovative advance is best served when close questions of eligibility are considered along with the understanding flowing from review of the patentability criteria of novelty, unobviousness, and enablement, for when these classical criteria are evaluated, the issue of subject matter eligibility is placed in the context of the patent-based incentive to technologic progress.


The patents are also currently being challenged on 101 grounds in CBM proceedings before the USPTO.  Although I feel that it should have a direct impact, it is unclear to me whether this decision will impact the PTO proceedings addressing the identical question.  (For instance, the court here holds that the patent covers a technological invention – and CBM proceedings can only proceed for non-technological inventions.) Patentees may also consider petitioning the court to make this decision precedential.

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.