November 2008

BPAI: “Programmed Computer Method” Not Patentable Subject Matter

Ex parte Halligan (BPAI 2008)

Halligan’s patent application claims a “programmed computer method” that operates to identify trade secret information. (Claim 119). In essence, the computer program has the common law rules of trade secrets hardcoded, and those rules are applied to determine whether particular information is a “trade secret.” Applying the machine-or-transformation test of Bilski, the Board of Patent Appeals and Interferences (BPAI) rejected Halligan’s claims as lacking patentable subject matter under 35 USC § 101.

Under Bilski, “[a] claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” To avoid preemption the Federal Circuit emphasized that “the use of a specific machine or transformation of an article must impose meaningful limits on the claim’s scope to impart patent-eligibility;” that “the involvement of the machine or transformation in the claimed process must not merely be insignificant extra-solution activity;” and that the transformation “must be central to the purpose of the claimed process.”

Transformation: As in Bilski, the transformation here involves legal rights and “does not represent physical and tangible objects.” Therefore, it fails the transformation prong of the test.

Machine: Claim 119′s only tie to a machine is the preamble statement that the method is a “programmed computer method.” The BPAI listed several reasons why that recitation is insufficient to satisfy the machine prong of Bilski:

“This recitation fails to impose any meaningful limits on the claim’s scope as it adds nothing more than a general purpose computer that has been programmed in an unspecified manner to implement the functional steps recited in the claims. Were the recitation of a “programmed computer” in combination with purely functional recitations of method steps, where the functions are implemented using an unspecified algorithm, sufficient to transform otherwise unpatentable method steps into a patent eligible process, this would exalt form over substance and would allow pre-emption of the fundamental principle present in the non-machine implemented method by the addition of the mere recitation of a “programmed computer.” Such a field-of-use limitation is insufficient to render an otherwise ineligible process claim patent eligible.”

Means-Plus-Function language: A second set of claims were directed to the “programmed computer.” Functional elements of the software were described as “means for ___.” The structure of a means plus function element is presumably particular enough to constitute a “particular machine.” However, the BPAI expressly did not reach that issue – rather, the Board rejected those claims under 35 USC § 112 as indefinite for lacking any description of particular structure in the specification. Following Aristocrat, the opinion noted that software-type means should include a disclosure of an algorithm. “The Appellant has failed to disclose any algorithm, and thus has failed to adequately describe sufficient structure, for performing the recited functions of claims 1 and 121 so as to render the claims definite.”

Notes:

   

Patently-O Bits and Bytes

  • Poor Economic Forecast and Patent Prosecution:
    • Bad: Patent value is based on potential market for patented products when the market shrinks, so does the value of the patents;
    • Bad: Patent prosecution is generally a cash-heavy endeavor, and many firms are low on cash/credit;
    • Bad: The smaller market and lack of cash may also depress research & development expenditures – potentially leading to a time-lagged depression in patent applications.
    • Good: When times are tough, folks save their scraps. Patents are one way to do that;
    • Good: Patents are something that can be more easily sold or licensed (as compared with trade secrets, for instance). Companies looking for alternative cash streams; to sell-off portions of the corporation; or to retain some value in bankruptcy may look to patent protection.
  • I spent a summer at Heller Ehrman while in law school. The firm dissolved earlier this fall. Using Patent Buddy, I graphed the number of registered patent practitioners at Heller over the past several years. Their patent department shows problems stretching back to 2007.

  • Figure 2 below shows the same information for the law firm of Akin Gump. Patent Buddy’s data comes directly from the PTO’s enrollment database. That database is usually a bit outdated because many patent attorneys are slow to update their records.

   

  

Patently-O Bits and Bytes

  • Poor Economic Forecast and Patent Prosecution:
    • Bad: Patent value is based on potential market for patented products when the market shrinks, so does the value of the patents;
    • Bad: Patent prosecution is generally a cash-heavy endeavor, and many firms are low on cash/credit;
    • Bad: The smaller market and lack of cash may also depress research & development expenditures – potentially leading to a time-lagged depression in patent applications.
    • Good: When times are tough, folks save their scraps. Patents are one way to do that;
    • Good: Patents are something that can be more easily sold or licensed (as compared with trade secrets, for instance). Companies looking for alternative cash streams; to sell-off portions of the corporation; or to retain some value in bankruptcy may look to patent protection.
  • I spent a summer at Heller Ehrman while in law school. The firm dissolved earlier this fall. Using Patent Buddy, I graphed the number of registered patent practitioners at Heller over the past several years. Their patent department shows problems stretching back to 2007.

  • Figure 2 below shows the same information for the law firm of Akin Gump. Patent Buddy’s data comes directly from the PTO’s enrollment database. That database is usually a bit outdated because many patent attorneys are slow to update their records.

 
 

  

Federal Circuit Internal Operating Procedure

The Court of Appeals for the Federal Circuit generally follows its own set of “internal operating procedures.” Although these are not citable rules, they do represent the usual standard practice for the court. The court provides them to the public to try to steer appellate practice away from a purely old boy system and allow the public to understand the court’s process. Transparency is especially important for the Federal Circuit. Although located in Washington DC, the court’s jurisdiction reaches across the nation. And, lawyers from across the country come to DC to argue on behalf of their clients. The Federal Circuit – especially Judge Michel – should be commended for its work toward a more open system that is more transparent than ever. The court has done an excellent job with its online public release of new opinions that provides equal access to new information. That system is especially important when a case involves a major product (such as a blockbuster pharmaceutical) of a publicly traded company. The audio files have also been useful for non-Washington insiders to understand the impact of particular oral arguments. The court is working on the next step –immediate online access to briefs and other pleadings.

Back to the new procedures: Anyone planning to practice before the court should read the internal operating procedures. In a recent update, the court provided two additional bits of information about its operation. The first statement describes the process of selecting three judge panels. According to the court, the three-judge panels are randomly selected, subject to the availability of each judge.

“The chief judge provides to the clerk’s office a list of judges that are available for each day of an argument session. The clerk’s office runs a computer program that randomly generates three-judge panels for each month, subject to the judges’ availability.”

The second new discussion in the IOP explains how pre-release precedential opinions are circulated to all Federal Circuit judges and the “senior technical assistant” prior to publication. Non-panel members have seven working days to provide comments or request that publication be held pending en banc poll.

“When all panel votes are in on a precedential opinion or order, the authoring judge circulates the opinion and any concurring or dissenting opinions, with a transmittal sheet, to each judge. A copy is also circulated to the senior technical assistant (STA), and the STA shall provide information on potential conflicts between the panel-approved opinion and any other prior opinions of the court or other relevant precedents. The nonpanel members of the court will have seven working days (twelve working days for opinions circulated during the summer period) to review a circulated precedential opinion or order. Nonpanel members may send comments to the authoring judge, to the panel, or to all judges. A nonpanel member judge in regular active service may submit a hold sheet pending a request for an en banc poll. Absent transmittal of a hold sheet or a request for an en banc poll during the circulation period, the authoring judge sends the opinion, and any concurring or dissenting opinions, to the ASO for copying and delivery to the clerk for issuance.”

Notes:

  • Revised IOP [PDF file]
  • Mark Davies Book on Federal Circuit Appellate Procedure:

Federal Circuit Internal Operating Procedure

The Court of Appeals for the Federal Circuit generally follows its own set of “internal operating procedures.” Although these are not citable rules, they do represent the usual standard practice for the court. The court provides them to the public to try to steer appellate practice away from a purely old boy system and allow the public to understand the court’s process. Transparency is especially important for the Federal Circuit. Although located in Washington DC, the court’s jurisdiction reaches across the nation. And, lawyers from across the country come to DC to argue on behalf of their clients. The Federal Circuit – especially Judge Michel – should be commended for its work toward a more open system that is more transparent than ever. The court has done an excellent job with its online public release of new opinions that provides equal access to new information. That system is especially important when a case involves a major product (such as a blockbuster pharmaceutical) of a publicly traded company. The audio files have also been useful for non-Washington insiders to understand the impact of particular oral arguments. The court is working on the next step –immediate online access to briefs and other pleadings.

Back to the new procedures: Anyone planning to practice before the court should read the internal operating procedures. In a recent update, the court provided two additional bits of information about its operation. The first statement describes the process of selecting three judge panels. According to the court, the three-judge panels are randomly selected, subject to the availability of each judge.

“The chief judge provides to the clerk’s office a list of judges that are available for each day of an argument session. The clerk’s office runs a computer program that randomly generates three-judge panels for each month, subject to the judges’ availability.”

The second new discussion in the IOP explains how pre-release precedential opinions are circulated to all Federal Circuit judges and the “senior technical assistant” prior to publication. Non-panel members have seven working days to provide comments or request that publication be held pending en banc poll.

“When all panel votes are in on a precedential opinion or order, the authoring judge circulates the opinion and any concurring or dissenting opinions, with a transmittal sheet, to each judge. A copy is also circulated to the senior technical assistant (STA), and the STA shall provide information on potential conflicts between the panel-approved opinion and any other prior opinions of the court or other relevant precedents. The nonpanel members of the court will have seven working days (twelve working days for opinions circulated during the summer period) to review a circulated precedential opinion or order. Nonpanel members may send comments to the authoring judge, to the panel, or to all judges. A nonpanel member judge in regular active service may submit a hold sheet pending a request for an en banc poll. Absent transmittal of a hold sheet or a request for an en banc poll during the circulation period, the authoring judge sends the opinion, and any concurring or dissenting opinions, to the ASO for copying and delivery to the clerk for issuance.”

Notes:

  • Revised IOP [PDF file]
  • Mark Davies Book on Federal Circuit Appellate Procedure:

Leader Tech v. Facebook (D.D.E. 2008)

On November 19, Leader Tech sued Facebook for patent infringement of its U.S. Patent No. 7,139,761. The ’761 patent claims priority to a provisional application filed in December 2002 – well before Facebook’s 2004 launch. The patent claims are difficult for me to understand:

1. A computer-implemented network-based system that facilitates management of data, comprising:

  • a computer-implemented context component of the network-based system for capturing context information associated with user-defined data created by user interaction of a user in a first context of the network-based system, the context component dynamically storing the context information in metadata associated with the user-defined data, the user-defined data and metadata stored on a storage component of the network-based system; and
  • a computer-implemented tracking component of the network-based system for tracking a change of the user from the first context to a second context of the network-based system and dynamically updating the stored metadata based on the change, wherein the user accesses the data from the second context.

Facebook has also been sued for patent infringement by PA Advisors (Patent No. 6,199,067; dismissed with consent of parties) and Cross Atlantic Capital Partners (Patent No. 6,519,629; Litigation stayed pending reexamination).

Rewarding Breakthrough Innovation

I understand that design patents are worth only a fraction of their utility patent namesakes. Each year, the number of design patent applications are only a small fraction of the number of utility patent applications filed., and design patents are – on average – less valuable than utility patents.

I do believe that utility patent law can learn something from design patent law. Let’s start with the recent en banc design patent case of Egyptian Goddess v. Swisa. In that case, the Federal Circuit defined the meaning of “infringement” of a design patent. The test created by the court looks to whether an “ordinary observer” who is “familiar with the prior art” would find an accused design “substantially similar” to the patented design. Thus, the test looks for substantial similarity in the context of the prior art.

“When the differences between the claimed and accused design are viewed in light of the prior art, the attention of the hypothetical ordinary observer will be drawn to those aspects of the claimed design that differ from the prior art. And when the claimed design is close to the prior art designs, small differences between the accused design and the claimed design are likely to be important to the eye of the hypothetical ordinary observer.”

Another way of interpreting the Egyptian Goddess test is that the scope of infringement varies inversely with the scope of prior art. When a patented design is in a field crowded with similar prior designs, the only infringing designs will be those that are strikingly similar to the patented design yet different from the prior art. Alternatively, when the patented design stands alone as a breakthrough design, the potential variety of infringing activity actually increases.

I like the idea of rewarding breakthrough innovations that go beyond ordinary invention. Here, Egyptian Goddess does that by increasing the potential claim scope when the invention goes well beyond the prior art. The question here is whether the law of utility patents can be arranged to likewise provide the best rewards for the most innovative creations.

Citation of law review articles

Citation of law review articles. On a lark, I looked at the table of authorities for about two hundred party briefs filed in the past six months at the Federal Circuit.  These briefs each cited many cases and statutes.  Notably absent, however, were cites to law review articles. Out of the two hundred briefs, only two law review articles were cited — three if you count a citation to John Duffy’s Patently-O Patent L.J. article. The famous articles:

  • Jeffrey S. Dillen, DNA Patentability – Anything But Obvious, 1997 Wis. L. Rev. 1023 (1997)
  • John F. Duffy, Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21.
  • Mark A. Lemley et al., Divided Infringement Claims, 33 AIPLA Q.J. 225(2005).

This result goes along with the rule of thumb for Federal Circuit appellate briefs — cite only Federal Circuit cases unless you have a compelling reason to do otherwise.

Patently-O Bits and Bytes No. 78

  • FTC Hearings on the “evolving IP marketplace” http://www.ftc.gov/opa/2008/11/ipmarketplace.shtm. December 5. How it will play out: In the next year, the FTC will likely publish a new report on the state of patent law in the US. That report will serve as the basis for any patent reform measures in 2010.
  • Interesting article by Jim Klaiber in IP Today. He writes about a recent nonprecedential CAFC that seemingly expanded the limitations on claim amendments during reexamination. His piece is titled: Reexamination Amendments Made for an Improper Purpose – A New Basis For Invalidity Under 35 U.S.C. § 305.
  • I am now on twitter: http://twitter.com/patentlyo. tweet tweet.
  • The Federal District Courts in New Jersey are contemplating new local patent rules. IPO offers its “six principles” for local patent rules:
    • (1) early identification and mutual mandatory disclosure of essential infringement and validity-related discovery and consideration of staying non-essential discovery until after a claim construction decision is issued in a case;
    • (2) early disclosure and appropriate staging of detailed infringement and invalidity contentions;
    • (3) early supplementation of detailed infringement and invalidity contentions supported by identification of specific evidence produced in the early mandatory disclosures;
    • (4) scheduling any claim construction procedure early in the case but after detailed contentions have been exchanged;
    • (5) identification of claim limitations most important to the outcome of the case; and
    • (6) consideration of dispositive motions as early as appropriate to narrow issues or resolve cases without non-essential discovery.
  • TIME: Best Inventions of 2008
  • Wish List 2008: For the past few years, I have assembled a top-ten list of holiday gifts for patent attorneys and agents. I have heard from several spouses that actually used the list. So – let Santa’s helper (me) know if there are any particular machines or articles that should make the list.

Patently-O Bits and Bytes No. 78

  • FTC Hearings on the “evolving IP marketplace” http://www.ftc.gov/opa/2008/11/ipmarketplace.shtm. December 5. How it will play out: In the next year, the FTC will likely publish a new report on the state of patent law in the US. That report will serve as the basis for any patent reform measures in 2010.
  • Interesting article by Jim Klaiber in IP Today. He writes about a recent nonprecedential CAFC that seemingly expanded the limitations on claim amendments during reexamination. His piece is titled: Reexamination Amendments Made for an Improper Purpose – A New Basis For Invalidity Under 35 U.S.C. § 305.
  • I am now on twitter: http://twitter.com/patentlyo. tweet tweet.
  • The Federal District Courts in New Jersey are contemplating new local patent rules. IPO offers its “six principles” for local patent rules:
    • (1) early identification and mutual mandatory disclosure of essential infringement and validity-related discovery and consideration of staying non-essential discovery until after a claim construction decision is issued in a case;
    • (2) early disclosure and appropriate staging of detailed infringement and invalidity contentions;
    • (3) early supplementation of detailed infringement and invalidity contentions supported by identification of specific evidence produced in the early mandatory disclosures;
    • (4) scheduling any claim construction procedure early in the case but after detailed contentions have been exchanged;
    • (5) identification of claim limitations most important to the outcome of the case; and
    • (6) consideration of dispositive motions as early as appropriate to narrow issues or resolve cases without non-essential discovery.
  • TIME: Best Inventions of 2008
  • Wish List 2008: For the past few years, I have assembled a top-ten list of holiday gifts for patent attorneys and agents. I have heard from several spouses that actually used the list. So – let Santa’s helper (me) know if there are any particular machines or articles that should make the list.

Software Method Claims: Bilski in light of Benson

In re Bilski and Gottschalk v. Benson

It is important to remember that the Supreme Court’s decision in Gottschalk v. Benson is still controlling law. In that 1972 decision, the Supreme Court held unpatentable a method of converting a signal from “binary coded decimal” into “binary.” The Benson method operates by using a “reentrant shift register” – a particular electronic memory circuit of the day. The rejected claim reads as follows:

8. The method of converting signals from binary coded decimal form into binary which comprises the steps of:

  • storing the binary coded decimal signals in a reentrant shift register,
  • shifting the signals to the right by at least three places, until there is a binary `1′ in the second position of said register,
  • masking out said binary `1′ in said second position of said register,
  • adding a binary `1′ to the first position of said register,
  • shifting the signals to the left by two positions,
  • adding a `1′ to said first position, and
  • shifting the signals to the right by at least three positions in preparation for a succeeding binary `1′ in the second position of said register.

In Bilski, the en banc court struggles with Benson because – on its face – the rejected Claim 8 from Benson satisfies the machine-or-transformation test of Bilski. The claimed BCD conversion method is tied to a particular machine. The Bilski majority admits as much: “the claimed process operated on a machine, a digital computer, but was still held to be ineligible subject matter.” According to the en banc panel however Benson’s claim still fails the machine-or-transformation test because the claimed physical limits were “not actually limiting.” In particular, since the only uses of the BCD converter would be on a computer, tying the claims to a computer offered no practical limitation to the otherwise preemptive claim of an algorithm.

“[I]n Benson, the limitations tying the process to a computer were not actually limiting because the fundamental principle at issue, a particular algorithm, had no utility other than operating on a digital computer.”

Thus under Bilski/Benson, tying a software algorithm to particular computer hardware may well be unpatentable subject matter if the patent would still preclude all practical uses of the otherwise unpatentable algorithm.

Notes:

  • Patently-Unobvious suggests that careful drafting could have avoided the whole problem for Benson: “If only the inventors had been less forthcoming, more obtuse, and called their claim a method for operating a shift register, who would have seen that the machine-implemented signal processing method surprisingly also happens to convert a binary coded decimal signal into a binary coded one?”

NonObviousness: Analogous Arts Test Still Strong

Andersen v. Pella (Fed. Cir. 2008)(non-precedential)

Andersen sued Pella and WL Gore for infringement of its window screen patent. Apparently, the patented screen allows ventilation and blocks insects, but is easier to see through than traditional screens. The claims focus on the diameter and strength of the screen wires and as well as on the screen’s “transmittance” and “reflectance” properties.

Prior to KSR, the district court had rejected the defendant’s summary judgment motions on obviousness – finding that the prior art references lacked a motivation to combine. After KSR, the district court reversed course – this time granting summary judgment of invalidity based on obviousness of the claimed screen. In its analysis, the district court asked and answered the following question: “would an insect screen manufacturer of ordinary skill have found it obvious to use the [prior art] screening material, decrease its reflectance value, bond it, and place it in a window frame? The answer, plain and simple is ‘Yes.’” According to the lower court, the prior art mesh was the “heart” of the claimed invention, and it was a “simple act of common sense” to slightly modify the mesh and apply it to a window. Although secondary factors of nonobviousness were shown, the lower court found they were not enough to rebut a strong showing of obviousness.

Analogous Arts: On appeal, the Federal Circuit vacated – finding material facts that prevent summary judgment of obviousness. In particular, the appellate panel found that the prior art mesh might not count as nonobviousness type prior art because it “outside the scope and content of the prior art.” The court based its decision on three issues: (1) the prior mesh was not in the same “insect screen manufacturing field”; (2) there was some evidence that the prior mesh would not be useable for an insect screen (teaching away); and (3) the PTO specifically considered the reference before granting the patent and should be given some deference.

Upon our review of the record in the light most favorable to Andersen, we find support adequate to overcome summary judgment on the question of whether the TWP mesh was outside the scope and content of the prior art. Andersen put forth evidence in the record that, one, the TWP mesh was not part of the insect screen manufacturing field, and, two, an insect screen manufacturer would have read the prior art to teach away from using a mesh with the characteristics possessed by the TWP mesh. This field-of-invention and teaching-away evidence, combined with the deference owed to the PTO’s issuance of this patent after reviewing the same prior art references that form the basis of this obviousness challenge, raises a genuine issue of material fact as to whether an ordinarily skilled insect screen designer would have found the combination of the TWP mesh with the other prior art references obvious.

Teaching away and price feasibility: One of the ‘teaching away’ arguments accepted by the Federal Circuit was that of price infeasibility. Andersen had argued that the prior mesh would not have been considered by a designer because it was quite “extraordinarily expensive.” In its holding, the appellate panel gave backing to the notion that a high price would discourage consideration of a potential prior art reference.

As to the third characteristic, pricing, Andersen’s expert, Laurence Armstrong, stated that the TWP mesh was “extraordinarily expensive in comparison with traditional insect screen material, costing about $75.00 per square foot.” It is not unreasonable to suggest that a significant difference in cost could discourage an insect screen designer from using the more expensive mesh. . . . On the whole, we think, the record creates a genuine issue of material fact as to whether the durability, transparency, and pricing of the TWP mesh would have discouraged an ordinarily skilled artisan from incorporating the mesh into an insect screen.

Summary judgment vacated.

New PPAC Members

The Secretary of Commerce (with the advice of the PTO Director) has named three new member of the Patent Public Advisory Committee (PPAC): Marc Adler; Stephen Pinkos; and Maureen Toohey. Mr. Adler is well known in the patent community as the past president of both the IPO and the ACPC. Adler has called for patent quality reforms that put more responsibilities on both the PTO and Applicants. Stephen Pinkos is a former deputy director of the PTO where he managed daily operations of the office. Maureen Toohey has her own law firm in Boston. She has apparently represented Dean Kamen in the past and clerked for Judge Rader.

The committee’s purpose is to advise the PTO Director on the management of operations of the Office. The nine-member PPAC is on a three-year rotating schedule. Each year three new members are appointed. For each day of actual service, the PPAC members will be paid the equivalent of an Executive Level III salary (annual rate of about $150,000).

Patently-O Bits and Bytes No. 77

Malpractice and the Statute of Limitations

Wright v. Renaldo, 279 Mich. App. 526 (Mich. Ct. App. 2008)

Wright sued Renaldo and her firm for legal malpractice involving the prosecution of his patent directed to an absorbent mat. Renaldo allegedly erred in (1) failing to remove the name of an originally listed co-inventor; (2) “improperly drafted documents submitted to the patent office, and (3) failed to recognize and take steps to correct the patent because it did not adequately protect Wright’s invention.”

Without reaching the merits of the malpractice claim, the court agreed that the claim was barred by a Michigan two-year statute of limitations. Under Michigan law, a plaintiff “must file a legal-malpractice action within two years of the attorney’s last day of service to the plaintiff or within six months of when the plaintiff discovered or should have discovered the claim, whichever is later.” Here, there was evidence that Wright had been planning a malpractice claim for over two years after White revoked her power of attorney and hired different counsel.

A dissenting judge argued that the two-year time line had not expired because Renaldo had not learned of the revocation of the power of attorney until much later.

Although the patent attorney won this case, it should serve as a reminder to counsel to promptly memorialize a disengagement.

Patent Practice: Annual Practitioner Maintenance Fee.

[NEW RULES] The USPTO has announced final rules to implement an annual practitioner maintenance fee. According to the new rules effective December 17, 2008, a practitioner who fails “to pay the annual practitioner maintenance fee required under § 11.8(d) [will] be administratively suspended.” Easy to remember, the Fee under Section 11.8 is $118.

What is the point: The $118 fee will raise two or three million dollars for the PTO. Although that money is useful, the primary purpose of the fee is not to raise money. Rather, it an easy way to cull the list of registered practitioners by removing those who are not making money as patent attorneys. In the words of the office, the purposes of the fee include “protecting the public, preserving the integrity of the Office, and maintaining high professional standards.”

When folks forget to pay:


[A] paper submitted in good faith by a practitioner who does not know that he or she has been administratively suspended for failure to pay the annual practitioner maintenance fee will be

treated as unsigned. In the case of a new complete application, the applicant will receive a filing date because the signature of an attorney or agent on transmittal papers is not required. In the case of an unsigned bona fide response to an Office action, the submission will be treated in accordance with 37 CFR

1.135(c), and applicant may be given a new period of time to supply the omission. Practitioners should be aware, however, that submission of a response having an omission may affect patent term adjustment pursuant to 37 CFR 1.704(c)(7). In the case of an issue fee payment, an unsigned issue fee transmittal form may lead to abandonment of the application, in which case a petition to revive would be required.

 Who can afford this?


The Office estimates that, in 2006, the average annual income in the United States of solo practitioners was $231,777; of patent attorneys who are partners in private firms, $434,464; of patent attorneys who are associates in private firms, $152,677; and of corporate IP attorneys, $198,109; and the average annual salary of patent agents in a firm in the United States was $92,761. AIPLA Report of the Economic Survey 2007.

In many ways, the high average incomes of patent attorneys and patent agents are due to the limits created by the PTO.  When only a few can practice patent law, those few are able to charge higher prices.  Under traditional protectionist thinking, the Bar would want to take steps that solidify the monopoly by encouraging further barriers to entry and take pains to show that the limits on practice lead to better results.

Notes:

  • These final rules are based on a minor portion of a five-year-old 2003 notice of proposed rulemaking. [LINK]
  • The proposed rules would have added continuing education requirements as well.
  • At that time, the AIPLA stated that it was “conceptionally … not opposed to an annual fee for registered practitioners.” The organization was, however, concerned with the practicalities of paying and with the problems created by attorneys forgetting to pay.
  • The following anonymous coment was submitted in response to the 2003 rule proposal:

Dear Bureaucrats:

Stuff your annual fees for attorneys and agents. You are really getting to be a bunch of greedy pigs. The fee structure is venal and complex enough as it is. Actually taxes should pay for mast of the PTO, but while you are not to blame for that, your asskissing desire to show your superiors haw you can rake in profits with nasty, petty little fees for ever trivial action is on your heads.

Stuff your continuing education also. If you people would keep your Rules of Practice up to date and written in intelligible language instead of insider bureaucratic gobbledygook there would be no need for continuing education. How hard is is to keep your Rules up to date in this era of wordprocessing? If the Manual of Patent Examining Procedure has grown from 1 inch to 5 inches in the span of a couple of decades, maybe the problem is with too many stupid petty rules and fees to understand. God knows writing patent applications isn’t that hard. We need a five inch manual for this?

Are you people martyrs over there? All I ever hear is whining and attitude that the public should do all the work in prosecuting patent applications so the poor bureaucrats can twiddle their thumbs. Why don’t you get it over with and specify that applicants should do a self?examination as to patentability and swear that it is accurate under penalty of law so that the Patent Office doesn’t have to do anything? You people are out of control. It is time the the PTO is privatized so we get less attitude.

Graham Analysis Not Necessary for Obviousness-Type Double Patenting Rejection

In re Baselle Poliolefine Italia (Fed. Cir. 2008)

Nobel Prize winning chemist Giulio Natta filed for patent protection in 1954 on a process for polymerizing ethylene. One of Natta’s continuation patents issued in 2002. Later that year, the PTO initiated a Director-ordered reexamination based on obviousness type double patenting. Later, the BPAI affirmed the rejection. On appeal, the Federal Circuit affirmed the rejection in a 2-1 split. The majority held that the one-way obviousness type double patenting rejection was appropriate. Judge Newman dissented – arguing that the reexamination was conducted illegally and that the court’s findings were unsupported by the evidence.

The interesting legal issue here is the reminder that the obviousness determination for double patenting may be different than Section 103(a) obviousness.

Indeed, “this court has endorsed an obviousness determination similar to, but not necessarily the same as, that undertaken under 35 U.S.C. § 103 in determining the propriety of a rejection for double patenting.” In re Braat, 937 F.2d 589 (Fed. Cir. 1991). Hence, we find no basis for reversing the Board’s decision merely because the Board failed to expressly set forth each of the Graham factors in its analysis. The Board carefully considered claim 1 of the ’987 patent and the claims of the ’687 patent and determined that a person of ordinary skill in the art would have found the ’687 patent claims to have been obvious. We find no error in the Board’s analysis.

Of historical interest here is the timeline:

  • 1954: Natta files Italian Appn. No. 25,109.
  • 1955: Natta files US Appn. No. 04/514,098 patented in 1971 as No. 3,582,987.
  • 1955: Natta files US Appn. No. 04/514,097 (now abandoned) claiming priority to the Italian appn.
  • 1958: Natta files US Appn. No. 04/710,840 (now abandoned) as divisional of the ’097 appn.
  • 1958 – 1983: “multiple interferences.”
  • 1983: Natta files US Appn. No. 06/498,699 (now abandoned) as continuation of the ’840 appn.
  • 1986: Natta files US Appn. No. 06/906,600 (now abandoned) as continuation of the ’699 appn.
  • 1990: Natta files US Appn. No. 07/607,215 (now abandoned) as continuation of the ’600 appn.
  • 1991: Natta files US Appn. No. 07/719,666 (now abandoned) as continuation of the ’215 appn.
  • 1992: Natta files US Appn. No. 07/883,912 as continuation of the ’666 application.
  • 1999: CAFC decides in re Natta, 194 F.3d 1333 (both parties agreed to further examination).
  • 2002: PTO issues Patent No. 6,365,687 based on ’912 appn.
  • 2002: PTO orders reexamination of the ’687 patent based on double patenting.
  • 2008: CAFC affirms invalidity of the ’687 patent based on obviousness type double patenting (as compared to the ’987 patent).

Patent Reform: Next Stop USPTO

Ron Katznelson has become a leading patent data guru. In a recent talk at UC Davis Law School, he presented is ideas that the next focus of patent reform should be on USPTO Operations. His focus remains on (1) pendency and (2) quality without limiting patentee rights. Katznelson calls for an optional deferred examination for those applicants willing to go slow. In his schema, a third party worried about a pending application could request examination of a deferred application. With some financial incentives (such as a substantial examination fee), many voluntary deferred applications may become voluntary abandoned claims due based on obsolescence or low market potential (creating a “substantial workload reduction”).

As shown below –the pendency problem is growing.

Katznelson also discussed the enjoined PTO continuation & claim rules. The beautiful graph below helps illustrate the significant number (about 30%) of patent applications having more than 5 independent or 25 dependent claims.

On the continuation side, Katznelson had to resort to a logarithmic axis to show the continuity chain distribution at the PTO.

Notes:

Patently-O Bits and Bytes

Next PTO Directors: The PTO has 200 years of inertia and set expectations. Today, the PTO is a billion-dollar enterprise and the PTO Director’s first job is to manage that ship. However, the director should also have a visions and goals for the future of the PTO and the patent system. Along with Chief Judge Michel and a few other key players, the PTO director is seen as the leader of the US patent system. The vision of the next director will have a great impact on the potential for patent reform; international patent cooperation; and the role for industrial design protection. Part of Obama’s overall agenda is to move toward an open and transparent government. The PTO has come a long way, but the new director and deputy should be on board with ways to increase the communication channels and the ability for third parties and competitors to monitor the patenting process. Many are calling for the next PTO director to have patent prosecution experience. I agree that such experience will be helpful – both in understanding the system and for credibility. However, being a career prosecutor does not necessarily coincide with having the vision and leadership necessary for the job. Lots of speculation on upcoming PTO Officials.

  • But first: The National Academy of Science published a book suggesting guidelines for the “most critical” Science and Technology Appointments of the new administration. PTO appointments do not make the list.
  • John Doll is expected to become the PTO director temporarily until a new director and deputy are appointed. At that point, he will most likely move back to his role as Commissioner of Patents.
  • Several sources (perhaps stemming from the same core) have identified former PTO trademark examiner Shanna Winters as a potential successor to either Mr. Dudas or Ms. Peterlin. Ms. Winters played a key role in the passage of the properly maligned House Patent Reform Act of 2007. Her staff position in the House is necessarily shifting as the IP subcommittee is being abolished. Patent reform in the next Congress will be dealt with directly by the Judiciary Committee – led by Rep Conyers.
  • Some are calling for Todd Dickinson to return to his former post. He recently took over as executive director of the AIPLA.
  • Professors Rai, Lemley, Noveck, Lesseg (and the vast majority of other law professors) have been strong Obama supporters. Professor Rai was a classmate of Obama at Harvard Law School. She was Executive Editor of the Harvard Civil Rights-Civil Liberties Law Review while Obama led the Harvard Law Review.
  • I would be fully behind the nomination of Kevin Noonan.  (* Full Disclosure – Kevin is a partner at MBHB, my former employer and the primary Patently-O advertiser).
  • I suspect that none of these folks will get the call.
  • Notes: Joff Wild (qualities of PTO director); Gene Quinn (Nominating Paul Kamenski); Hal Wegner (“If you had a very good, honest broker that both sides could admire and respect, then common elements could be found in a solution.”)

Stanford IP Litigation Clearinghouse: Speaking of Mark Lemley – He and attorney Joshua Walker (who also knows Obama…) are leading an amazing new project titled the Stanford IP Litigation Clearinghouse. The free service tracks over 23,000 US District Court cases filed since 2000 and includes in depth real time information “that cannot be found elsewhere in the public domain.” [Invitation to Launch]

Wii Infringing? Motiva has sued Nintendo in the Eastern District of Texas. The young superstar plaintiff’s attorney Mark Lanier is representing the patentee. U.S. Patent 7,292,151. In his blog, Blaise Mouttet noted the potential that the Wii infringed back in 2007. [Link]

How Long Do I Wait for a First Office Action [Updated Data]

Based on the USPTO’s most recent numbers on examination, I created an updated table of the average delay until a first office action is mailed from the PTO. These numbers reflect an average for each technology center as it operates today.  The 3.7 year delay in Fuel Cell and Battery Technology (TC 1795) means that the applications receiving first office actions from that TC during the past three months were filed 3.7 years ago on average — taking us back to early 2005.  The numbers do not necessarily reflect how long it would take for an application filed today to make it through. (Although it is perhaps one of the better estimates that we have on hand.).

Technology Center

Description

Months

Years

1795

Fuel cells batteries solar

44.8

3.7

1791

Tires, adhesive bonding, glass

43.8

3.7

1797

Separation, purification

43.8

3.7

1610

Pharmaceutical formulations

42.9

3.6

3680-B

Business Methods

42.3

3.5

3620

Electronic Commerce

40.7

3.4

1792

Coating etching cleaning

40.4

3.4

1794

Food stock materials

39.4

3.3

2130

Cryptography security

39.2

3.3

2140

Computer networks

38.8

3.2

2190

Interprocess communications

38.5

3.2

2620

Television and TV Recording

37.2

3.1

1796

Organic chemistry and polymers

35.4

3.0

1793

Metallurgy metal working

34.9

2.9

2610

Digital Communications General

34.8

2.9

1620

Organic chemistry

34.1

2.8

3640

Aeronautics

34.1

2.8

3680-A

Business Methods – Finance

33.9

2.8

3630

Static structures

30.5

2.5

3650

Material handling

29.3

2.4

2110

Computer architecture

29.2

2.4

3610

Surface transportation

29.1

2.4

2120

Miscellaneous computer

28.3

2.4

3780

Package and Article Carriers

26.9

2.2

2160

Database and file management

26.9

2.2

3670

Wells earth boring

26.7

2.2

3680-A

Machine elements

26.7

2.2

1630

Molecular biology

25.9

2.2

1650

Fermentation microbiology

25.6

2.1

2180

Computer architecture

24.9

2.1

3750

Fluid handling and

24.9

2.1

1640

Immunology receptor ligands

24.2

2.0

2811+

Semiconductors and

23.9

2.0

2871+

Liquid crystals optical

23.7

2.0

3730

Medical instruments

23.4

2.0

3710

Amusement

22.9

1.9

2816+

Electronic circuits static

22.6

1.9

3660

Computerized vehicle

22.4

1.9

3770

Respirators Therapeutic

21.9

1.8

2831+

Electronic conductors

21.9

1.8

3760

Body treatment

21.4

1.8

1660

Plants

21.3

1.8

3720

Manufacturing devices

20.4

1.7