September 2009

Changing the USPTO Count System: Incrementally

USPTO Director David Kappos has announced a set of proposed changes to the patent examiner count system. The proposed changes are not dramatic, but they may have some incremental benefit of reducing RCE churning (see below). The proposal also provides for an additional hour of examination time per case with the expectation that the added time will be used up-front in an interview or in preparing a quality first office action on the merits (FAOM).

The Count System: Under the current count system, examiners receive “counts” for various actions and must meet a certain quota every two-weeks. (The quota varies according to art unit and examiner grade.) Under the rules, one count is awarded when the examiner issues an initial office action rejection and a second count is awarded when the case is disposed-of. Because no counts are awarded for second or subsequent office action rejections, the current system is supposed to encourage examiners to quickly move a case to its conclusion.

RCE Churning: When an applicant files a request for continued examination (RCE), the examiner receives a count as a disposal. At that point, the current count system treats the application as new – thus the examiner can receive a second count for mailing another office action rejection and one more count for eventually allowing the application to issue as a patent. Thus, by “forcing” the RCE, the examiner receives four counts instead of only two. (Note – “Forcing” is in quotation marks because examiner’s do not actually applicants to file RCEs.) A similar practice takes place with restrictions where the examiner pushes an applicant to divide a single patent application into multiple applications. In that scenario, the examiner can at times earn multiple counts for reexamining what are essentially identical inventions.

The proposed package would make some modifications – focusing especially on RCE practice. Under the proposal, the first RCE would only be worth 1.75 total counts (rather than 2) and any subsequent RCE can only be worth 1.5 counts. Examination of the original application would still be worth the same 2 counts, but the distribution is slightly shifted. Under the proposal, the first office action on the merits (FAOM) would garner 1.25 counts; a final rejection earns 0.25 counts; and eventual disposal leads to 0.5 more counts. If no final rejection is issued, then the disposal would be worth 0.75 counts. Thus, examiners will still receive credit for examining RCE’s – just less credit than before. The proposal does not appear to address the restriction practice.

Encouraging substantive interviews: The proposal would also regularly grant one-hour of “non-examining time” for preparing for and conducting interviews. This would effectively reduce the examination quota of examiners who conduct interviews.

Examiner Mistakes: The PTO management appears to have come to an agreement with the examiner union POPA on these reforms, although the membership will still be asked for their approval. Interestingly, the documents distributed by the joint task force appears to show some changes on the review of examiners for mistakes in office actions. Notably, the proposal would not allow an examiner to be negatively treated “based upon a single clear error in Patentability Determination” even if the examiner has already received a warning for prior mistakes.

The proposal also includes a new “formal policy” of “working on the earliest filed applications on [an examiner's] Regular New Case docket first.” This would block the game played by some examiners of cherry picking easier cases to examine earlier.   

Documents: briefing_for_corps_final_draft-093009.pdf

Claim Construction: A Structured Framework*

Guest post by Professor Peter S. Menell (UC-Berkeley School of Law); Matthew D. Powers (Weil, Gotshal & Manges LLP); and Steven C. Carlson (Fish & Richardson PC) 

The construction of patent claims plays a critical role in nearly every patent case. It is central to evaluation of infringement and validity, and can affect or determine the outcome of other significant issues such as unenforceability, enablement, and remedies. Yet jurists and scholars have long lamented the challenges of construing patent claim terms. The Federal Circuit’s en banc decision in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005), stands as the most authoritative decision on claim construction doctrine. But while putting to rest various controversies, many core tensions in claim construction persist. Moreover, the decision itself does not provide a step-by-step approach to construing claims. This commentary provides a structured road map.


Bilski Briefing: Government Argues that Section 101 “Processes” are limited to “technological and industrial processes.”

Bilski v. Kappos (Supreme Court 2009) 08-964bsUnitedStates.pdf

In its responsive brief, the Obama Administration asks the Supreme Court to confirm that a patentable process must be tethered to technology – either “directed to the operation of a particular machine or apparatus” or “involve the transformation of matter into a different state or thing.”

Interpreted in light of the historical scope and development of the patent laws, as well as the statutory context, the term “process” encompasses all technological and industrial processes, broadly conceived. But it does not extend patent-eligibility beyond those bounds, to methods of organizing human activity that are untethered to technology—e.g., methods by which people conduct economic, social, or legal tasks, such as entering into contracts, playing poker, or choosing a jury. Such methods fall outside of the broad expanse of technological and industrial fields that “the statute was enacted to protect.” Parker v. Flook, 437 U.S. 584, 593 (1978). Because petitioners’ hedging method relates solely to human conduct, untethered to any technology—any machine or transformation of matter—it falls outside the coverage of Section 101.

. . .

This Court has long recognized that the distinguishing feature of a technological process is that it concerns a particular machine or apparatus or effects a transformation of matter to a different state or thing.

Although Bilski’s claim does not relate directly to software, the machine-or-transformation could be seen to limit the patentability of software processes acting on a general purpose computer (as opposed to a “particular machine”). The Government brief suggests that the Federal Circuit test leaves software substantially patentable when tied to a general purpose computer – citing favorably to In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994) (en banc) (“[A] general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.”).

In any event, the machine-or-transformation test contemplates that many forms of “software” inventions are patent-eligible. . . . [However,] software code that is claimed by itself, uncoupled from any storage medium or computer, may be nothing more than “an idea without physical embodiment,” and therefore would not be patent-eligible.

Here, the brief did not address the reality that a software process can be “technological and industrial” without be limited in its association to a particular computer.

As a fall-back, the Government appears to suggest an additional exception to the patentable subject matter test for “methods of organizing human activity.”

Methods of organizing human activity are not patent-eligible “process[es]” within the meaning of Section 101.

The brief spends a considerable amount of time focusing on the statutory interpretation on the word “process” and its predecessor “useful arts” – paying special attention to provide an originalist style analysis. Here, the government attempts to show that finance (i.e., business methods) were not originally considered useful arts. Additionally, the government argued that even though tremendous advances took place in finance and insurance industries during the 18th and 19th centuries, those innovations were not traditionally patented.

In sum, because the initial patent statutes were intended to foster the “useful arts,” they were directed to technological and industrial inventions, as opposed to fields of purely human activity—including financial and economic activity unconnected to technology—which fell within the sciences or liberal arts.

Amicus briefs in support of the government position are due this Friday.

Bits and Bytes No. 131

  • IP Czar: George Mason visiting professor Victoria Espinel has been selected as the IP Enforcement Coordinator for the Administration – known as the IP Czar. The role will likely be more focused on international trademark and copyright issues rather than patent law issues. Her nomination must be confirmed by the senate. [LINK]
  • DC in DC: Next Thursday (1:30 p.m., October 1), I’ll be the opening speaker in GWU’s IP Speaker Series. My presentation considers the proposed first-to-file legislation and includes a new set of data the (low) frequency that applicant’s attempt to rely on their invention date during prosecution. The talk is open to GWU students, alumni as well as “friends.” Other speakers include Edward Walterscheid (Oct. 27); Zahr Stauffer (Oct. 29); Joseph Miller (Nov. 5); and Chris Cotropia (Nov. 19). [LINK]

Bits and Bytes No. 131

  • IP Czar: George Mason visiting professor Victoria Espinel has been selected as the IP Enforcement Coordinator for the Administration – known as the IP Czar. The role will likely be more focused on international trademark and copyright issues rather than patent law issues. Her nomination must be confirmed by the senate. [LINK]
  • DC in DC: Next Thursday (1:30 p.m., October 1), I’ll be the opening speaker in GWU’s IP Speaker Series. My presentation considers the proposed first-to-file legislation and includes a new set of data the (low) frequency that applicant’s attempt to rely on their invention date during prosecution. The talk is open to GWU students, alumni as well as “friends.” Other speakers include Edward Walterscheid (Oct. 27); Zahr Stauffer (Oct. 29); Joseph Miller (Nov. 5); and Chris Cotropia (Nov. 19). [LINK]

Bits and Bytes No. 131

  • IP Czar: George Mason visiting professor Victoria Espinel has been selected as the IP Enforcement Coordinator for the Administration – known as the IP Czar. The role will likely be more focused on international trademark and copyright issues rather than patent law issues. Her nomination must be confirmed by the senate. [LINK]
  • DC in DC: Next Thursday (1:30 p.m., October 1), I’ll be the opening speaker in GWU’s IP Speaker Series. My presentation considers the proposed first-to-file legislation and includes a new set of data the (low) frequency that applicant’s attempt to rely on their invention date during prosecution. The talk is open to GWU students, alumni as well as “friends.” Other speakers include Edward Walterscheid (Oct. 27); Zahr Stauffer (Oct. 29); Joseph Miller (Nov. 5); and Chris Cotropia (Nov. 19). [LINK]

Using Reexaminations to Avoid Willfulness Damages

Most patents currently being reexamined at the PTO are also being litigated in parallel proceedings in district court. This rise in importance of parallel reexaminations leads directly to both Constitutional controversies and practical problems. Although the Federal Circuit has nimbly attempted to avoid the problem, the truth is that both the PTO (an Article II executive agency) and the Article III Courts focus on the same question of validity of patent claims. These races to conclusion raise questions of both separation of powers and res judicata.

A practical issue is raised by Microsoft in the i4i case relates to the relevance of non-dispositive reexamination events to the question of willful infringement. In Microsoft’s case, the ex parte reexamination request was initially granted, and that grant was followed by a non-final office action rejection. On appeal, Microsoft argued that the PTO’s rejections of i4i’s claims on obviousness grounds should result in a per se finding that its its infringement defenses were not objectively reckless. Rather, according to Microsoft, the PTO’s grant of reexamination and non-final rejection at least serve to prove that its defenses were credible. i4i argues on the other side that the non-dispositive reexamination events are irrelevant because of the different standard for review, different claim construction approach, and lack of finality.

At the Santa Clara Law School conference that I attended yesterday, one panelist made a seeming reasonable suggestion – that courts should begin to reexamination results once an applicant agrees to amend or cancel claims being asserted during litigation. At that point, it is a foregone conclusion that the resulting reexamination certificate will not confirm the patentability of those pre-amended claims.

BPAI Statistics

The Board of Patent Appeals and Interferences has seen a tremendous upswing in its workload over the past couple of years. The swing was largely triggered by the prospect of rules limiting the filings of requests for continued examination (RCEs). However, it appears that applicants and patent attorneys – who are now familiar with the process – are continuing to see appeals as a viable alternative even though the RCE limits appears dead-in-the-water. Of course, the appeals have also been driven by the increasing percentage of applications being finally rejected by examiners.

In a recent presentation, BPAI Chief Judge Fleming provided a useful survey of the “state of the Board.” Highlights below.

  • In FY2009, the BPAI is expected to have decided over 7,000 cases. That represents more than a 40% increase over FY2008.
  • In addition, it is expected that over 15,000 cases will have been docketed to the BPAI in FY2009. That number is well over double those docketed in FY2008. This leaves an ‘inventory’ of about 12,500 cases.

In its current form, the BPAI cannot keep up with demand. By the end of FY2010, Judge Fleming expects the backlog to extend over 21,000 cases. The office currently has a three-prong approach to fixing the situation: (1) hiring more BPAI judges; (2) hiring more patent attorneys who essentially serve as law clerks, drafting opinions that are eventually approved by the Board; and (3) improving BPAI efficiency.


View the presentation: bpai_092109.pps

Using Claim Terms and their Synonyms

Edwards Lifesciences v. Cook, Inc. (Fed. Cir. 2009)

The four Edwards patents all relate to internal blood-vessel grafts for treating aneurisms. The grafts are designed to be inserted endovascularly without the need for open surgery. After construing the claims, N.D. Cal. District Court Judge Jeffrey White granted summary judgment of non-infringement to the two defendants, Cook and Gore. On appeal, the Federal Circuit affirmed.

Lumpy Claim Construction: Patent claim construction serves as a prime example of how litigators can take a simple issue and make it quite complicated. For their part, judges are keen to limit the issues. A common approach in claim construction is to group similar claim terms together and give them identical meaning. In this case, the patent used the terms “graft,” “graft body,” graft structure”, “bifurcated base structure,” and “bifurcated base graft structure.” Examining these terms, the appellate panel agreed that these terms could properly be analyzed together because the applicant had used them “interchangeably in the specification,” at least with respect to the disputed differences.

This risk of synonymous meaning is not necessarily bad. Using various terms to describe the same idea helps to flesh out the detail and scope of the idea. However, in most cases, applicants would probably be better off emphasizing distinctions between similar terms. The distinctions may well be useful for ensuring varied claim coverage.

The point from this case is that the distinctions between similar terms must be explicitly emphasized if the applicant wants to have confidence that it can later rely on the differences.

Broadening Claims:During prosecution, Edwards seemingly broadened some of its claims by amending the “intraluminar graft” elements to simply “graft” elements. Despite that change, the court found that the specification’s written description still required that all grafts be intraluminal.

Public Accessibility of Prior Art: PTO Must Provide Evidence of Indexing Date

In re Lister (Fed. Cir. 2009)

Lister is attempting to patent his method of playing golf that allows a player to tee-up each shot (except for hazards and greens). He filed his patent application in 1996. Two years prior, however, Lister had registered a copyright on his manuscript describing the game (acting pro se).

Based on the copyright submission, the examiner rejected the application as anticipated under Section 102(a) and barred under Section 102(b). The Board, however, eliminated the Section 102(a) rejection because “[Dr.] Lister could not have disclosed his own invention before he invented it.” However, the board did agree that manuscript’s availability at the copyright office did constitute prior publication under the statutory bar of Section 102(b). The touchstone for publication under Section 102(b) is public accessibility.

[The Board] concluded that an interested researcher would have been able to find the manuscript by searching the Copyright Office’s catalog by title for the word “golf” in combination with the word “handicap.” Additionally, the Board found that an individual seeking to view the manuscript would have been able to do so by visiting the Copyright Office. Finally, the Board rejected Dr. Lister’s arguments that the inconvenience of visiting the Copyright Office and the Copyright Office’s rules prohibiting individuals from making copies of the manuscript precluded a finding of public accessibility. With respect to the unavailability of copies, the Board found that the inventive concept was straightforward enough that it could be understood and retained by a person of ordinary skill in the art upon reading the manuscript without any need to obtain a copy.

Although there was no evidence that anyone actually looked at the manuscript, the Board held that public accessibility does not require that the document have been actually accessed.

On appeal, the Federal Circuit reversed – finding that (1) the availability of a manuscript in the copyright office does not necessarily meet the accessibility requirement of Section 102(b); and (2) in this case, the PTO did not prove that the document was publicly accessible.

This case is akin to other “library” cases where prior art is found covered in dust in a secluded section of a library. In those cases, the material is considered public if “it could be located by persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence.”

Here, the court found that the Library of Congress records did not create accessibility because those records were (at that time) not searchable by subject or keyword. Rather the LOC records could on be searched by title (beginning with the first word of the title of the article) or author last name.

The automated catalog was not sorted by subject matter and could only be searched by either the author’s last name or the first word of the title of the work.

On the other hand, LOC records (although not the full manuscript text) are also available through Westlaw and Dialog. In its decision, the appellate panel indicated that the search features available through those paid services were sufficient to make the records “publicly accessible.” However, the record did not indicate when Lister’s records became available through Westlaw or Dialog and thus those sources cannot be relied on as prior art.

Absent evidence of the date that the disclosure was publicly posted, if the publication itself does not include a publication date (or retrieval date), it cannot be relied upon as prior art under 35 U.S.C. 102(a) or (b). Quoting M.P.E.P. § 2128.

. . . .

Essentially, the evidence shows that at some point in time Westlaw and Dialog incorporated the Copyright Office’s automated catalog information about the Lister manuscript into their own databases. There is no indication as to when that occurred or whether it was prior to the critical date. We see little difference between the evidence in this case and a situation in which an examiner comes across an undated reference that discloses an invention for which an applicant is seeking the patent. We surely would not view the mere existence of the reference in the latter scenario as prima facie evidence that it was available prior to the applicant’s critical date.

. . . absent any evidence pertaining to the general practices of the Copyright Office, Westlaw, and Dialog, or the typical time that elapses between copyright registration, inclusion in the Copyright Office’s automated catalog, and subsequent incorporation into one of the commercial databases, any presumption along those lines would be pure speculation.

On remand, the PTO can legitimately reject the application again if it can prove that the LOC records were available through Westlaw or Dialog more than one year prior to the 1996 patent application date.

President Obama’s Strategy for American Innovation

President Obama’s speech today focused on its newly formed “strategy for American innovation” — his “strategy to foster new jobs, new businesses, and new industries by laying the groundwork and the ground rules to best tap our innovative potential. . . . [R]ooted in a simple idea: that if government does its modest part, there’s no stopping the most powerful and generative economic force that the world has ever known, and that is the American people. . . . [Beginning with] the building blocks of innovation: education, infrastructure, research.”

The Administration’s policy paper focuses briefly on two aspects of intellectual property and patent law divided between a need for strong international enforcement and a call for reform of the US system.

Enforce our trade agreements to ensure access for American products abroad. Over the last eight years the enforcement of trade agreements slowed dramatically, with the United States bringing only an average of three WTO cases per year – as opposed to the approximately 11 annually from 1995 to 2001. In this era, the United States lost its focus on ensuring that other countries lived up to their promises to open their markets, not violate America’s intellectual property, and not use dumping or subsidies to penetrate America’s markets. Under President Obama, USTR and the Department of Commerce are committed to a new emphasis on enforcing our existing agreements.

Protect intellectual property rights. Intellectual property is to the digital age what physical goods were to the industrial age. We must ensure that intellectual property is protected in foreign markets and promote greater cooperation on international standards that allow our technologies to compete everywhere. The Administration is committed to ensuring that the United States Patent and Trademark Office has the resources, authority, and flexibility to administer the patent system effectively and issue high-quality patents on innovative intellectual property, while rejecting claims that do not merit patent protection.

The administration’s talking points on the USPTO link-in with Professor Rai’s calls for greater patent office power and autonomy – “ensuring that the [USPTO] has the resources, authority, and flexibility to administer the patent system efficiently.”

Patently-O Bits and Bytes No. 130

New Job Postings:

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Patently-O Bits and Bytes No. 130

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Patently-O Bits and Bytes No. 130

New Job Postings:

Upcoming Events:

Troll Tracker Defamation Lawsuit: Trial Underway

Eric Albritton’s defamation lawsuit against Rick Frenkel and his former employer Cisco Systems is underway in the Eastern District of Texas. In my opinion, the case is ridiculous. However, it should serve as a reminder that those vehemently against certain types of speech can often shut-down that speech. Frenkel has indicated that he will not revive his troll tracker blog.

The whole controversy began when Albritton’s litigation team (on behalf of ESN) filed a patent infringement action against Cisco in the Eastern District of Texas. The electronic timestamp of the filing was October 15, 2007 even though the patent did not issue until October 16. Of course, a patentee has no standing to file a lawsuit until the patent issues. I reported on that discrepancy in an October 16 Patently-O post. [Link].

A few days later, Frenkel reported that the filing date had been changed by the clerk without notice or motion. In his report, Frenkel suggested that

“ESN’s local counsel called the EDTX court clerk and convinced him/her to change the docket to reflect an October 16 filing date, rather than the October 15 filing date. I checked, and sure enough, that’s exactly what happened – the docket was altered to reflect an October 16 filing date and the complaint was altered to change the filing date stamp from October 15 to October 16. Only the EDTX Court Clerk could have made such changes. . . . This is yet another example of the abusive nature of litigating patent cases in the Banana Republic of East Texas.”

In a later posting, Frenkel identified Albritton as ESN’s local counsel.

Albritton apparently does not dispute the fact that the original docket sheet indicated October 15 or that his office convinced the clerk to change the date stamp. However, he explains that the change was proper because the electronic filing had been started prior to midnight, but was not finally submitted until after midnight.

Albritton subsequently filed a defamation suit against Frenkel, several of his colleagues at Cisco, and against Cisco itself. The basis of the defamation suit is the underlying implication that Albritton acted illegally in getting the docket sheet changed.

Complicating the case are the issues that: (1) Frenkel was at the time posting anonymously as the “Patent Troll Tracker;” (2) the docket sheet change involved a case against Frenkel’s employer Cisco; (3) Frenkel also mentioned another attorney, Johnny Ward, son of E.D.Tex. Judge Ward; and (4) The lack of respect for the E.D.Tex. apparent in the Troll Tracker posts.

Joe Mullin has been reporting on the details of the trial. [Link]

An Appeal to the New Patent Office Director: Repeal the Single Sentence Rule

Guest Post by Stephen Schott of Volpe & Koenig 

[File Attachment: PDF Version of this Article (135 KB)]

Like all elementary school graduates, I learned that a single sentence should be short. One source suggests that a well-written work should average 20 to 25 word sentences.[1] With that as the guide, sentences averaging 50 words would raise the ire of a 3rd grade teacher. Those averaging 100 words would drive a sane person mad. And a 250 plus word sentence would drive even Proust to distraction.


But sentences of such prodigious lengths are commonplace in patent law. The offending sentences are patent claims.[2] These claims are a U.S. patent’s most important feature. It is here that the inventor, or more likely the inventor’s attorney, sets forth the “metes and bounds” that define the invention. The claims serve as property lines: Cross into those lines with your product and you infringe the patent.


With such importance placed on claims, you would expect them to be quite readable. You would at least expect them to have been the subject of the “plain English” movement, perhaps best summed up by Albert Einstein when discussing science: “Most of the fundamental ideas of science are essentially simple, and may, as a rule, be expressed in language comprehensible to everyone.” But the claims—despite the substantial time spent drafting and interpreting them—are not a place where the discerning reader finds linguistic respite.


An Initial Comment on Prometheus: The Irrelevance of Intangibility

By Kevin Emerson Collins, Associate Professor of Law, Indiana University Maurer School of Law—Bloomington [BIO][Articles][PDF Version of this Post]

Background: The Machine-or-Transformation Test of Bilski

Last fall, the Federal Circuit articulated the “machine-or-transformation” test for patent eligibility in its landmark case In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc). It held that a method is eligible for patent protection only if it is either (a) limited to a “particular machine” or (b) responsible for transforming a “particular article” into a different state or thing. Id. at 954. Additionally, in a classic example of language that adds judicial wiggle room, the machine or transformation that satisfies either of these prongs “must impose meaningful limits on the claim’s scope,” it “must be central to the purpose of the claimed process,” and it must not be part of “insignificant extra-solution activity” or a “mere data-gathering step.” Id. at 961–62 (emphases added).   

The Supreme Court has accepted certiorari in Bilski, but the impending Supreme Court opinion has not stopped the Federal Circuit from issuing what is perhaps its most important case to date applying the machine-or-transformation test: Prometheus Laboratories, Inc. v. Mayo Collaborative Services. There have been two distinct types of claims that have taken center stage in recent debates over the section 101 doctrine of patent eligibility: “business methods” and what I will call “determine-and-infer methods.” The claim at issue in Bilski describes a classic business method. In contrast, Prometheus involves a determine-and-infer method. The Federal Circuit’s opinion in Prometheus opens a new window into the import of the machine-or-transformation test. Regardless of one’s views of the soundness of Federal Circuit’s reasoning in Prometheus, herein lies one of the opinion’s greatest virtues. By issuing Prometheus before the Court’s oral arguments in Bilski, the Federal Circuit has helped to clarify the stakes of the Court’s decision to sanction, reformulate, or reject the machine-or-transformation test.   


Kappos: Earn Accelerated Examination Rights by Abandoning Worthless Applications

One portion of my prior post on PTO Director Kappos' speech at the IPO annual meeting seems to have created some confusion. In particular, many questioned how Kappos planned to implement a system of "easing the acceleration of valuable cases while creating mechanisms for the worthless cases to be more quickly abandoned without wasting resources."

Aligning with the Obama-Sunstein strategy of soft paternalism, Kappos does not suggest that the PTO should set any hard-line rules for determining value and worthlessness. Rather, Director Kappos is intent on introducing a system that provides applicants with an incentive of abandoning applications prior to the first office action by offering accelerated examination for a still pending application. The following is a quote from the printed version of the Kappos speech:

We are working on new programs to help cut pendency across the board, such as one that would allow an applicant to select an application to advance in the queue in exchange for each application they withdraw before substantive examination.

We hope this will benefit applicants who are abandoning applications without response to first office actions, while saving the office from unnecessarily examining applications that are no longer important to applicants.

I suspect that this approach will work to help applicants abandon their own applications that they see as worthless. Here, applications may be seen as worthless either because they cover worthless technology or because they are unlikely to be patentable. A potential problem with the program is that it creates the opportunity to file straw-man applications that are subsequently abandoned in order to accelerate examination. To avoid this, the rule should also allow applicants to simply pay the equivalent of the application fee in order to accelerate examination. The program would also be much more successful if it offered a refund of the search & examination fees when applicants abandon early.

It is unclear whether the right to an accelerated examination would be transferrable.

Perhaps the positive takeaway from this small part of Director Kappos' speech is that he is willing to explore wholly new approaches if they have some potential for improving the system.


Patentable Subject Matter: Federal Circuit Upholds Patentability of Drug Dosage Method Claim

Prometheus Labs. v. Mayo Clinic (Fed. Cir. 2009)

In a unanimous panel opinion, the Federal Circuit has rejected Mayo’s patentable subject matter challenge under 35 U.S.C. 101 – holding that the claimed methods for calibrating a drug dosage were properly the subject of patent protection. The lower court had found the claims invalid under Section 101.

In its decision, the Federal Circuit applied its recent Bilski precedent.

The proper inquiry under § 101 is whether these methods meet the Supreme Court’s machine or transformation test articulated in Benson and Diehr, and applied in Bilski, and, if so, whether the machine or the transformation is central to the purpose of the claims.

Of course, Bilski is now on appeal at the Supreme Court.

The claimed method is essentially an iterative testing mechanism where the treatment drug is injected in the patient and the patient’s subsequent metabolic response is measured. The next dosage is then re-calibrated based upon the measured metabolic response.

Holding: Following Bilski, the Federal Circuit ruled that the required administration of a drug “transforms an article into a different state or thing” and that the transformation was an “integral” part of the calibration method. As such, the claims satisfy the patentable subject matter test of Bilski.

To be patentable, the claim must not wholly preempt the use of a natural process. Here, the court only weakly rebutted Mayo’s argument:

The claims cover a particular application of natural processes to treat various diseases, but transformative steps utilizing natural processes are not unpatentable subject matter. Moreover, the claims do not preemptnatural processes; they utilize them in a series of specific steps.

Method of Diagnosis: The court was clear to distinguish the Prometheus claims from diagnosis claims that merely requiring data gathering and correlation rather than an injection of drugs.

The asserted claims are in effect claims to methods of treatment, which are always transformative when a defined group of drugs is administered to the body to ameliorate the effects of an undesired condition. . . .

The crucial error the district court made in reaching the opposite conclusion was failing to recognize that the first two steps of the asserted claims are not merely data-gathering steps. . . . [T]he administering and determining steps are part of a treatment protocol, and they are transformative.

Thus, this decision at least suggests that the asserted diagnosis claim in LabCorp v. Metabolite would not be patentable. That claim involved only two steps: (1) assaying a body fluid for its homocysteine level; and (2) correlating high homocysteine with a vitamin deficiency.

Despite the stated distinctions, this case could be seen as a muted challenge to the Supreme Court and especially to Justice Breyer’s dissent from the Court’s late dismissal of its grant of certiorari. In its one sentence reflection on Breyer’s dissent, the Federal Circuit opinion merely indicates that opinion’s lack of precedential value and that the claims are “different.”

In reaching its conclusion, the district court relied heavily on the opinion of three justices dissenting from the dismissal of the grant of certiorari in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., 548 U.S. 124 (2006) (Breyer, J., dissenting). . . . That dissent is not controlling law and also involved different claims from the ones at issue here.

The court was clear the parties did not dispute other validity issues such as obviousness or novelty, but rather focused solely on the question of patentable subject matter.

Chances for Supreme Court Review: The setup of this case makes is a good candidate for Supreme Court review especially if the Court is not fully satisfied by its Bilski decision. The Supreme Court has regularly used case clustering in the past when considering patent issues: Nonobviousness (John Deere (1966), Adams (1966), & Anderson’s-Black Rock (1969)); Patentable subject matter (Flook (1978), Charkabarty (1980), Diehr (1980)); Prosecution history estoppel (Warner-Jenkinson (1995) & Festo (2000)).

Notes: Judge Lourie drafted the opinion which was joined by Chief Judge Michel. District Court Judge Clark (E.D.Tex.) joined the panel sitting by designation.

USPTO Director Kappos Discusses USPTO 2010

Director David Kappos today offered his first public speech directly to the intellectual property law community since taking office as Director. The 600+ patent attorneys in attendance at the Intellectual Property Owners Association (IPO) appeared cautiously hopeful.

Some highlights:

  1. Kappos intends to focus on process-focused reform in an attempt to drop pendency and increase examination effectiveness. In particular, Kappos suggested a reengineering of the USPTO examiner count system to better encourage compact prosecution; pre-first-office-action interviews as a mechanism to quickly focus on the important issues; easing the acceleration of valuable cases while creating mechanisms for the worthless cases to be more quickly abandoned without wasting resources. While waiting for broad reforms to take effect, Kappos also suggests mechanisms for shortening pendency for focused sectors of technology. As part of this, Kappos also suggested that plans at creating a “nationwide workforce” of patent examiners.
  2. Legislative patent reform is one of the “highest priorities” of both the USPTO and the Commerce Department. (Kappos did not develop the particular areas of reform).
  3. In the Q&A session, Kappos was asked about Tafas v. Dudas and its potential resolution. He joked that it might aptly be renamed Kappos v. Kappos based upon his history of opposing the rules package and his new role as PTO director. Despite his predilection against those particular reforms, Kappos may not have power to extricate the Government from its position.
  4. In the background, is the “big overhanging problem . . . funding.” Kappos reported an expected $200 million shortfall for FY2010. Leaving little money to make improvements or to even keep-up the “extremely fragile” information technology system.