October 2009

Supreme Court Clustering of Patent Cases

The last time that the Supreme Court directly addressed the issue of subject matter eligibility under 35 U.S.C. § 101 was in the early 1980′s. In the waning days of the pre-CAFC era, the Supreme Court decided Diamond v. Chakrabarty, 447 U.S. 303 (1980) and Diamond v. Diehr, 450 U.S. 175 (1981).

An interesting tidbit of history involves the grant of certiorari in the 1981 Diehr case. The Diehr grant of certiorari occurred on March 17, 1980 – the same day that the court heard oral arguments in Chakrabarty. By that time the court had apparently realized that the patent office needed more Section 101 guidance than the one biotechnology case could provide.

Today’s parallel of Bilski v. Kappos and Mayo v. Prometheus is strikingly similar. Of course, the Supreme Court is a different body than it was in 1980 and the Court hears about 50% fewer cases than it did back then. In patent cases where the Government is not a party – such as Mayo v. Prometheus – the court has more recently tended to ask for the views of the Solicitor General (CVSG) before moving forward with a grant of certiorari. The CVSG delay would push-back any decision on certiorari in Mayo v. Prometheus until the spring of 2010 – well after the scheduled November 9 oral arguments in Bilski. Although the Court may not have released a decision in Bilski by that time, the justices will almost certainly know the eventual outcome of that case.

If (1) the Supreme Court’s Bilski decision substantially shifts the patentable subject matter doctrine and (2) the Supreme Court sees Mayo v. Prometheus as important, the court may issue a “grant, vacate, and remand” or GVR order. In that scenario, the Federal Circuit would be asked to apply the new law of patentable subject matter to the facts in the case. In an e-mail, Hal Wegner suggested to me that this is a likely outcome.

  • Chakrabarty
    • Certiorari Granted October 29, 1979
    • Argued March 17, 1980
    • Decided June 16, 1980
  • Diehr
    • Certiorari Granted, March 17, 1980
    • Argued October 14, 1980
    • Decided March 3, 1981

As an aside, up-to-date versions of Mr. Wegner’s highly informative top-ten lists are being maintained online here.

Mayo v. Prometheus: Medical Methods and Patentable Subject Matter at the Supreme Court

Mayo v. Prometheus Labs., (on petition for writ of certiorari 2009)

The Mayo Clinic has filed a petition asking the Supreme Court to hear its case challenging the patentable subject matter of Prometheus Labs’ patents that cover a method of optimizing the dosing of a drug. U.S. Patents 6,355,623 and 6,680,302.

The invention basically offers an iterative approach to dosing that involves three steps: (1) administer a drug to a subject; (2) then determine the level of drug in the subject; and (3) decide whether the next dose should be the same, higher, or lower. The decision on the next dose is made by comparing the the level of the drug in the subject against predetermined thresholds. Claim 1 of the ’302 patent adds additional detail including identifying the active ingredient (6-thioguanine), the diagnosis (a GI disorder), and the predetermined thresholds (e.g., 230 pmol of drug per 8108 red blood cells). Claim 46 of the ’623 is a broad claim in that it does not not require the administration step (step 1 from above).

Broad Functional Language: You’ll note that the claims are written in broad functional language without tying the the claimed methods to any particular technology. Thus, the “administering” step could potentially be accomplished by any effective method (that has or will be invented) of getting the drug into the subject. Likewise, the patent offers potential methods of “determining the level” of drug in the body (e.g., liquid chromatography) but the claim is broadly written to seemingly cover any mechanism that fulfills that method.

Novelty Involves the Mental Step: Of course, the general iterative process is well known, what makes the Prometheus claims novel is that they identify the particular thresholds that are important (e.g., 230 pmol). In practice, the process of comparing the thresholds to the subject’s drug level is done in the mind of a physician. As Mayo explains, this merely involves the physician’s mental recognition of a natural correlation between metabolite levels and patient condition.

With these facts in mind, Mayo presents the following question: Whether 35 U.S.C. § 101 is satisfied by a patent claim that covers observed correlations between patient test results and patient health, so that the claim effectively preempts all uses of these naturally occurring correlations.

The Federal Circuit held the method patentable under its Bilski test by finding that the required administration of the drug transformed an article into a different state or thing — essentially creating a per se rule that a method requiring administration of a drug will be deemed patentable subject matter under Section 101. The court also held that the “determining the level” step was necessarily transformative since “those levels cannot be determined by mere inspection.”

Chances for Supreme Court Review: The fact that Bilski – another Section 101 case – is already pending before the Supreme Court does not mean that the court will reject this case. Rather, the court has often granted certiorari in tandem. 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)).

The case also represents a growing trend of pitting patient advocates (who want cheaper access to medicine) against innovators (who create better medicine).

Notes & Documents:

Claim 1 of the ’302 patent: A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:

   (a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and

   (b) determining a level of 6-thioguanine or 6-methyl-mercaptopurine in said subject having said immune-mediated gastrointestinal disorder,

   wherein a level of 6-thioguanine less than about 230 pmol per 8108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and

   wherein a level of 6-thioguanine greater than about 400 pmol per 8108 red blood cells or a level of 6-methyl-mercaptopurine greater than about 7000 pmol per 8108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

Bits and Bytes No. 136

  • The new website Found Persuasive looks to be an excellent addition to the online patent discussion. The authors promise a practical discussion of “patent prosecution strategies and templates for the patent practitioner. Patent attorneys Michael Leonard, Jared Olson, and Sheetal Patel are the authors.
  • The ReexamCenter is full of practical information about Reexamination Issues. The new site is run by Robert Sterne’s team at Sterne Kessler.
  • Professor Ho at Loyola (Chicago) sent in information about an upcoming event: IP Day in Chicago on November 3.
  • The PTO Central Reexamination Unit (CRU) has a new website design and updated statistics.
  • USPTO Ombudsman: The PTO has invited public comment on its Ombudsman Pilot Program. The program is intended to create a direct-line of communication for applicants who believe that their applications are being improperly examined. e9-25798.pdf.

Slowing Down RCEs and Lengthening the Patent Term

In a prior post, I discussed the USPTO’s planned docket-change for applications associated with a request for continued examination (RCE). See Nudging Against RCE Filings. According to the RCE Docket proposal, when an applicant files an RCE, the pending application will be taken off the examiner’s in-prosecution docket and placed in the “special-new” queue that is primarily filled with continuation applications. This new approach will result in RCE’s being handled much more slowly.

The graph below is a rough-cut attempt to compare the “special-new” queue with the RCE queue. The data comes from a set of eight thousand randomly selected patent applications filed 2001-2006 whose file histories have been made public on PAIR. The graph shows three groupings or application scenarios and the average delay from applicant filing to the receipt of a first office action for each. In my sample of continuation applications, the average PTO delay in mailing a first office action was a bit over six hundred days. On the other hand, after receiving an RCE, the average PTO delay in issuing an office action was less than three months.

The proposed change docket-change would essentially take the RCE group and combine it with the continuation group – likely adding over 18-months delay to RCE processing. As Scott Kamholz suggested, this will likely lead to a patent term adjustment (PTA) “bonanza.” This may become a favored approach for applicants looking to extend their patent term. Submarine anyone?

Because of the large sample size, the differences in delay between the groupings are all significant (P<.01). However, there are a number of potential confounding factors – perhaps most notably is a selection bias associated areas of technology. I did not correct for those potential problems in this rough-cut.

UPDATE: The following comment comes from a PTO Insider:

The difference here is the initial docketing to examiners. An RCE will cause the application to be automatically redocketed to an examiner’s Special New tab immediately once the LIE processes the RCE. Continuations, on the other hand, are not automatically docketed to examiners in this fashion, hence the pendency on the same order as normal non-continuation filings. Most of this time (after pre-exam) is spent on a SPE docket or no docket at all, awaiting eventual docketing to an examiner, just like normal non-continuation apps. While it’s likely that RCEs on the Special New docket will increase the time to next action for those cases, it won’t be anything even remotely comparable to 600+ days.

Does a Reference’s Priority Claim to a Provisional Application Alter its 102(e) Prior Art Date?

In re Giacomini (Fed. Cir. 2009) (discussion of the briefs)

Giacomini is appealing the BPAI’s 102(e) rejection — arguing that the patent asserted as prior art does not actually qualify as prior art. Giacomini’s application claims priority back to November 2000. The asserted prior art patent issued in 2006, but was filed in December 2000. The prior art patent also claims priority to a provisional application filed in September 2000. The PTO claims that the 102(e) date of the patent is the filing date of the provisional — thus making it prior art over Giacomini.

When a patent is asserted under 102(e)(2), the patent’s filing date is considered the priority date. In the language of the statute, the PTO must consider whether the putative prior art patent was “granted on an application for patent … filed in the United States before the invention by the applicant for patent.” The provision makes clear that a patent claiming priority to an international application will be given the international application filing date if that application “designated the United states and was published . .. in the English Language.” Under US case law, when being considered as prior art, divisional and continuation patents are also given the filing dates of their parents as their 102(e) date. See In re Klesper (CCPA 1968)(“provided the disclosure was contained in substance in the earliest application”). However, patents claiming priority to a foreign filing under Section 119 are not given the foreign priority date.

The novel question here on appeal is how to interpreted the statute’s silence regarding provisional applications.

Federal Circuit Proposed Changes to Rules of Practice

The Federal Circuit has proposed a set of about two-dozen amendments to its Rules of Practice. Under 28 U.S.C. § 2071(b), the court is required to provide “public notice and an opportunity for comment.” Any comments on the rules are due to the Federal Circuit clerk by November 5, 2009. Below, I discuss some of the proposed changes.

Rules 8(d) and 18(d) Stays Pending Appeal: Often a losing party will almost simultaneously ask both the district court and the appellate court to stay injunctive relief pending appeal. The proposed rule would require the movant to identify “when it filed the motion in the district court [or agency] and why it is not practicable to await a ruling by the district court on that motion.” The purpose of this rule is to help the appellate court avoid unnecessarily stepping on the toes of the district court judges.

Rule 21 Mandamus: Because the court often acts quickly in Mandamus actions, any reply brief “should be expedited if appropriate” or else the “court may act on the petition before the receipt of any reply.” The Federal Circuit has been receiving a marked increase in the number of mandamus requests in the wake of its TS Tech decision where the court ordered a case moved out of the Eastern District of Texas.

Rule 29 Amicus Brief: Rule 29 is amended to clarify that a third party filing an amicus brief does not need to file a motion for leave to file if “all parties consented to the filing.”

Caution for those using USPS: If your document “must be received by the court on a particular date, then the file might consider using an alternative method of delivering the document to the court, such as a commercial carrier or hand-delivery. The court cannot waive the deadlines for filing a notice of appeal or petition for review, even if the document was deposited in the mail in a timely fashion.”

Tracking the Use of Continuations

Mark Lemley and Bhaven Sampat have released a new working paper that uses PAIR data to draw some conclusions about the current patent system:

Conclusion: The evidence illuminates the patent prosecution process as a continuing negotiation between examiner and applicant. That negotiation does not end with an initial or even a final rejection. Interviews and amendments after final play an extremely significant role in generating patents, and in limiting the scope of those claims as well. Nor is that the end of the process. Continuation applications are flourishing. They have broken into two roughly equal groups, with different uses. Many applicants are using RCEs to keep fighting for claims that the examiner wasn’t willing to give them. The second group is filing continuation applications rather than RCEs. They have opted for a slower process, either because they want delay so that they can modify their application to track developments in the marketplace or because they want multiple patents to build an effective fence around a single invention.

In the paper, the authors implicitly retreat from earlier work criticizing the patent examination process –suggesting that their results here “may be a hopeful sign for patent examination: even though the PTO ultimately grants patents on a large majority of the applications it receives, it may still be serving an important gatekeeper function by requiring applicants to narrow their claims. (This assumes that most of those amendments narrow the claims; that seems likely, but we cannot test it empirically).”

Read the paper on SSRN.

The Role of the Washington DC District Court in Patent Cases

Stuart Soffer has provided information on an interesting spike in patent litigation filings in the Washington DC Federal District Court (DDC). As the chart below shows, more patent cases against the USPTO have already been filed in DDC in 2009 than in any other year in recent history.

What's Going On: On my review, of 39 of the DDC patent cases filed thus far in 2009 (including those not-against the PTO), all of the cases fell into one of these two categories:

Most of the DDC cases are suits against the PTO. The 2009 spike appears to be largely driven by patent holders asking for a review of PTO calculations of patent term adjustment. See Daido v. Doll, 09-628; Biogen IDEC v. Doll, 09-754; Novartis v. Doll, 09-804. The outcome of these cases will likely be dictated by the Federal Circuit's decision in Wyeth v. Kappos. That case focuses how to calculate an adjustment when the patentee is eligible under both Section 154(b)(1)(A) and Section 154(b)(1)(B). Oral arguments were held in early October, 2009.

The remaining cases involved declaratory judgment actions filed against non-US patent holders under 35 U.S.C. § 293. That section of the Patent Act provides that DDC has in rem jurisdiction over the patent and is a proper venue unless the foreign entity has identified a designated agent in another US jurisdiction. In the case of HTC v. Luzzatto, 08-998, the Taiwanese company HTC sued to invalidate Luzzatto's patent covering a "telephone identification calling apparatus." That case is interesting because the district court refused to dismiss the case against Luzzatto even though he had assigned his rights to the patent to another entity. The court reasoned that Section 293 explicitly creates jurisdiction over the "patentee", and Section 100(d) defines a patentee to include "not only the original patentee to whom the patent was issued but also the successors in title to the patentee."

Nudging Against RCE Filings

200910211319.jpgFollowing the Sunstein-Thayler nudge theory, the new PTO administration is taking small non-rule-based steps to discourage the filing of Requests for Continued Examination (RCEs). RCE’s are already fairly expensive – $810. That outlay is relatively low compared with the cost of preparing and filing an appeal – especially when it appears that an applicant’s arguments have not been fully considered or when the applicant perceives the opportunity for an amendment that would lead to allowance.   

Timing: In the past, one benefit of RCEs was that they were quickly examined as part of the theory of compact-prosecution – in essence, RCE filings were treated almost just like an office action response. Under a new procedure, the PTO will now be placing RCE applications in the same queue as divisional and continuation applications. Although that category is identified as “special new,” cases are typically taken-up more slowly than ones already on the docket and in-prosecution. According to a memo from Director Kappos, “The change to the docketing of requests for continued examination means that examiners are no longer required to act on a request for continued examination within two months of the entry of the request for continued examination on their docket. This change to the docketing of requests for continued examination is being made to allow examiners greater flexibility in managing their workload and allocating their time among requests for continued examination and new applications.” [Note - I'll see if I can pull-up data on the typical delay from filing a continuation until a First Action on the Merits (FAOM)]. [Kappos Memo - rce_docket.pdf]

Examiner Incentives: One of my students – Jaron Brunner – recently wrote an excellent paper applying negotiations theory to the patent prosecution process. Jaron is certainly correct that many aspects of patent prosecution can be thought of as a negotiation process. With that mindframe, it is easier to recognize that – although applicants are the parties that actually file the RCE’s – examiners do play a role in taking prosecution to the point of RCE filing. The new examiner count-system addresses this problem by reducing the credit (counts) that examiners receive for examining RCE filings and increasing the credit for initial office actions. As part of the nudge toward focusing on the important issues early-on in prosecution, the PTO is also providing more incentives to examiners to have discussions (interviews) with applicants rather than rely solely on formal paper filings that are often misunderstood and left unread.

Allowing Allowable Claims: Perhaps the biggest nudge is a change in philosophy – dropping the notion that “a lower allowance rate equals higher quality.” At least in their speeches, PTO management is encouraging examiners to work more directly with applicants to “find the patentable subject matter and get it clearly expressed in claims that can be allowed.”

In both FY2008 and FY2009, applicants filed over 100,000 requests for continued examination.

More Bits and Bytes No. 135

  • New Counts: The Patent Office Examiner Union (POPA) has voted to approve the PTO's proposed changes to the examiner count system. [POPA][Washington Post]
  • Novo Nordisk v. Caraco: The Federal Circuit has temporarily stayed an Eastern District of Michigan court ordered injunction that would force the patentee to amend its Orange Book listing for its diabetes treatment drug Prandin. The court is now considering whether to leave the stay in place for the remainder of the appeal. [CAFC Order][FDA Law Blog]
  • Baker Hughes v. Nalco: Nalco moved for a stay of a preliminary injunction pending appeal. Going even further, the Federal Circuit vacated the preliminary injunction. In its non-precedential order, the appellate court held that preliminary injunction could not be sustained because the lower court had failed to explain its irreparable harm finding. The improvement patent relates to a method for purifying crude oil. [CAFC Order]
  • Tafas Steps Back: Following the PTO's withdrawal of its rule package, Tafas has filed a motion with the Federal Circuit to dismiss the pending appeal in Tafas v. Kappos but not vacate the District Court's injunction. It appears likely that Tafas will seek fees and costs as the prevailing plaintiff. Donald Zuhn at Patent Docs includes more details.

Bits and Bytes No. 134: Personnel – Past and Present

  • Duke Law Professor Arti Rai has started work at the USPTO as the "Administrator for External Affairs." Although not a registered patent attorney, Rai had a focus on biochemistry at Harvard and attended one year of Harvard Medical School before heading to law school (again at Harvard). [cv] In addition to her extensive knowledge of the patent system, Rai is an expert on administrative law. In her writings, she typically argues that the PTO should be given more independence and power.
  • Professor Rai's new position will likely focus on PTO relations with other US governmental entities as well as with foreign governmental entities.
  • Professor Rai offered remarks at the Collegiate Inventors Competition in Chicago on Monday evening. Here are a few quotes:
  • "As I know from my research, and from my own sister’s experience with her biotech startup, inventors need this protection in order to attract research and development capital. The challenge we face at the USPTO is ensuring that inventors can always look to us for strong and speedy protection."
  • "Since taking office a little over two months ago, Director Kappos has moved aggressively to reform the office, expedite the way in which we examine patents, update our IT infrastructure, and reach out to stakeholders and members of Congress to provide a sustainable funding mechanism for the USPTO. We are committed to using all of the tools at our disposal to reduce the amount of time it takes for inventors to get the patents they need to bring products to the marketplace. You will be hearing more in the months to come, so stay tuned and keep believing in your ability to change the world with your inventions."
  • IP Hall of Fame Nominations: Nominations have opened for IAM Magazine's Annual Award to "honour those who have made an outstanding contribution to the development of IP law and practice." http://www.iphalloffame.com/
  • Call for Papers: Next Generation of Antitrust Scholarship Conference

Misuse of a Patent Pool: En Banc Federal Circuit To Decide Whether CD-R/RW Patentees Improperly Sequestered Alternative Technologies

Princo Corp. v. International Trade Commission (ITC) (Fed. Cir. 2009)

The long-running Princo cases involve questions of when bundled licensing of patent rights may be seen as patent misuse (and thus rendering the patents unenforceable). The underlying pools of patents cover compact discs that are recordable (CD-R) and re-writeable (CD-RW).

In its most recent panel decision, the Federal Circuit (Judges BRYSON, GAJARSA, and DYK) rejected several theories of patent misuse, but remanded to consider whether the patentees has improperly sequestered alternative technologies. Judge Bryson did not agree with the novel misuse theory and dissented-in-part. Princo, US Philips, and the ITC each requested rehearing en banc.

The Federal Circuit has now granted the requests from US Philips and the ITC to hear the case en banc. (The court rejected Princo’s request for rehearing its questions en banc).

US Philips presented two questions:

  1. Whether a supposed agreement, between developers of new technology and a new product standard, to license one of the resulting patents only for use under that standard, thus foreclosing the possibility that it might be used to create a competing standard, could be held anticompetitive without (i) defining a relevant market in which the standards compete and (ii) proving that the agreement injured or was likely to injure competition in that market.
  2. Whether such an agreement, even if deemed anticompetitive, would be a proper basis for invoking the doctrine of patent misuse to refuse enforcement of different patents used to practice the joint standard.

The ITC did not explicitly list its en banc question, but basically argues that the remand is improper because (1) neither party raised the misuse theory that the court relied upon in its decision and (2) the ITC needs the Federal Circuit to define the “relevant market” before it can properly determine the market harm.

Briefs: US Philips en banc brief will be due at the end of November, and briefs from the ITC and Princo will be due thirty days from the date of service of US Philips. “Briefs of amici curiae will be entertained, and any such amicus briefs may be filed without leave of court but must otherwise comply with Federal Rule of Appellate Procedure 29 and Federal Circuit Rule 29.”

US Philips is represented by Douglas Melamed at WilmerHale; Princo is represented by Eric Wesenberg at Orrick; the ITC’s lead attorney is Clara Kuehn. Portions of the Melamed and Calebresi 1972 article on property rights is found in almost every property law casebook.

Ariad v. Lilly Amici Briefs

NYIPLA Amicus Brief.pdf: Supporting a strong written description requirement: "By the time of the O'Reilly v. Morse decision in 1853, 56 U.S. (15 How.) 62, it was understood that attempting to dominate an entire field by generic functional claiming was prohibited when the applicant had invented and disclosed only limited techniques or apparatus to carry out such function. Though phrased differently, this doctrine has continuing vitality and is today most closely embodied in the requirement that the specification enable the full scope of the claimed invention."

Professors Janis & Holbrook.pdf: Section 112 does not support a separate written description requirement – not even one limited to the context of new matter.

Morris.DOC: The text of Section 112 does not create a separate written description requirement. Professor Morris suggests giving teeth to Section 112p2 in requiring the applicant to "particularly point[] out and distinctly claim[] what he regarded as his invention."

Novozymes.pdf: WD should be limited to new matter issues.

Holman in Support of Neither Party.PDF: The genus and species possession requirements unjustifiably discriminate against biotech inventions by creating a technology-focused super-enablement requirement. [Read Prof. Holman's Biotech IP Blog where he is following the case.]

University of California (and other major patent-holding universities): The requirements prejudice university researchers who "often make the most important basic science discoveries. . . . As a result [of the written description requirement], university researchers are denied the recognition and reward of inventorship due solely to lack of a available resources rather than lack of inventive contribution."

Patent Reform: Reverse Payments

Most patent infringement lawsuits are resolved with an agreement for the accused infringer to pay money to the patent right-holder. Generic drug-maker challenges to pharmaceutical patents occasionally follow a different path – with the patent holder paying money to the accused infringer to stay off the market for an extended period of time. This summer, the Obama administration (through the DOJ) indicated that these "pay for delay" settlements are "presumptively unlawful." (WSJ Article). The FTC has opposed these reverse-payment settlements for many years – arguing that they tend to allow a company holding vulnerable patents to maintain monopoly-level drug prices.

Now, the Senate has joined the fray. The Senate Judiciary Committee has approved a ban on reverse-payment settlements. (Prior Art Blog citing Reuters).

S.369 was co-sponsored by Senators Kohl, Grassley, Feingold, Durbin, and Brown. The Bill would amend the Clayton Antitrust Act to make it "unlawful under this Act for any person, in connection with the sale of a drug product, to directly or indirectly be a party to any agreement resolving or settling a patent infringement claim in which– (1) an ANDA filer receives anything of value; and (2) the ANDA filer agrees not to research, develop, manufacture, market, or sell the ANDA product for any period of time." Such an agreement would then result in antitrust liability as well as the ANDA losing its 180-day exclusivity right. (Download S369)

The Increasing Role of Published Applications in Patent Examination

In 2001, the USPTO began publishing pending patent applications at approximately 18-months after the application's priority date. Over the past eight years, this publication rule has slowly become more integrated with the examination system. As the first chart shows below, most issued patents now cite to at least one US publication. (Patents issued January 1, 2009 – June 23, 2009 cite 4.2 US published applications, on average).

Moving toward Transparency in Prior Art: Patent applicants have historically been frustrated by prior art defined under Section 102(e) of the Patent Act. That section defines a class of "secret prior art" that was not publicly available at the time of an applicant's filing, but that was already on-file with the patent office. By opening-up the application files at an earlier date, the potential unfairness of secret 102(e) prior art is beginning to be reduced because the early publication makes the prior art searchable by the public. Although not directly proving this point, the second chart categorizes the cited US published applications according to their prior art classification. As time moves forward, more applications have become 102(b) prior art (published for more than one year before the applicant's filing) and the percentage of cited applications categorized as 102(e) prior art continues to drop.


  • This study is based on an analysis of all US patents issued between January 1, 2000 and June 23, 2009.
  • A cited published application was counted as 102(e) prior art if the publication date of the cited application was later than the filing date of the issued patent that cited the application.
  • A cited published application was counted as 102(b) prior art if the publication date of the cited application was more than one-year prior to the filing date of the issued patent that cited the application.  The graph shown limits the analysis to only issued patents that do not claim a priority date based on a prior patent filing.  Patents that claim an earlier priority date tend to eliminate a portion of 102(b) prior art.
  • See also Dennis Crouch, Published Applications as Prior Art, Patently-O, http://www.patentlyo.com/patent/2009/07/published-applications-as-prior-art.html (July 28, 2009).






USPTO Removes Rule Changes

ACTION: Final rule.

The United States Patent and Trademark Office (Office) published a final rule in the Federal Register in August of 2007 to revise the rules of practice for patent cases pertaining to continuing applications and requests for continued examination practices, and for the examination of claims in patent applications (Claims and Continuations Final Rule). The Office is revising the rules of practice in this final rule to remove the changes in the Claims and Continuations Final Rule from the Code of Federal Regulations.

The changes in the Claims and Continuations Final Rule were added to the Code of Federal Regulations, but have been the subject of litigation since August of 2007 and have never taken effect. … The changes in the Claims and Continuations Final Rule addressed the Office’s patent application pendency and quality issues, but did so with provisions that were objectionable to a large segment of the patent user community. In addition, the circumstances have changed since the Office published the Claims and Continuations Final Rule in August of 2007, and the Office is now considering other initiatives that would garner more of a consensus with the patent user community to address the challenges it currently faces. Thus, the Office has decided that it is no longer interested in pursuing the changes in the Claims and Continuations Final Rule that were the subject of the District Court’s decision in Tafas. Therefore, the Office is revising the rules of practice in title 37 of the Code of Federal Regulations for patent cases to remove the changes in the Claims and Continuations Final Rule from the Code of Federal Regulations.

See 74 FR 52686

Microsoft Questions Strong Presumption of Patent Validity over Newly Found Prior Art

Lucent v. Gateway, Dell, and Microsoft (Fed. Cir. 2009)

PatentLawPic798In its original opinion, the Federal Circuit vacated a $350+ million verdict against Microsoft based on improper damages calculations. On remand, the court must conduct a new damages assessment, but in that scenario Microsoft will certainly be on-the-hook for millions of dollars.

As an end-run, Microsoft has petitioned the Federal Circuit for a rehearing of the Lucent case en banc with a special focus on a particular issue that was ignored by the original opinion: the standard of proof for proving invalidity when the defendant presents prior art evidence that was not considered during patent prosecution. In particular, the software giant asks the court to “overrule its precedents requiring clear and convincing evidence of invalidity when the PTO did not consider the asserted prior art.”

Microsoft argues that the justification for a clear-and-convincing disappears when the patent challenge is based on newly uncovered prior art:

As the Supreme Court noted in KSR, however, “the rationale underlying the presumption [of validity]-that the PTO, in its expertise, has approved the claim-seems much diminished” where the claim of obviousness is based on prior art that was never before the PTO. 550 U.S. at 426. See also Penn Int ’1 Indus., Inc. v. New World Mjg. Inc., 69 1 F.2d 1297, 1300-01 (9th Cir. 1982) (“‘The basis for the presumption-that the Patent Office has compared the claim of the patent with the prior art and used its expertise to determine validity-can no longer exist when substantial evidence of prior art not considered by the Patent Office is placed in evidence at trial.”). As the Supreme Court cogently observed, the force of the statutory presumption-which stems from the conclusion that the PTO has done “its job properly,” see Superior Fireplace Co. v. Majestic Products Co., 270 F.3d 1358, 1367 & n.l (Fed. Cir. 2001)-dissipates when the PTO lacked essential evidence.

The case relies on the writings of several academics including the Lichtman & Lemley work on Gold Plated Patents.  In April 2009, I suggested that this type of frontal challenge on the strong presumption of validity would be coming soon.


Declaratory Judgment Standing: Must All Patent Owners be Joined?

PatentLawPic795In re KGK Synergize (Fed. Cir. 2009) (nonprecedential order)

KGK’s patent No. 6,987,125 covers the use of polymethoxyflavone to treat cardiovascular disease and is co-owned by the US Government. (Trade Name Sytrinol). It appears that two of the inventors were under an obligation to assign rights to the USDA while the other two assigned their rights to KGK. 

Classic declaratory judgment scenario: SourceOne is a former licensee who developed a competing product.  KGK allegedly began threatening customers and SourceOne filed for declaratory judgment of invalidity and non-infringement against KGK.  The problem is that the US government as co-owner is likely immune from a DJ action.

On motion, the district court refused to dismiss the case even though the US government had not been joined as a party to the litigation.  KGK then filed a petition for writ of mandamus with the Federal Circuit.  Writing for a three-member panel, Judge Gajarsa denied the petition – finding that KGK had not explored all of its alternatives or that it could not obtain adequate relief after waiting for final judgment.

The district court opinion on rehearing is interesting in the way that it differentiates between constitutional and prudential limitations on federal court jurisdiction.  Although prudential requirements do not allow a patentee to sue for infringement without joining co-owners, such an action is within Article III standing limitations.  On the flip side, the declaratory judgment act (28 U.S.C. 2201(a)) does not have the same prudential limitations.

Rather, as the Supreme Court indicated in the MedImmune case, the requirement for declaratory judgment is much broader and focuses on the existence of “a substantial controversy, between parties having adverse legal intersts, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”


  • David Donoghue discussed the original district court opinion here. He takes the following quote from that decision: “The approach urged by KGK (and the Government) would allow KGK to threaten legal action against SourceOne (or others) with impunity.  For those who gave into those threats, KGK would receive the benefit of the patent (a cessation of the alleged infringing conduct and perhaps compensation) without the need to do anything more.  For those who might rear up and seek a judicial resolution, KGK could retreat behind the Government’s cloak of immunity and prevent the infringement or validity of the ’125 Patent from ever being tested in court.”