How Many US Patents are In-Force?

Patent

By Dennis Crouch

A common mistake made by folks in business is to think of any patent issued in the past 20 years as being in-force. In fact, there are a number of ways that a patent can expire prior to that 20-year date. A patent that has expired no longer carries any rights of exclusivity for its holder.

By my calculations, there are about 2.1 million US patents in-force (as of May 1, 2012). To arrive at this number, I tallied the number of patents issued during the past twenty years (about 2.6 million) and then looked to see which of those patents had expired – either through completion of their term or through failure to pay a post-issuance renewal fee. The chart below provides an accounting of these results grouped by year of patent issuance. The older patents in my sample have all expired due to completion of the (then) 17-year term. More recently expired patents are typically associated with failure to pay a renewal fee. The most recent patents are essentially all still in-force because they have not yet had any post-issuance fees due.

050412_1519_HowManyUSPa1

The bulk of in-force patents (~91%) are issued on patent applications filed after the June 8, 1995 patent term transition (Post-GATT). Patent applications filed after June 8, 1995 are given a term of 20-years from the application (priority) filing date. Patents issued prior to the changeover (Pre-GATT) have a term of 17-years from the patent issuance date. Applications pending on the changeover date are given the longer of the 17-years-from-issue and 20-years-from-filing terms. For original applications (i.e., those without a prior term-triggering priority filing), the new 20-year term typically benefits patent applicants because USPTO delays are generously credited to the applicant and added to the patent term. For applications that claim priority to PCT filings or US non-provisional applications, the filing-date approach tends to reduce the patent term. A few thousand patents eligible to claim the 20-year term have expired – they all exhibit the same properties of being filed after the 1995 changeover but claiming priority to a pre-1993 application.

There are several important caveats to my study here. (1) I did not include terminal or other disclaimers in the analysis and (2) I did not include term adjustments for USPTO or Governmental delay; and (3) I did not consider whether patents had been held invalid by a court or the USPTO. For several reasons, I do not believe that these issues would significantly impact the above conclusions. Terminal disclaimers are most important with regard to pre-GATT applications. However, most of those patents have already expired. In more recent applications, a terminal disclaimer tying the patent term to a family-member application typically does not change the 20-year term because all the family-member applications typically claim priority to the same original application that triggers running of the term. Term adjustments created for USPTO delay only apply to applications associated with a 20-year-from-filing term. Those adjustments will be important going forward for recently issued patents. However, term adjustments only have a minimal impact for this study because so few patents have expired due to conclusion of the 20-year-term and because the PTO backlog was not as serious in the mid 1990's. Finally, Court and USPTO decisions invalidating patents are few and far-between in comparison to the absolute number of patents in consideration here.

Update –  Although it is fairly clear from the text, my reference to GATT is directed to the General Agreement on Tariffs and Trade (GATT) as modifed in 1994 by the Uruguay Round of negotiations and implemented in the US by the GATT Uruguay Round implementing legislation.

Electronic Filing at Federal Circuit

Patent

If you are filing a Federal Circuit appeal, beware that the court will soon require Electronic Case Filing. The initial filing (i.e., case initiating documents) will still be done on paper, but after May 17, 2012 any subsequent filings (such as responsive briefs and petitions) must be done electronically (with some exceptions).

Except as otherwise prescribed by Circuit rule or court order, all briefs, appendices, motions, petitions for rehearing, and other documents filed in cases assigned to the CM/ECF system, must be filed electronically using the CM/ECF system by a filer registered in accordance with ECF-2.

Comments on the new procedures are dues by May 8, 2012. [New Procedures]

Judicial Panel on Multidistrict Litigation: AIA Does Not Preclude Consolidated Cases

Patent,

Guest Post by Jennifer Furey of Cooley Manion Jones LLP and Anthony Miele of Miele Law Group PC. Furey and Miele represent Bear Creek in the JPML proceeding and in the associated actions discussed below.

Suppose a patentee determines that in order to enforce its patent rights, it must sue multiple, but unrelated, parties. An obstacle then presents itself. The patentee plaintiff may very well be forced to file separate actions in disparate jurisdictions, and now risks being overwhelmed by conflicting case schedules, duplicative discovery disputes, and especially, conflicting Markman claim construction rulings. See Scott W. Burt et al., Intellectual Property Owners Associations Committee White Paper, Impact of the Misjoinder Provision of the America Invents Act 16 (2012). One mechanism for efficiently litigating the pre-trial phase of patent infringement lawsuits pending in different districts is multidistrict litigation ("MDL") under 28 U.S.C. § 1407 ("Section 1407"). In a recent opinion in In re Bear Creek Technologies, Inc., the Judicial Panel on Multidistrict Litigation ("JPML") unequivocally held that MDL remains a viable option for parties to transfer separate patent infringement actions pending in different districts for centralized pre-trial proceedings, and that the recently enacted Leahy-Smith America Invents Act ("AIA") "does not affect [the JPML's] authority" to transfer and centralize patent litigation under Section 1407. MDL No. 2344, at 3 (J.P.M.L. May 2, 2012). After Bear Creek, plaintiffs enforcing their patent rights across multiple jurisdictions may still consider MDL as a possible option to keep infringing defendants before one court up until trial. [Download JMPL Decision Bear Creek]

Enacted on September 16, 2011, the AIA's joinder provision states that accused infringers may not, "based solely on allegations that they each have infringed" the same patent(s):

  1. be joined in one action as defendants or counterclaim defendants, or
  2. have their actions consolidated for trial.

35 U.S.C. § 299. In contrast, centralization in MDL under Section 1407 requires that:

  1. actions are pending in different districts;
  2. the actions involve "one or more common questions of fact;" and
  3. transfer and consolidation of pretrial proceedings is convenient for the parties and witnesses, and promotes "the just and efficient conduct of such actions."

28 U.S.C. § 1407.

After the enactment of the AIA, Vonage in Bear Creek argued that the AIA's joinder restriction applied to Section 1407, to no avail. The JPML found the AIA "does not alter [its] authority to order pretrial centralization." MDL No. 2344 at 2. The JPML reasoned that there was "no overlap" between the AIA and Section 1407, emphasizing the different standards of the two statutes, and contrasting the AIA's focus on joinder and consolidation at trial with "Section 1407's express focus on transfer for pretrial proceedings." Id. at 2-3. Finding that both the plain language and legislative history of the AIA were "silent as to the conduct of pretrial proceedings" and did not "mention Section 1407," the JPML noted that if Congress intended the AIA to limit the JPML's authority under Section 1407, it would have "done so explicitly." Id.

After holding that the AIA did not apply, the JPML then concluded that transfer and centralization was appropriate in Bear Creek because the separate actions shared "substantial background questions of fact" concerning the "validity and enforceability" of the patent-in-suit, as well as "claim construction." Id. at 4. The JPML emphasized that "centralization offers substantial savings in terms of judicial economy by having a single judge become acquainted with the complex patented technology and construing the patent in a consistent fashion (as opposed to having six judges separately decide such issues)."

In light of the AIA's enactment, MDL can be an invaluable tool for patentee-plaintiffs to efficiently litigate their patent rights against multiple infringers with actions pending in different courts through Markman and summary judgment. Under Bear Creek, the AIA is not a magic bullet allowing patent defendants to escape multi-party litigation—they may be brought before one court up until trial in MDL under Section 1407.

Renewal Rates by Tech Centers

Patent

Technology Center

Renewal Rate (First Fee Paid)

1600

Biotechnology and Organic Chemistry

81%

1700

Chemical and Materials Engineering

86%

2100

Computer Architecture Software and Information Security

90%

2600

Communications

90%

2800

Semiconductors, Electrical and Optical Systems and Components

89%

3600

Transportation, Electronic Commerce, Construction, and Agriculture

82%

3700

Mechanical Engineering, Manufacturing and Products

84%

 

The table above reports the percentage of patents for which the first maintenance (renewal) fee was paid. The chart includes patents issued 2005-2007 and the results are grouped according to technology center. It is somewhat interesting to me that TC1600 has the lowest renewal rate.

Guest Post: Popularity of Delaware Is On the Rise

Patent,

Guest Post by Professor Paul Janicke

Now that the new patent statute has put an end to qui tam actions and limited the joinder of defendants accused of infringement, we can once again take a meaningful count of patent suit filings, almost all of which are now infringement actions or DJs for noninfringement or invalidity. I ran a study of cases filed in the six-month window beginning October 1, 2011, shortly after the litigation parts of AIA became effective, through the end of March 2012.

There were 2,483 suits filed in that period, or at an annual rate of nearly 5,000 new cases. [Source: Lexis Courtlink.] The increase over earlier years, where the largest number of new patent case filings was just over 3,000, is undoubtedly due primarily to the AIA’s restraints on joining non-cooperating accused infringers in a single civil action. So there may not be more patent litigation going on, but only more files being opened with fewer defendants per action.

We should expect to see venue shifts over prior years, as accused infringers are able to move their cases to districts that are more convenient to them, generating considerably more work for the Judicial Panel On Multidistrict Litigation to sort out where the early proceedings should occur.

Perhaps for these reasons we now see Delaware approaching the top of the list for most new filings. Eastern Texas is still first with 407 filings in the six-month period, but Delaware is a close second with 388. Northern California is a distant third with 194. (The next three are Central California (169), Northern Illinois (142), and New Jersey (90). Delaware has always been a somewhat busy patent forum. However, its share of total national patent suit filings has moved up rather dramatically: in 1995 it had 3.69% of the national total of 1,626 cases; 4.53% in 2005; 6.11% in 2008; and now for the six-month window reported here its share has jumped to 15.63%. Several commentators have noticed in the past two or three years that results in Delaware are generally good for patentees. Litigants apparently agree.

Book Discussion: Frischmann Predicts Prometheus

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Guest post by Professor Michael Burstein.  This review is cross-posted on the Concurring-Opinions blog.

In his new book Infrastructure: The Social Value of Shared Resources (OUP 2012), Brett Frischmann explores how infrastructural resources contribute to social welfare. He defines a set of resources — infrastructure — in terms of the manner in which they create value and then examines the conditions under which such resources ought to be managed as a commons. He develops a framework for understanding the demand for infrastructure and the advantages and disadvantages of managing infrastructure in a nondiscriminatory manner. Prof. Frischmann then applies this framework to a variety of infrastructural resources — roads, telecommunications networks, the environment, and, of particular interest to readers of this blog, cultural resources including those which are protected by patent and copyright law.

I'm going to focus my comments on Frischmann's theory of intellectual infrastructure and how it relates to the structure of intellectual property law. Just a few days after the release of Infrastructure, the Supreme Court handed down its decision in Mayo Collaborative Services v. Prometheus Laboratories. That case presented the question whether certain diagnostic claims were within the scope of patentable subject matter under section 101 of the Patent Act. The Court held that they were not, in a manner that is strikingly consistent with Frischmann's theory. Hence the title of my post. But Frischmann's theory may also go a long way toward bringing some order to an area of patent law that has long been confused.

Let's start with the concept of intellectual infrastructure. Frischmann explains that intellectual or cultural resources can be infrastructural in the same manner as physical goods. So long as the resource is a "nonrival input into a wide variety of outputs" (275), it satisfies the characteristics of infrastructure that Frischmann so richly describes. In turn, that suggests that the case for managing the resource as a commons is strong. Frischmann then explains how this concept applies to ideas. Ideas, he writes, often are infrastructure (subject to a number of complications that I'll put to the side). So in his view, intellectual property should protect implementations of ideas but not the ideas themselves (286). To sort one from the other, Frischmann turns to the concept of abstraction in copyright law and argues that patent law should follow a similar path.

Now consider Prometheus. The inventors in that case discovered a correlation between the effectiveness of a drug and the amount of certain metabolites of that drug in a patient's blood. Their patent claimed a method of optimizing the dosage of the drug based on that correlation. The method was simple: (1) administer the drug; (2) determine the amount of metabolites in the patient's blood; (3) make an inference about drug dosage based on the correlation. Doctrinally, the question before the Court was whether this amounted to a claim on a "natural law" – the correlation between drug dosage and metabolism that happens in the human body – which would be unpatentable under a long-standing exception to the scope of patentable subject matter, or a patentable application of that law.

Substitute "idea" for "natural law" and the analogy to Frischmann's analysis becomes clear. Indeed, there is no reason why a "natural law" cannot be an "idea" as Frischmann describes it. A natural law is the articulation of a principle; whether that principle is an infrastructural idea turns on its characteristics, not its origins. In Prometheus, the Court, with Justice Breyer authoring the unanimous decision, held that the patent claimed the natural law itself and not an application of that law. The Court held that the the patent claims did not "add enough to their statements of the correlations . . . to qualify as patent-eligible processes that apply" those correlations (slip op. 8). The "administering" and "determining" steps, in the Court's view, comprised "well-understood, routine, conventional activity already engaged in by the scientific community" and so were "not sufficient to transform unpatentable natural correlations into patentable application of those regularities" (slip op. 11). Or, in Frischmann's terms, the patent claims did not amount to an implementation of an idea; they claimed the idea itself.

The rationale underlying the Court's decision also resonates with Frischmann's argument. Justice Breyer cast the decision in expressly functional terms. The danger, he wrote, is that because natural laws are "the basic tools of scientific and technological work," patents on natural laws "foreclose[] more future invention than the underlying discovery could reasonably justify" (slip op. 17). So too, the rationale for managing infrastructural resources as commons turns on the demand-side benefits: the spillovers and externalities that non-rival consumption of infrastructure resources enables. In this way, Prometheus is quite consistent with Frischmann's injunction against propertizing ideas.

Frischmann's theory also suggests some provocative solutions to problems that have long plagued the doctrine of patentable subject matter. Section 101 of the Patent Act defines as patentable any "new and useful process, machine, manufacture, or composition of matter." But the Supreme Court has long carved out from those categories several broad exceptions. They are usually described by the terms "laws of nature, natural phenomena, and abstract ideas," but at times appear also to encompass "products of nature," "mental processes," "mathematical formulae," "algorithms," and the like. Infrastructure may offer a unifying principle for choosing to exclude these things from the scope of patentable subject matter. Frischmann writes that "[t]he Supreme Court should stop referring to abstract ideas" in its patentable subject matter jurisprudence and should instead "make clear that ideas are not patentable" (300). Viewed through the lens of infrastructure, Prometheus is a step in this direction. The correlations at issue in that case were actually quite narrow. At the very least, they were not "abstract" in the sense that the "concept of hedging risk" found to be unpatentable in Bilski v. Kappos was abstract. Yet the correlations in Prometheus and the concept of hedging in Bilski are both ideas. And they are ideas that have the characteristics of infrastructure — nonrival inputs into a wide range of outputs. The Court's functional analysis suggests that the problem in both cases was that granting exclusive rights to ideas that have the characteristics of infrastructure might foreclose future innovation.

I would go even further. The next big patentable subject matter case is likely going to be the Public Patent Foundation's ongoing challenge to gene patents held by Myriad Genetics. Doctrinally, the question raised in that case — whether the patents claim "products of nature" – is different than the question whether a patent claims an idea. But to the extent that genes can be characterized as infrastructure — and I think there is a reasonable case that they can be — the functional analysis described above should apply. The exclusion of products of nature from the scope of patentable subject matter may therefore be consistent with the exclusion of ideas from the scope of patentable subject matter.

It has also been a matter of debate among academics and practitioners whether and to what extent the inquiry into patentable subject matter serves a function different from other requirements of patentability like novelty or nonobviousness. To the extent that infrastructural resources ought to lie beyond the scope of patent protection for functional reasons, the patentable subject matter screen will capture this insight in a way that other patentability doctrines will not. But this is a topic for further exploration.

Frischmann's book is an important contribution across a wide range of fields. It is a terrific achievement and I think its influence will continue to grow as we grapple with the implications of its analysis.

Concurring Opinions has been hosting a symposium to discuss Prof. Frischmann's book and includes posts by Marvin Ammori, Adam Thierer, Barbara A. Cherry, Frank Pasquale, Michael Burstein, Timothy B. Lee, Tim Wu, Laura DeNardis, Andrew Odlyzko, Deven Desai, and Brett Frischmann himself.

Gene Patent Debate Returns to the Federal Circuit

Patent, ,

by Dennis Crouch

Association for Molecular Pathology v. USPTO and Myriad Genetics (Fed. Cir. 2012)

The Supreme Court recently issued a GVR order in this case with instructions for the court to reconsider its decision in light of Mayo v. Prometheus.  The Federal Circuit has now released a new briefing schedule — asking the parties to file supplemental briefs by June 15, 2012 addressing the issue: What is the applicability of the Supreme Court’s decision in Mayo to Myriad’s isolated DNA claims and to method claim 20 of the ’282 patent? Non-parties may file briefs of  up to 15–pages in length that are due on the same date.  Oral arguments will be held July 20, 2012.

Claim 1 of Myriad’s patent is directed to “an isolated DNA coding for a BRCA1 polypeptide” with a particular amino acid sequence.  DNA coding for BRCA1 is a naturally occurring mutation and is clearly unpatentable. The catch here is that Myriad claims “isolated DNA” that the patent defines as “substantially separated from other cellular components which naturally accompany a native human sequence.”

Claim 20 of the patent is directed to the scientific method of finding a cancer treatment that involves (1) growing a host cell that has been genetically modified to include a BRCA1 gene and then (2) testing to see whether any compound particularly inhibits the growth of those cells.  A key question for this claim is whether its breadth effectively extends to cover an abstract idea — namely, using the scientific method to discover a treatment for BRCA1 cancer. 

Self-Replicating Technologies

Patent, , , , , ,

Guest Post by Jeremy Sheff. In view of the pending Monsanto case, I asked Professor Sheff to provide some of his thoughts on the patenting of self-replicating technologies –  DC.  This essay is cross-posted on PrawfsBlawg.

Self-replicating technologies, once the subject of theory and fantasy, are now upon us. The original self-replicating machine—the living organism—has already been harnessed by biotechnology engineers and, more to the point, their lawyers.  The next wave of self-replicating technologies, be they nanomedical robots or organic computers, are not far behind. Rather than triggering a “grey goo” apocalypse, these technologies are, at present, raising far more prosaic issues of intellectual property and antitrust law.

Those issues have now apparently caught the attention of the Supreme Court.  A few weeks ago, the Court called for the views of the solicitor general on the certiorari petition in the case of Bowman v. Monsanto.  This is the latest in a series of cases in which the Federal Circuit has addressed the application of the doctrine of patent exhaustion to the genetic engineering technology embodied in Monsanto's "Roundup-Ready" herbicide-resistant seeds.  Seeds are the prototypical self-replicating technology, and a number of similar herbicide-resistant crops are in the pipeline of the largest agribusiness concerns.  In each of the Roundup-Ready cases, a farmer has argued that Monsanto's patent rights do not extend to the second generation of soybeans grown from a patented first-generation seed.  In each case, the Federal Circuit found for Monsanto and against the farmers.

Patent exhaustion (or "first sale") doctrine serves as a limit on patent rights, and provides that once a patentee has made an authorized sale of an embodiment of its patented invention, its patent rights with respect to that embodiment are exhausted, and the purchaser is free to use or re-sell the embodiment as it sees fit.  Like analogous doctrines in copyright and trademark, it is motivated by competition concerns.  Its aim is to enable the creation of downstream or secondary markets in patented articles, and to prevent patentees from using their intellectual property rights to gain market power in markets other than the market for the patented technology.  When the Supreme Court last spoke on the issue, it rebuked the Federal Circuit for giving these pro-competitive policies insufficient weight.  It seems to be considering an encore in the Roundup-Ready cases.  For reasons I'll explain after the jump, I think that would be a mistake.

The Federal Circuit's analysis of patent exhaustion in the Roundup-Ready cases is admittedly not a model of the judicial craft.  Framing the issue as a formal question whether a second-generation soybean is a different "article" than the first generation seed from which it grew, the court's main justification for its result was the bare assertion that any alternative result would "eviscerate" Monsanto's patent.  But this is a question-begging explanation, and there are other, better reasons why a patentee's sale of a single embodiment of its self-replicating technology ought not to exhaust patent rights with respect to the second, third, or nth generation of the technology that is propagated from that first embodiment.  Moreover, these reasons are consistent not only with the reasons for granting patent rights in the first place, but with the pro-competitive principles that justify limiting those rights through exhaustion doctrine.

To get at these reasons, I propose a thought exercise.  Let's imagine that the Roundup-Ready cases came out the other way–that purchasers of Roundup-Ready seed from Monsanto were free, as a matter of patent law, to use all subsequent generations of soybeans grown from those first purchased seeds however they saw fit.  What would we expect the Monsantos of the world to do?  How do we believe their behavior might be influenced by this new legal framework?

One possible answer to this question is: not at all.  It may be that the additional revenues to be derived from selling additional embodiments of a self-replicating technology to the same customer are trivial (perhaps due to the structure of demand), and that the prospect of any one customer re-selling a subsequent generation of the technology to another potential customer of the patentee is remote.  Nanomedicine, particularly personalized nanomedicine, may one day prove that this is a possible result.  But in the agriculture context, it strikes me as unlikely.  

Where the technology at issue is an input for the production of a commodity, and the demand for that technology is broad and essentially undifferentiated, I would expect that the possibility of re-sale of nth generation seeds by the patentee's customers would significantly eat into the patentee's revenue stream, potentially making it impossible for the patentee to recoup the investment in research and development required to develop the technology in the first place.  This is the classic free-rider problem that patent law is supposed to prevent: we preserve the incentive to engage in costly research and development by giving the inventor a limited-time monopoly.  Other scholars have noted that this free-rider rationale is particularly salient for inherently self-disclosing inventions (inventions that are easy to copy once they have been introduced to the public).  I would add that self-replication exacerbates the problem of self-disclosure: the patentee selling an embodiment of its invention would not only be teaching competitors how to practice the invention, it would in essence be building their factories as well.

So there are sound justifications grounded in the innovation policies underlying patent law for the Federal Circuit's rulings in the Roundup-Ready cases.  But of course, patent exhaustion doctrine is concerned not only with innovation policy, but also with competition policy.  This brings me back to my earlier question: how would we expect the Monsantos of the world to react to the free-rider problem if patent law did not protect them against competition from nth generation copies of their own first-generation products?  I can imagine two possible strategies a technologist might pursue to circumvent the free-rider problem: contract and secrecy.  And I think both of these alternatives are inferior to the patent solution crafted by the Federal Circuit on competition grounds.

Take the contract approach, which has been explicitly advocated by Yee Wah Chin, one of the attorneys representing the interests of Monsanto's farmer customers.  To avoid the problem of free-riders Monsanto might, for example, restrict sales of its seeds to customers who sign a license agreement in which the customers undertake to monitor the uses of nth generation embodiments.  So, a farmer might have to agree to sell his soybean crop only to buyers who have their own license agreement with Monsanto, or to Monsanto itself.  Or Monsanto could include field-of-use restrictions in its licenses, as Ms. Chin proposes: "Monsanto could have licensed seedmakers to sell seed embodying Monsanto technology on condition that the second-generation seed be either consumed or sold to buyers who agree to either consume the seed or isolate that seed from other seed and sell the seed only for consumption."  

This does not strike me as a pro-competitive result, for a few reasons.  First, it incentivizes Monsanto to extend its influence into downstream markets–such as the market for commodity soybeans and their derivative products–in ways that it would have little incentive for under the Federal Circuit's approach.  This downstream market creep is precisely the type of expansion of patent rights that exhaustion doctrine is supposed to prevent, out of fear that the patentee's interests are not likely to be consistent with the efficient functioning of those downstream markets.  Second, and perhaps more importantly, forcing Monsanto to look to contract rights to protect its investment in research and development shifts the costs of monitoring and enforcing the Roundup-Ready patents from Monsanto itself onto its customers, who are likely to face higher monitoring costs.  

We must remember, Monsanto's customers are largely farmers, who lack Monsanto's economies of scale, its greater expertise with its own technology, and its understanding of the functioning of the markets for that technology.  Moreover, shifting enforcement responsibility from the patentee to its customers is likely to create agency costs where they would not otherwise exist.  A farmer who is paying Monsanto a premium for Roundup-Ready seeds probably has far weaker incentives to vigorously monitor for violation of Monsanto's license terms than does Monsanto itself, which is reaping the premium.  Finally, in the event that a customer breaches these monitoring obligations, either maliciously or negligently, Monsanto's technology could fall into the hands of a competitor who is not in privity of contract with Monsanto and thus (absent any unfair competition type of claim) would be free to use the nth generation seed (in which Monsanto's patent rights are exhausted) to compete with Monsanto.  An individual farmer is likely to be judgment-proof in the face of the claims Monsanto might make should such a competitive threat emerge outside the reach of its licensing provisions, which once again leads us to the original problem: how would we expect Monsanto to respond to this risk of free-riding?

This brings me to the last alternative to the Federal Circuit's solution in the Roundup-Ready cases: secrecy.  Monsanto might seek to prevent free-riding by refusing to release its technology to public view, and relying on trade secret protection to protect against free-riding.  But in order to preserve its secret (a prerequisite of trade secret protection),  Monsanto would have to ensure that nothing it released into the market disclosed its genetic technology.  As I noted above, self-replication can be seen as a heightened form of self-disclosure, and so this type of secrecy would be fairly hard to maintain.  Indeed, I think the only plausible way of doing so would be to pursue a course of comprehensive vertical integration.  Monsanto would not only have to be in the business of propagating seeds, but also in the business of cultivating and harvesting soybeans, and processing them into useful products (oil, animal feed, industrial adhesives, tofu, you name it) that do not reveal the genetic material at the core of Monsanto's invention.  Even if this were technically possible (a big if), the effect on all sorts of markets, both for inputs and outputs of the soybean market, is likely to be catastrophically anti-competitive.  Where the alternative is such drastic shocks to competition in the market for, e.g.,  miso paste, soy-fed livestock, and arable land, the Federal Circuit's decisions in the Roundup-Ready cases start to look surprisingly pro-competitive.

The big question in my mind, then, is not whether the Federal Circuit's reached the right result in the Roundup-Ready cases.  Given the factual setting of those cases, I think the answer to that question is a relatively uncontroversial yes.  The real question, to me, is whether the same holds true for self-replicating technologies other than seeds for agricultural commodities.  I already noted above one type of self-replicating technology–personalized nanomedicine–that may not present the same incentives for patentees, their customers, and their competitors, as do herbicide-resistant soybeans.  Given how little we can presume to know about the future development of other self-replicating technologies, it is likely unwise to try to set a rule today to govern the rights of downstream users for all such technologies that may arise tomorrow.  And for this reason alone, it may be worth getting some discussion of the issue from the Supreme Court, which seems particularly sensitive (almost to a fault) to the hazards of establishing brittle legal rules to govern the unknown future of technology.  If the analysis that emerges is more substantive and functionally-minded than the under-argued, formalist analysis of the Federal Circuit (admittedly, another big if), I would be happy to see the Court take the case, if only to put the type of issues I've discussed in this post on the table.

What Happened to All the Cases: Why So Many Section 337 Cases Give Rise to Relatively Few Exclusion Orders

Patent

Guest Post by Michael G. McManus and Rodney R. Sweetland, III. Both authors are partners at the Duane Morris law firm. 

There is something of a paradox regarding the fate of Section 337 cases at the ITC. On the one hand, it is often noted that Section 337 cases are less likely to settle prior to trial than district court patent cases.  One commentator reports that between 2000 and 2008 46% of investigations were settled prior to hearing.[1] While this is a significant number of settlements, it indicates that most Section 337 cases have historically gone to hearing.  On the other hand, with more than three hundred investigations filed since 2005, and Section 337 complainants’ reported win rate of 58%, one would therefore expect to find well over one hundred exclusion orders in place.  In fact, as of this writing, there are only about 50 exclusion orders in effect arising from patent-based 337 investigations.  What happened to all the cases?

The present article will review the course of Section 337 complaints filed in 2008, 2009 and 2010 and describe their fate.

2008

In calendar year 2008, there were 36 Section 337 actions filed.[2]  Of these 36, 16 were decided by ALJ decision and 20 by settlement.[3]  Of the 16 resolved by decision, 3 were decided on summary determination, and 13 were decided by final initial determination (sometimes referred to as an “ID”). 

  • Of the 20 investigations resolved by settlement, 18 were settled prior to hearing and 2 subsequent to hearing. In addition, 2 of the investigations that led to IDs resulted in subsequent settlements for a total of 22 settlements.
  • Of the 36 actions filed in 2008, 21 were resolved prior to hearing (18 by settlement and 3 by SD) and 15 went to hearing (13 led to Final IDs and 2 were settled after hearing).
  • Of the 13 IDs issuing from 2008-filed complaints, 7 found a violation and 6 found no violation for a complainant win rate of 54% at the ID stage.
  • Nine of the 36 cases resulted in exclusion orders (including several arising from default judgments) with eight of the exclusion orders still in effect.

2009

In calendar year 2009, there were 34 Section 337 complaints filed.[4]  Of these 34, thirteen were determined by Administrative Law Judge (“ALJ”) decision and 21 by settlement.  Of the 13 resolved by decision, one was decided on summary determination and 12 by Final Initial Determination. 

  • Of the 21 cases resolved by settlement, 18 were resolved prior to hearing, and 3 were resolved after the hearing, but prior to the Final ID. In addition, 3 of the investigations that led to IDs resulted in settlements for a total of 24 settlements.
  • Of the actions filed in 2009, 19 were resolved prior to hearing (18 by settlement and 1 by SD) and 15 went to hearing (12 led to Final IDs and 3 were settled after hearing).
  • Of the 12 IDs arising from 2009-filed cases, six found a violation and six found no violation for a 50% win rate at the ID stage. Of the six that found a violation, 2 led to LEOs, 2 led to settlement and 2 were reversed by the Commission. Of those IDs that found no violation, five were reviewed and affirmed by the Commission and one settled. 
  • Five of the 34 cases resulted in exclusion orders. Two resulting from final IDs and 3 resulting from defaults. All 5 remain in effect.

2010

In calendar year 2010, there were 58 Section 337 complaints filed.[5]  Of these 58, 21 were decided by ALJ decision and 34 by settlement (the ID for three investigations had not yet issued as of this writing).  Of the 21 resolved by decision, 2 were decided on summary determination and 19 by final initial determination. 

  • Of the 34 investigations resolved by settlement, 33 settled prior to hearing and one settled subsequent to hearing but before the ID. 
  • Of the actions filed in 2010, 35 were resolved prior to hearing, 33 by settlement and 2 by summary determination. 23 went to hearing. Of these 23, 19 resulted in IDs, 1 settled subsequent to hearing, and 3 remain pending. 
  • Of the 19 IDs arising from 2010-filed cases, 8 found a violation and 11 found no violation for a complainant win rate of 42% at the ID stage. 
  • A significant number of 2010 cases are presently undergoing Commission review, however, 5 cases have resulted in exclusion orders thus far. 

Cumulative statistics

Cumulating the foregoing, and disregarding the 3 cases awaiting a Final ID, yields the following:

  • 69 of 125 (55%) investigations settled prior to hearing
  • 6 of 125 (5%) investigations settled after hearing but before ID
  • 44 of 125 (35%) investigations led to an ID
  • 6 of 125 (5%) investigations decided on SD

Further, 4 of the 44 cases with an ID subsequently settled.[6]  Thus, the cumulative settlement rate, considering cases at all stages before the Commission, is 63% (79 of 125).[7]

The ALJ’s issued 44 IDs in the case sample. Of these, 21 found a violation, and 23 found no violation. This yields a complainant success rate of 48% at the Initial Determination stage (there are too many cases that remain pending to derive complainant success rate through the Target Date). 

CONCLUSION

We are now in a position to answer the question, what happens to all the cases? First, the cumulative settlement rate for the time period at issue, 63%, is somewhat higher than expected.  Second, the complainant win rate for the relevant period, at least at the ALJ stage, is somewhat below the historical average. These two factors lead to fewer exclusion orders.

There is no quantitative explanation for the lower settlement rate of ITC cases relative to similar district court case.[8]  It may be that the structure of Section 337 proceedings does not lend itself to settlement.  In a district court jury case, the trial, and particularly the verdict, provide a decisive moment, with the joy of victory and the agony of defeat.  At the ITC, however, there is no comparable inflection point.  The hearing does not end with a decision; rather, the ID issues about 3 months subsequent to the hearing.  The ID yields a winner and a loser, however, in virtually every case the litigants promptly seek review by the full Commission.  The decision-making process is more drawn out and does not drive settlement “on the courthouse steps.”

Moreover, the simple speed of Section 337 proceedings may militate against settlement.  It often takes time for parties’ psychology to move from that of a combatant to a strictly rational economic agent. 

Similarly, there is no definitive explanation for the complainant win rate falling somewhat below the historical average.[9]  There is constant change in the ALJs, the Commission staff, the litigants, the law and the way the Commission is perceived among litigants. Some combination of these factors may affect win rate but the more likely explanation is that it is simply an artifact of the relatively small sample size. 

In view of the foregoing, practitioners can counsel their clients that, in recent years, 1) few cases are decided on summary determination, 2) a slim majority of cases settle prior to hearing and that 3) there is roughly a 50-50 chance of an ID yielding the desired result.

[1] Schaumberg, A Lawyer's Guide to Section 337 Investigations Before the U.S. International Trade Commission at 3.

[2] ITC Inv. Nos. 337-TA-632 through 337-TA-667

[3] For purposes of this article, the term “settlement” includes default judgments and withdrawn complaints.

[4] ITC Inv. Nos. 337-TA-668 through 701.

[5] ITC Inv. Nos. 337-TA-702 through 759.

[6] This article does not track settlements occurring after the Commission’s Final Determination; however, such settlements do occur making the total settlement rate slightly higher than reported here.

[7] This is still somewhat lower than most reported district court settlement rates for patent cases.  See Patstats.org, FY 2009 PATENT CASE DISPOSITIONS BY DISTRICT COURTS (reporting 88.6% settlement rate for 2009 cases); Jay P. Kesan & Gwendolyn G. Ball, How are Patent Cases Resolved? An Experimental Examination of the Adjudication and Settlement of Patent Disputes, 84 WASH. U. L. REV. 237, 259 (2006) (reporting approximately 80% settlement rate).

[8] See, generally, Colleen V. Chien, Patently Protectionist? An Empirical Analysis of Patent Cases at the International Trade Commission, Wm. & Mary L. Rev. 60 (2008) at 99-103.

[9] The present article counts defaults as settlements. Were these counted as judgments favorable to the complainant, the complainant win rate would be higher.

 

Federal Jurisdiction over Patent Malpractice Cases – Supreme Court Shows Interest in Gunn v. Minton

Patent, ,

By Dennis Crouch

Gunn v. Minton, (on petition for Writ of Certiorari at the U.S. Supreme Court)

Vernon Minton developed a set of software that he leased to the Texas Int'l Stock Exchange (TISE) more than one year before filing a provisional patent application on the invention embodied by the product. The USPTO granted Minton U.S. Patent No. 6,014,643. However, in a later lawsuit against NASDAQ, the patent was invalidated via the on-sale bar of 35 U.S.C. § 102(b) and that invalidity finding was upheld on appeal. Minton v. Nat'l Ass'n of Sec. Dealers, Inc., 336 F.3d 1373 (Fed. Cir. 2003). In that decision, the Federal Circuit confirmed that the lease constituted a sale for 102(b). In a post-judgment motion, Minton asked the district court to consider whether the use by TISE was an experimental use. However, the court refused to consider that issue because of its untimely introduction.

The present lawsuit arose when Minton then sued his patent litigation counsel (who have now joined the Fulbright & Jaworski firm). The crux of the malpractice claim is that the litigation counsel failed to timely plead the experimental use question. Minton sued in Texas state court and lost on a pretrial motion based upon the trial court's judgment that Minton had failed to present "a scintilla of proof . . . to support his claims." That no-damages judgment was affirmed by the Texas court of appeals. However, the Supreme Court of Texas took an orthogonal view and held that Texas courts lacked subject matter jurisdiction over case. In particular, the Texas Supreme Court held that Minton's malpractice claim required resolution of a substantial question of patent law and therefore fell within the exclusive "arising under" jurisdiction of the federal courts and, eventually, the Court of Appeals for the Federal Circuit. This ruling gives Minton another shot at winning the case – this time in federal district court.

The 5-3 Texas Supreme Court decision followed the lead set by the Federal Circuit in Air Measurement Tech., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P., 504 F.3d 1262 (Fed. Cir. 2007) and Immunocept, L.L.C. v. Fulbright & Jaworski, L.L.P., 504 F.3d 1281 (Fed. Cir. 2007). In those cases the Federal Circuit gave a broad interpretation to arising under jurisdiction based upon the court's congressionally mandated goal of national uniformity in the patent system. Both the Akin Gump and the Fulbright Jaworski cases were decided on the same day by the same panel and both penned by then Chief Judge Paul Michel. (Judges Lourie and Rader joined the panels). Although the Texas court did not treat the Federal Circuit decisions as binding precedent, the court chose to adopt the logic of those decisions. The dissent argued that the State of Texas has a strong interest in (and a regulatory scheme in place for) ensuring that Texas attorneys maintain a high level of quality and that federalism concerns suggest that many of these cases should be adjudged at the state court level. In a non-patent case, the Supreme Court approved of this more nuanced analysis of arising under jurisdiction in the case of Grable & Sons Metal Products, Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005).

The lawyer defendants have now appealed to the U.S. Supreme Court – asking that court to provide its verdict on the breadth of arising under jurisdiction for non-patent cases that require interpretation of a patent law issue. Gunn presents the following question:

Did the Federal Circuit depart from the standard this Court articulated in Grable & Sons Metal Products, Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005), for "arising under" jurisdiction of the federal courts under 28 U.S.C. § 1338, when it held that state law legal malpractice claims against trial lawyers for their handling of underlying patent matters come within the exclusive jurisdiction of the federal courts? Because the Federal Circuit has exclusive jurisdiction over appeals involving patents, are state courts and federal courts strictly following the Federal Circuit's mistaken standard, thereby magnifying its jurisdictional error and sweeping broad swaths of state law claims – which involve no actual patents and have no impact on actual patent rights – into the federal courts?

This may be surprising to some, but in most cases the respondent does not actually file any response to a Supreme Court petition for writ of certiorari. The Supreme Court tends to only hear important cases that are well represented on both sides. The lack of response is intended to suggest that the case should not rise to that threshold level of importance. Here, Minton declined to respond to the petition. However, in a recent order, the Supreme Court has asked for Minton's response. This judicial action suggests interest in the case, and that interest may be prompted that may be further spurred by the recent spate of decisions showing some disagreement within the Federal Circuit on the very issue. In a supplemental filing in support of its petition, Gunn argued that "[t]he Federal Circuit, which created the jurisdictional morass at issue in this case, is thus split within itself regarding whether to abandon the misguided and overly-broad jurisdictional standard it articulated in Air Measurement Tech., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P., 504 F.3d 1262 (Fed. Cir. 2007) and Immunocept, L.L.C. v. Fulbright & Jaworski, L.L.P., 504 F.3d 1281 (Fed. Cir. 2007)."

If the Supreme Court takes the case, argument will likely be scheduled for late 2012.

Status of Applications

Patent

The chart below shows the status of utility patent applictions filed over the past eight years. This morning, I pulled a random sample of 10,000 patent applications published 2005–2012 and checked the application status. For the chart below, grouped the applications according to the number of years since filing and plotted the percentage that are patented, abandoned, and still pending (WIP).  Thus, for applications that were filed 7-8 years ago, just over 60% have issued as patents; about 35% were abandoned; and the remaining 3% are still pending. 

PatentlyO142

Update 1: Here, I looked application-by-application and did not consider whether a particular application had any “family history.”  Thus, an original application followed by a divisional application would be considered two separate applications in my dataset. However, the filing of an RCE does not divide the application into two for my dataset.  One reader asked about re-files.  Of the abandoned cases in my sample, about 20% have one or more “children” applications that claim priority to the abandoned application. Patented cases are much more likely to be associated with follow-on applications than are abandoned cases.

Guest Post by Dr. Shine Tu: Luck/Unluck of the Draw: An Emprical Study of Examiner Allowance Rates

Patent, ,

Dr. Shine Tu is an Associate Professor of Law at the West Virginia University College of law.  For the past year, Dr. Tu, a former patent attorney with Foley & Lardner, has conducted a massive empirical examination of patent prosecution.  Massive, in the sense that Dr. Tu and his assistants examined the prosecution behavior of every patent issued in the last ten years.  In Luck/Unluck of the Draw: An Empricial Study of Examiner Allowance Rates, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1939508 and forthcoming in the Stanford Technology Law Review, Dr. Tu discusses some of the findings from his study. – Jason

Luck/Unluck of the Draw: An Emprical Study of Examiner Allowance Rates

Dr. Shine Tu

One of the greatest banes of a patent applicant is the examiner who will not allow an application that should be allowable.  During a trip to the PTO for an Examiner interview, I passed by the office of Examiner X with a sign that stated “0% allowance rate ☺ [ed.: smiley face].”  Evidently, the smiley face was inserted to add insult to injury.  I asked the examiner that I was with if Examiner X really had a 0% allowance rate, and she said “yes.”  (I later verified that this was correct)  I asked why this was the case, and she stated, “some examiners believe an allowance is an affront to their being.”  Of course, our patent system would be a complete failure if the ability to get a patent was solely determined by which examiner you were lucky/unlucky enough to draw.

In an attempt to determine the extent of this behavior, I set out to comprehensively study allowance rates of specific examiners by art unit, technology center and the PTO as a whole.  To be as comprehensive as possible, I coded over 1.5 million patents in an attempt to code every patent ever issued in the last 10 years (from January 2001-July 2011).

The results of this study were surprising.  I found two interesting populations of examiners.  First, I found a significant population of examiners who on average, issue a disproportionately small number of patents per year (low allowance rate examiners).  Second, I found a small but significant population of examiners, who on average, issue a disproportionately large number of patents per year (high allowance rate examiners).

The first population of low allowance rate examiners consist mainly of secondary examiners (junior examiner usually with less than 5 years of experience and no signatory authority).  These examiners, on average, issue a very small number of patents per year (less than 5 patents per year).   For example, between 2002-2011 in technology center 3700, approximately 17% (306 examiners) of the examiners issued less than 0.35% (823 patents) of the patents in this art unit.  Accordingly, these low allowance rate examiners issued approximately 2.7 patents per examiner.

In contrast, I found a second population of high allowance rate examiners that consist mainly of primary examiners (senior examiners usually with more than 5 years of experience and full signatory authority).  These examiners, on average, issue a high number of patents per year (more than 50 patents per year).  For example, between 2002-2011 in technology center 3700, approximately 12% (215 examiners) of the examiners issued approximately 51% (120,822 patents) of the patents in this art unit.  Accordingly, these high allowance rate examiners issued approximately 561.9 patents per examiner.

There are many good reasons why an application should not be allowed.  However, one reason that should not play a role is an uneven / inconsistent application of patentability rules.  Examiners should be consistent in the way they apply patentability rules within their own docket.  Additionally, examiners should be consistent in the way they apply patentability rules compared to examiners within their art unit.  This study suggests that examiners even within the same art unit may be applying the rules of patentability in an inconsistent manner. 

There are many limitations with this study.  First, I note that there is no ideal allowance rate.  Second, I note that this is only descriptive data.  Finally, I note that I focus only on issued patents.  I could not obtain data related to the total number of filed applications for each art unit, thus I cannot calculate the percentage allowance rate per art unit (because I do not have a denominator of “filed applications”).  This is a significant limitation because all of these results are limited by the “denominator” problem.

Additionally, it is possible both populations of examiners are doing an outstanding job.  That is, it is possible that the low volume examiners are simply getting harder cases (but I am skeptical of this explanation).   Additionally, it is possible that the low volume examiners are “doing a more thorough job” since they are mainly secondary examiners and thus have more time to spend per application for review and detailed analysis.  Furthermore, it is possible that high volume examiners are doing an adequate job because they are simply more experienced and not only know the field better, but know how to quickly make “good” rejections.  In order to obtain some substantive answers to overcome these limitations, I am currently reviewing a sample of prosecution histories to determine if these two populations of examiners truly are applying the patentability rules in an inconsistent manner. 

A full draft of “Luck/Unluck of the Draw: An Empirical Study of Examiner Allowance Rates” is available on SSRN at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1939508 and is forthcoming in the Stanford Technology Law Review.  Comments are appreciated.

Advanced Fiber Technologies v. J&L Fiber Services

Patent,

By Jason Rantanen

Advanced Fiber Technologies (AFT) Trust v. J&L Fiber Services, Inc. (Fed. Cir. 2012) Download 11-1243
Panel: Lourie (author), Dyk (dissenting in part), Prost

This opinion provides guidance on the process of construing claim constructions and illustrates the continuing disagreement among the Federal Circuit judges about claim interpretation.

The technology at issue in this case involves screening devices used in the pulp and paper industry. Advanced Fiber Technologies (AFT) patented a screening device that purports to offer substantially increased efficiency and flow capacity.  Two of the asserted independent claims include the term "screening medium"; the third contains the synonym "screening plate."  The district court construed "screening medium" as "a perforated barrier through which stock is passed to remove oversized, troublesome, and unwanted particles from good fiber."  Slip Op. at 8.  It further interpreted a term from its construction, "perforated," as meaning "pierced or punctured with holes."  Id.  Based on this meaning of "perforated," the district court granted summary judgment of noninfringement as against the accused device, which used a "wedgewire" screen (a screen made by assembling closely spaced parallel wires).  AFT appealed, challenging not the district court's construction of the term "perforated" but its construction of "screening medium."

Although not explicitly discussed by the opinion, construing claim constructions (which the majority refers to as "derivative construction" on page 14) raises some difficult issues above and beyond the challenges that come with construing the claim terms themselves – specifically, the degree of relationship between the claim term and the interpretation of the claim term's construction. 

The majority opinion in Advanced Fiber provides some guidance in this area.  First, the derivative construction "must follow the guiding principles set forth in Phillips." Slip Op. at 14.  Second, whether "construing a claim term or a disputed term within a claim construction, our ultimate goal is determining the meaning and scope of the patent claims asserted to be infringed.'" Id., quoting Markman, 52 F.3d at 976. 

Applying these two points, the majority agreed with AFT, concluding that the district court improperly relied on extrinsic evidence that contradicted the intrinsic evidence and that its own interpretation of "perforated" as simply "having holes or openings" was "fully consistent with the language of claim 1, "a screening medium having a plurality of openings therethrough," and claim 10.  Slip Op. at 17.

Comment: The majority's approach to derivative constructions looks to be fairly useful, in that it suggests that derivative constructions should relate back to the meaning of the claim itself rather than going down the rabbit hole of attempting to independantly interpret interpretations.  This approach thus adds to the methodology for construing constructions developed in Cordis Corporation v. Boston Scientific Corporation, 658 F.3d 1347 (Fed. Cir. 2011), another recent case dealing with an issue of derivative construction. 

Writing in dissent, Judge Dyk would have affirmed the district court's construction.  In Judge Dyk's view, the court should have read more into arguments the applicant made during prosecution and found that the applicant explicitly adopted the definition of "perforated plate" from a technical manual, the Handbook of Pulp & Paper Terminology, that the applicant cited during prosecution for the definition of "screen plate."

Note: Based on my reading of the opinion and the appellee's brief, neither the district court nor J&L appear to have relied on the Handbook's definition of "perforated plate." 

Federalism and Patent Law: Courts Split on Scope of Federal Circuit Arising Under Jurisdiction

Patent, ,

In a trio of decisions, the several members of the Federal Circuit have expressed their disagreement with the court’s expansion of appellate jurisdiction to cover attorney malpractice cases that involve patent law issues.

  • Landmark Screens, LLC v. Morgan Lewis & Bockius, LLP (Fed. Cir. 2012)(O’Malley, J., concurring);
  • Byrne v. Wood, Herron & Evans, LLP (Fed. Cir. 2012)(O’Malley, J., joined by Wallach, J., dissenting from denial of the petition for en banc rehearing); and
  • USPPS, Ltd. v. Avery Dennison Corp. (Fed. Cir. 2012)(O’Malley, J., joined by Mayer, J., concurring).

Attorney malpractice is a state law claim, but the Federal Circuit has (and thus the Federal Courts have) claimed exclusive jurisdiction over many patent prosecution related malpractice claims if the well-pled complaint requires the determination of a substantial issue of patent law.

In Minton v. Gunn, 355 S.W.3d 634 (Tex.2011), the Texas Supreme Court agreed with the Federal Circuit’s extension of jurisdiction, but made an interesting and important statement that Texas courts “are not bound by the holdings of the Federal Circuit.” This situation sets up the need for Supreme Court review. Minton was a 5-3 decision. The dissenting justices argued that state courts should maintain jurisdiction over the case based on its application of the 2005 US Supreme Court case of Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005). In that case, the US Supreme Court held that federalism principles require a cautious and balanced approach to the removal of traditional state court claims to federal court.

The dissent in Minton wrote:

The Federal Circuit’s focus on this mandate [of uniformity] is understandable, but uniformity in patent law is not the be-all and end-all of jurisprudence. It must give way to the contours of federal question jurisdiction provided by the Supreme Court. See Grable. In turn, this Court has its own mandate, of at least equal importance to that of the Federal Circuit. We owe a duty to the people of this state to exercise the judicial power, see Tex. Const. art. V, §§ 1, 3, and that duty includes vital matters such as ensuring consistency and certainty in the civil law of the state, see Tex. Gov’t Code § 22.001, and regulating the practice of law, id. § 81.011(c). Accordingly, we should not risk the confusion and inconsistency that will result from having two sets of binding precedent in Texas legal malpractice law—one stemming from this Court and the other courts of this state, and another, entirely outside of our control after today’s opinion, developing under the direction of the Federal Circuit, largely uninformed by the deep roots of Texas jurisprudence and the requirements of the Texas Constitution.

This Court should not be quick to follow Federal Circuit case law that fails to follow the test set forth by the Supreme Court. Because this case fails to meet three of the four elements required by the Supreme Court for federal-element “arising under” jurisdiction, the court of appeals was correct when it held that exclusive federal patent jurisdiction does not lie here. I therefore respectfully dissent.

In a parallel 2011 case, an Illinois state appellate court held that Magnetek’s claim against Kirkland & Ellis for deficient representation in a patent litigation lawsuit did not arise under patent law. In that case, the court wrote that the largest patent law issue – whether the patent was enforceable or not – had already been decided by a separate court and therefore was not at issue in the case. Magnetek, Inc. v. Kirkland and Ellis, LLP, 954 N.E.2d 803 (Ill.App. 2011).

A petition to the Supreme Court is likely in at least one of these cases.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, , , , , ,

IP's contribution to the US economy

  • A recent USPTO whitepaper reports that IP industries contribute $5 trillion and 40 million jobs to the US economy. Some of the report major findings are:
    • The entire US economy relies on some form of IP, because virtually every industry either produces or uses it.
    • IP-intensive industries directly accounted for 27.1 million American jobs, or 18.8% of all employment in the economy, in 2010.
    • Jobs in IP-intensive industries pay well compared to other jobs. Average weekly wages for IP-intensive industries were 42% higher than the average weekly wages in non IP-intensive industries.
    • Growth in copyright-intensive industries (2.4%), patent-intensive industries (2.3%), and trademark-intensive industries (1.1%) all outpaced gains in non-IP intensive industries.

    Report

Rights of the dead

  • At Coachella 2012 Tupac Shakur appeared on stage and as if he was actually alive and performing. What rights does the family of Tupac or other deceased entertainers have when it comes to situations like this?
  • California Civil code Section 3344.1 (a)(1) reads in part:
    • Any person who uses a deceased personality's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent from the person or persons specified… shall be liable for any damages…

    Section (a) (2) reads:

    • For purposes of this subdivision, a play, book, magazine, newspaper, musical composition, audiovisual work, radio or television program, single and original work of art… shall not be considered a product, article of merchandise, good, or service if it is fictional or nonfictional entertainment, or a dramatic, literary, or musical work.

    Having a dead celebrity performing electronically on stage seems like it falls into the audiovisual work exception under section (a) (2). I have yet to see anyone attempt to file a business-method patent on the dead touring, but I assume that someone may attempt to monopolize the business. [Link]

Patent Jobs:

  • Edell, Shapiro & Finnan is seeking an experienced EE patent attorney with an advanced degree in EE or physics. The firm is also seeking an associate/agent/tech writer with an EE or computer science degree to work at their Rockville, MD office. [Link]
  • Amgen is searching for Sr. Counsel with 4 years of patent or IP practice to work at their California location. [Link]
  • North Star IP is looking for a patent associate with 3 to 4+ years of prosecution experience and a background in EE, computer engineering, or computer science to work at their DC office. [Link]
  • Sterne, Kessler, Goldstein & Fox is seeking experienced electrical IP attorneys with a degree in EE or computer engineering to work at their DC office. [Link]
  • Cantor Colburn is searching for an associate ME/EE patent attorney with 3-5 years of experience. [Link]
  • Cantor Colburn is looking for IP litigation associates with 2-4 years of litigation experience. [Link]
  • The Kohler Company is seeking an IP attorney with 2+ years of experience to work at their Kohler, Wisconsin location. [Link]
  • Rutan & Tucker is searching for a patent associate/agent with 3-4 years of experience to work at their California office. [Link]
  • Rathe Lindenbaum is looking for a patent attorney/agent with experience in mechanical, electromechanical or chemical engineering and 3+ years of experience to work at their Milwaukee office. [Link]
  • NONY is looking for a US patent attorney/agent or UK patent attorney to work at their Paris, France office. [Link]

Upcoming Events:

  • The University of Colorado School of Law will hold a conference on April 24th. The conference, Patents on the Range or Wild Frontier, will discuss the future of patent policy. Guest speakers include: David Kappos, Don Rosenberg, John Thorne, Paul Ohm, Bernard Chao, and many others. [Link]
  • ACI will hold its 6th Annual Paragraph IV Disputes conference on April 24-25 in New York City. The conference will cover topics such as: the impact of the AIA on Hatch-Waxman litigation, claim construction, prior art obviousness and obvious-type double patenting, and many other topics. (Patently-O readers register with PO 200 for a discount). [Link]
  • The DC Bar IP Law Section 2012 Annual Spring Reception will be held April 25th. The D.C. Bar Intellectual Property Law Section awards the 2012 "Champion of Intellectual Property" Award to the late Paul J. Luckern, Chief Judge of the International Trade Commission. Guest include Chief Judge Randall R. Rader of the U.S. Court of Appeals for the Federal Circuit, Judge Theodore R. Essex of the ITC, and Lynn I. Levine, Director of the ITC's Office of Unfair Import Investigations. [Link]
  • Fitch, Even, Tabin & Flannery, LLP will present a free one-hour CLE webinar, "Trademark Protection Strategies in Social Media," on April 25, 2012 at 12 noon EST. The proliferation of social media outlets frequented by millions of users have created untold opportunities for trademark exposure and potential infringement. Joseph T. Nabor will discuss strategies to protect trademarks in the social media arena, including monitoring and enforcement against infringement, creating social media policies, related ethics issues, and using social media in litigation support. [Link]
  • LES 2012 Spring Meeting – "Licensing to Solve the Innovation Gap" will be held May 15-17, Boston, MA. Speakers from GE Healthcare, Harvard, Hoffmann-LaRoche, Intel, Johnson & Johnson, Merck, MIT, Pfizer, Stanford and more will share their expertise on licensing to solve the innovation gap. (Patently-O readers save $100 by using promo code PO12 when registering) [Link]
  • The World Research Group is holding its 4th Annual Corporate IP Counsel Forum on May 16-17 in NYC. The Corporate IP Counsel Forum will address key issues and uncover latest developments related to IP in the form of case studies and panel discussions. Some of the topics include, but are not limited to: The America Invents Act and its impact on patent litigation and prosecution, IP monetization strategies for small and mid-size companies, Patent valuation, The top 10 most influential court cases in IP this year, Patent eligibility, Invention mining, Divided infringement, Best practices for combating non-practicing entities, Appeals to the U.S. Court of Appeals for the Federal Circuit, Copyright infringement. [Link]
  • The Annual DRI Business Litigation and Intellectual Property Seminar will be held May 16-18, 2012, in New York City. Attendees will learn trial and appellate advocacy skills in business litigation get up-to-date on the last trends in intellectual property and business litigation, and network with in-house counsel, business and intellectual property trial lawyers and experts from across the country. Speakers include: Former ABA President, Dennis W. Archer, Dennis Archer PLLC, and David Leitch, VP and General Counsel of Ford Motor Company. [Link]
  • The San Francisco Intellectual Property Law Association is hosting its annual seminar in Healdsburg, the center of one of California's best wine regions, from June 1-3. Speakers include Hon. Margaret A. (Peggy) Focarino, USPTO Commissioner of Patents, Hon. Robert Stoll, former USPTO Commissioner of Patents, Hon. Gerard F. Rogers, Chief Administrative Trademark Judge of the TTAB, Hon. Randall R. Rader, Chief Judge of Federal Circuit, Hon. Susan Illston, Judge of N.D.CA, Hon. Edward J. Davila, Judge of N.D.CA, as well as professors and leading practitioners. [Link]
  • On May 21-22 Ronald Slusky will hold a seminar in Chicago, the seminar teaches a comprehensive approach to analyzing inventions and capturing them in a sophisticated set of patent claims. The seminar is based on Ronald's book, Invention Analysis and Claiming: Patent Lawyer's Guide. [Link]
  • ACI will hold a Biosimilars conference May 22-23 in New York, NY. The conference will focus on the legal, regulatory, and commercial realities of biosimilars. [Link]
  • The ACI 3rd annual Hatch-Waxman Boot Camp will be held June 25-26 in San Diego. Topics to be covered include: the organization, jurisdiction of the FDA and the PTO and their interplay in the patenting of drugs and biologics, how the approval process for drugs and biologics is connected to the patenting of these products, how the Hatch-Waxman Act established the paradigm for market entry of generic small molecule drugs – and how biosimilar and many others. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, , , , , ,

IP's contribution to the US economy

  • A recent USPTO whitepaper reports that IP industries contribute $5 trillion and 40 million jobs to the US economy. Some of the report major findings are:
    • The entire US economy relies on some form of IP, because virtually every industry either produces or uses it.
    • IP-intensive industries directly accounted for 27.1 million American jobs, or 18.8% of all employment in the economy, in 2010.
    • Jobs in IP-intensive industries pay well compared to other jobs. Average weekly wages for IP-intensive industries were 42% higher than the average weekly wages in non IP-intensive industries.
    • Growth in copyright-intensive industries (2.4%), patent-intensive industries (2.3%), and trademark-intensive industries (1.1%) all outpaced gains in non-IP intensive industries.

    Report

Rights of the dead

  • At Coachella 2012 Tupac Shakur appeared on stage and as if he was actually alive and performing. What rights does the family of Tupac or other deceased entertainers have when it comes to situations like this?
  • California Civil code Section 3344.1 (a)(1) reads in part:
    • Any person who uses a deceased personality's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent from the person or persons specified… shall be liable for any damages…

    Section (a) (2) reads:

    • For purposes of this subdivision, a play, book, magazine, newspaper, musical composition, audiovisual work, radio or television program, single and original work of art… shall not be considered a product, article of merchandise, good, or service if it is fictional or nonfictional entertainment, or a dramatic, literary, or musical work.

    Having a dead celebrity performing electronically on stage seems like it falls into the audiovisual work exception under section (a) (2). I have yet to see anyone attempt to file a business-method patent on the dead touring, but I assume that someone may attempt to monopolize the business. [Link]

Patent Jobs:

  • Edell, Shapiro & Finnan is seeking an experienced EE patent attorney with an advanced degree in EE or physics. The firm is also seeking an associate/agent/tech writer with an EE or computer science degree to work at their Rockville, MD office. [Link]
  • Amgen is searching for Sr. Counsel with 4 years of patent or IP practice to work at their California location. [Link]
  • North Star IP is looking for a patent associate with 3 to 4+ years of prosecution experience and a background in EE, computer engineering, or computer science to work at their DC office. [Link]
  • Sterne, Kessler, Goldstein & Fox is seeking experienced electrical IP attorneys with a degree in EE or computer engineering to work at their DC office. [Link]
  • Cantor Colburn is searching for an associate ME/EE patent attorney with 3-5 years of experience. [Link]
  • Cantor Colburn is looking for IP litigation associates with 2-4 years of litigation experience. [Link]
  • The Kohler Company is seeking an IP attorney with 2+ years of experience to work at their Kohler, Wisconsin location. [Link]
  • Rutan & Tucker is searching for a patent associate/agent with 3-4 years of experience to work at their California office. [Link]
  • Rathe Lindenbaum is looking for a patent attorney/agent with experience in mechanical, electromechanical or chemical engineering and 3+ years of experience to work at their Milwaukee office. [Link]
  • NONY is looking for a US patent attorney/agent or UK patent attorney to work at their Paris, France office. [Link]

Upcoming Events:

  • The University of Colorado School of Law will hold a conference on April 24th. The conference, Patents on the Range or Wild Frontier, will discuss the future of patent policy. Guest speakers include: David Kappos, Don Rosenberg, John Thorne, Paul Ohm, Bernard Chao, and many others. [Link]
  • ACI will hold its 6th Annual Paragraph IV Disputes conference on April 24-25 in New York City. The conference will cover topics such as: the impact of the AIA on Hatch-Waxman litigation, claim construction, prior art obviousness and obvious-type double patenting, and many other topics. (Patently-O readers register with PO 200 for a discount). [Link]
  • The DC Bar IP Law Section 2012 Annual Spring Reception will be held April 25th. The D.C. Bar Intellectual Property Law Section awards the 2012 "Champion of Intellectual Property" Award to the late Paul J. Luckern, Chief Judge of the International Trade Commission. Guest include Chief Judge Randall R. Rader of the U.S. Court of Appeals for the Federal Circuit, Judge Theodore R. Essex of the ITC, and Lynn I. Levine, Director of the ITC's Office of Unfair Import Investigations. [Link]
  • Fitch, Even, Tabin & Flannery, LLP will present a free one-hour CLE webinar, "Trademark Protection Strategies in Social Media," on April 25, 2012 at 12 noon EST. The proliferation of social media outlets frequented by millions of users have created untold opportunities for trademark exposure and potential infringement. Joseph T. Nabor will discuss strategies to protect trademarks in the social media arena, including monitoring and enforcement against infringement, creating social media policies, related ethics issues, and using social media in litigation support. [Link]
  • LES 2012 Spring Meeting – "Licensing to Solve the Innovation Gap" will be held May 15-17, Boston, MA. Speakers from GE Healthcare, Harvard, Hoffmann-LaRoche, Intel, Johnson & Johnson, Merck, MIT, Pfizer, Stanford and more will share their expertise on licensing to solve the innovation gap. (Patently-O readers save $100 by using promo code PO12 when registering) [Link]
  • The World Research Group is holding its 4th Annual Corporate IP Counsel Forum on May 16-17 in NYC. The Corporate IP Counsel Forum will address key issues and uncover latest developments related to IP in the form of case studies and panel discussions. Some of the topics include, but are not limited to: The America Invents Act and its impact on patent litigation and prosecution, IP monetization strategies for small and mid-size companies, Patent valuation, The top 10 most influential court cases in IP this year, Patent eligibility, Invention mining, Divided infringement, Best practices for combating non-practicing entities, Appeals to the U.S. Court of Appeals for the Federal Circuit, Copyright infringement. [Link]
  • The Annual DRI Business Litigation and Intellectual Property Seminar will be held May 16-18, 2012, in New York City. Attendees will learn trial and appellate advocacy skills in business litigation get up-to-date on the last trends in intellectual property and business litigation, and network with in-house counsel, business and intellectual property trial lawyers and experts from across the country. Speakers include: Former ABA President, Dennis W. Archer, Dennis Archer PLLC, and David Leitch, VP and General Counsel of Ford Motor Company. [Link]
  • The San Francisco Intellectual Property Law Association is hosting its annual seminar in Healdsburg, the center of one of California's best wine regions, from June 1-3. Speakers include Hon. Margaret A. (Peggy) Focarino, USPTO Commissioner of Patents, Hon. Robert Stoll, former USPTO Commissioner of Patents, Hon. Gerard F. Rogers, Chief Administrative Trademark Judge of the TTAB, Hon. Randall R. Rader, Chief Judge of Federal Circuit, Hon. Susan Illston, Judge of N.D.CA, Hon. Edward J. Davila, Judge of N.D.CA, as well as professors and leading practitioners. [Link]
  • On May 21-22 Ronald Slusky will hold a seminar in Chicago, the seminar teaches a comprehensive approach to analyzing inventions and capturing them in a sophisticated set of patent claims. The seminar is based on Ronald's book, Invention Analysis and Claiming: Patent Lawyer's Guide. [Link]
  • ACI will hold a Biosimilars conference May 22-23 in New York, NY. The conference will focus on the legal, regulatory, and commercial realities of biosimilars. [Link]
  • The ACI 3rd annual Hatch-Waxman Boot Camp will be held June 25-26 in San Diego. Topics to be covered include: the organization, jurisdiction of the FDA and the PTO and their interplay in the patenting of drugs and biologics, how the approval process for drugs and biologics is connected to the patenting of these products, how the Hatch-Waxman Act established the paradigm for market entry of generic small molecule drugs – and how biosimilar and many others. [Link]

Contact Lawrence.Higgins@patentlyo.com with leads for future Bits and Bytes.

Patent Specifications Continue to Rise in Size

Patent

by Dennis Crouch

In 2008, I reported on a trend that I termed the “Rising Size and Complexity of the Patent Document.”  Since then, the size of patent specifications have continued to grow. Patent specifications continue to grow — another 10% on average since 2008.

The chart below shows the average number of characters in the body of utility patent applications grouped by application filing year and includes data from all applications filed during the given year and published since 2005.

PatentlyO138.

As the second chart suggests, shorter applications (those in the first quartile) are less likely to issue as patents within the four years of the publication date. To build this chart, I calculated the specification size for each application published 2005–2007 and also determined whether a resulting patent had issued.

PatentlyO139

Copyright Lawsuit against Patent Firms Continue: Firms Claim Fair Use and Copyright Misuse

Patent, ,

John Wiley & Sons v. McDonnell Boehnen Hulbert & Berghoff (MBHB) (N.D. Ill.) (Complaint)

Earlier this year, Wiley sued the MBHB law firm for copyright infringement. The basis of the lawsuit stems from the firm’s compliance with its duty to inform the USPTO of information materially related to the cases that it is handling. See 37 C.F.R. 1.56. The complaint identifies two short scientific articles that the firm submitted to the USPTO:

  • Raznikov, V., et al., “A new approach to data reduction and evaluation in high resolution time-of-flight mass spectrometry using a time-to-digital convertor data recording system,” Rapid Communications in Mass Spectrometry, vol. 15, No. 8, pp. 570-578 (2001); and
  • Erchak, A., et al., “Enhanced coupling to vertical radiation using a two dimensional photonic crystal in a semiconductor light-emitting diode,” Applied Physics Letters, vol. 78, No. 5, pp. 563-565 (2001).

The crux of Wiley’s argument is that the firm infringed Wiley’s exclusive rights by submitting these documents to the USPTO as well as by allegedly sharing the articles with the inventors and storing a copy in the firm’s files. I contacted one of the authors – Nobel Laureate, Dr. Alan Heeger – from the parallel Schwegman case. Dr Heeger had not previously heard of the lawsuits. He had only two comments: (1) that the lawsuits seem “somewhat strange” and (2) that he is not receiving any royalties from the article.

More Background on the Case

The MBHB law firm has now filed its answer to the complaint – arguing that Wiley’s lawsuit is both troubling and disruptive to the operation of the US patent system.

Plaintiffs seek in this case to create unprecedented liability for law firms filing patent applications that would change long established practices in fulfilling legal obligations under the Patent Law and Regulations requiring patent practitioners to disclose prior art to the United States Patent and Trademark Office (“USPTO”). Such a result would undermine the Patent Office’s ability to get full disclosure of relevant prior art to the detriment of our patent system and, thus, to innovation in general. Fortunately, Plaintiffs’ claims are without merit.

The process of securing U.S. patents is dictated by complicated USPTO Rules and Federal regulations. Failure to comply with those Rules and Regulations could lead, among other things, to fraud on the USPTO and could jeopardize a patent’s scope, validity and enforceability. . . .

Now, Plaintiffs John Wiley & Sons, Ltd. and American Institute of Physics (“Plaintiffs”) attempt to introduce a costly new requirement into this long-standing practice. They seek to impose a requirement on those practicing patent prosecution to negotiate a license with the holder of the copyright in the journals before complying with the Patent Office’s prior art submission requirements. Plaintiffs’ misguided attempt to change established practice will only serve to undermine the full disclosure requirements of the USPTO and interfere with access to the constitutionally mandated patent system.

Because of the negative impact of claims such as the Plaintiffs’ on the patent system, and thus on its goal of encouraging innovation, the Patent Office has taken the unusual step of posting on its website a position paper from Bernard J. Knight, Jr., General Counsel of the USPTO, stating the USPTO’s position that copying and submitting non-patent literature (“NPL”) by patent applicants in order to satisfy the USPTO’s disclosure requirements is fair use. The official position paper addressed all four fair use factors and concluded that “we believe that it is a fair use for an applicant to make copies of NPL and submit those copies to the USPTO during examination in an [Information Disclosure Statement].” The General Counsel’s position was based in part on the fact that “the applicants here are not ‘exploiting’ the copyrighted work, and are instead merely submitting it, pursuant to a legal requirement, based on its factual, rather than its expressive, content [and] the use could be considered transformative.” The General Counsel also concluded that “there is no basis for concluding that the applicants submission of NPL to the USPTO has any significant negative impact on the market for the submitted NPL.”

Plaintiffs’ attempt to characterize MBHB’s alleged use of the scientific journal articles as anything but a legal, customary practice by attorneys to comply with their legal obligations during patent prosecution is unavailing. MBHB is being sued simply for following the requirements of the patent regulations. An adverse judgment against MBHB would harm not just MBHB, but all firms who practice in this area, and interfere with the federal government’s interest in promoting an inexpensive and efficient patent system whereby prior art is appropriately disclosed. Plaintiffs’ allegations, thus, fit squarely within the parameters of what the Copyright Act deems as a fair use. Accordingly, as a matter of law, Plaintiffs lack meritorious grounds for their copyright infringement suit.

The answer claims includes a number of defenses including fair use; copyright misuse; immunity under the Noerr-Pennington doctrine; and implied license.

Supreme Court: District Courts must Review PTO Factual Findings De Novo in Cases Challenging Board Decisions

Patent, ,

By Dennis Crouch

Kappos v. Hyatt (Supreme Court 2012)

This case involves a patentee’s right to a file a civil action in district court challenging the USPTO’s refusal to grant a patent. 35 U.S.C. § 145. In a unanimous decision, the Supreme Court has affirmed the Federal Circuit ruling that the patent applicant’s presentation of new evidence to the district court requires that court to make de novo factual findings that consider both the new evidence and the administrative record. The USPTO had asked that the court to apply a higher standard of deference to agency factual findings.

This ruling has two major caveats:

  • Deference will be given to PTO factual findings if the applicant fails to present any new contradictory evidence at the trial.
  • Although it must undertake a de novo review, a court can give less weight to newly presented evidence based upon its consideration of “the proceedings before and findings of the Patent Office.”

In its brief, the USPTO argued that the standard employed here would “encourage patent applicants to withhold evidence from the PTO intentionally with the goal of presenting that evidence for the first time to a nonexpert judge.” The Supreme Court rightfully rejected that scenario as “unlikely” in most cases. There are two reasons for this: (1) as the Court notes, this strategy would serve to undermine their chances of directly obtaining a patent from the USPTO based upon the speculative strategy of having a court find the invention patentable; and (2) in my estimation, some amount of new evidence (such as expert testimony and test results) can always be obtained after trial. This is especially true because of the limited manner in which testimony can be presented to an examiner or in an ex parte appeal to the Board.

In this particular case, however, Hyatt has some reason to sandbag because his application was filed pre-1995 and covers basic building blocks of the modern computer. The delay in issuance likely means additional revenue sources that may persist for 17 years from the issue date.

This result here is appropriate in our current world where ex parte appeals to the PTO Board have become a standard and regular aspect of patent prosecution. Those appeals have become somewhat commodified and many firms offer a fixed price. This makes business sense under Hyatt because the applicant still has a chance to fully press its case and present additional evidence after losing at the Board.

Justice Thomas penned the majority opinion.

In a concurring opinion, Justice Sotomayor (joined by Justice Breyer) offered some thought as to particular times when a district court may offer less weight to evidence presented only at trial. Justice Sotomayor primarily discussed the 1927 deliberate suppression case of Barrett Co. v. Koppers Co., 22 F. 2d 395, 396 (3rd Cir. 1927). In that case, the patent applicant refused to allow their witnesses to answer questions from the chief examiners. The appellate court in that case ruled that the applicant was estopped from later introducing evidence that it had purposely withheld. Learned Hand wrote in a later case that estoppel should not apply when the suppression was merely negligent. Relying on these cases, Justice Sotomayor wrote her suggestion that

when a patent applicant fails to present evidence to the PTO due to ordinary negligence, a lack of foresight, or simple attorney error, the applicant should not be estopped from presenting the evidence for the first time in a §145 proceedings.

Although not expressly stated, I suspect that the purpose of “keeping costs low” would fall within Justice Sotomayor’s category of permissible suppression. Of course, these suggestions from Sotomayor are not part of the majority opinion, which did not cite Barrett or the Learned Hand decision of Dowling v. Jones, 67 F. 2d 537 (2nd Cir. 1933).

In application of this rule to the facts here, Justice Sotomayor began with the presumption that new evidence should be allowed and found that the USPTO had not (yet) met its burden to show wrongful suppression.