October 2011

Book Review: Introduction to Patent Law for Non-Lawyers

Book Review, Patent,

NotSoObviousby Dennis Crouch

Jeff Schox recently sent me a copy of his new book on patent law: Not So Obvious: An Introduction to Patent Law and Strategy. Schox uses the $39 paperback for the patent class he teaches to Stanford engineering students. The book is written in plain language and is clearly designed to be read by engineers wanting a first-cut understanding of the patent system and its purpose. In addition to patentability and infringement, the book also includes a nice chapter on inventorship and ownership rights. 

In the past, I have often recommended the "Patent it Yourself " book by David Pressman to inventors and others wanting to better understand the process. The problem with Pressman's book is that it has become so lengthy (596 pages) that it is no longer an easy resource for those more casually involved in the system.  Schox book likely fills that gap. (PIY is still a great resource for those more deeply involved in prosecution.)

Do others have recommendations of patent law resources for inventors who want to better understand the system without actually becoming patent agents? 

Stay Pending Reissue: Timing and Blog Reliability

Patent, Patent Cases 2011, Reexamination, Reissue,

Tyco Fire Products LP v. Victaulic Co., 10-cv-4645 (E.D. Pa. October 4, 2011)

by Dennis Crouch

In September 2010, Tyco Fire filed suit against Victaulic alleging infringement of two fire sprinkler system patents. U.S. Patent Nos. 7,793,736 and 7,819,201. Almost one-year into the lawsuit, Tyco Fire filed a pair of reissue application with the PTO – admitting that that both patents have defects that need correcting. The reissue applications request that the PTO narrow the subject matter being claimed with the apparent hope of avoiding an adverse invalidity decision in court.

Patentlyo087_small[1] After filing the reissue applications, the patentee requested that the district court stay the litigation pending the outcome of the reissue. In response, Victaulic cited my post from January 2011 identifying the average five-year pendency for reissued patents. In a brief filed under seal, Tyco's attorneys from Morgan Lewis called my post "unreliable" and "unsubstantiated" because it was found in a blog.

In deciding the issue, the judge correctly found that the reissue will certainly take some time even if my post regarding the average delay does not exactly predict the path for Tyco's applications. A potential important difference is that my data reflects the average for all reissue prosecutions but does not separate-out cases going through expedited reissue. See MPEP § 1442.

In the end, the judge refused to stay the litigation based upon the potential delay and the fact that the reissue does not appear to be likely to narrow the issues in the litigation. In addition, the court found that the reissue was motivated by claim construction questions posed by the defendant in the litigation. This timing issue (first seeing the claim construction arguments, then filing for reissue) raised "alarm bells" with the judge who identified the move as a potential "litigation gambit" intended to give the plaintiff a tactical advantage.

Stay denied.

Note: I contacted the Morgan Lewis attorneys who submitted the brief for a comment on what was particularly unreliable or unsubstantiated regarding my post. They have not responded.

BPAI’s ex parte Decision Based Upon New Factual Findings Constitutes a New Ground of Rejection

BPAI, Patent, Patent Cases 2011, , ,

Patent2011031In re Stepan Co. (Fed. Cir. 2011)

by Dennis Crouch

This is an important administrative patent law case holding that when the Board of Patent Appeals (BPAI) affirms a rejection based upon a new factual finding, it must identify the holding as a new ground for rejection.  This holding benefits patent applicants because it creates a right to either reopen prosecution or request a rehearing based upon the new ground.

Here, the examiner rejected Stepan's claims as anticipated and obvious.  Stepan had submitted a Rule 1.131 affidavit claiming a prior invention date in order to antedate one of the references. However, the examiner gave the affidavit no legal effect based upon the judgment that a prior public use of a portion of the invention qualified as 102(b) prior art because it occurred more than one year before the application filing date.

In the administrative appeal, the Board ruled that the applicant could claim priority to an earlier application and that, therefore the the prior art was no longer 102(b) prior art. However, the Board affirmed the rejection after holding that the prior use was still 102(a) prior art because the content of the Rule 1.131 affidavit was insufficient to prove Stepan's prior invention rights.

Writing for the Court of Appeals for the Federal Circuit, Judge Prost vacated the Board's decision — holding that the Board's factual finding on the sufficiency of the content of the affidavit was a new factual finding that was not a basis of the examiner's rejection being reviewed and, therefore, that the Board must identify the affirmed rejection as a new ground of rejection.

Notice does not focus on the applicant’s arguments divorced from the examiner’s rejections of record that are actually appealed to the Board.  Instead, it focuses on the “adverse decisions of examiners” during prosecution which form the basis of the Board’s scope of review.  35 U.S.C. § 6(b).  Because Stepan did not have prior notice of the Board’s intent to craft and rely on new findings of fact to support a §§ 102(a)/103(a) rejection and because it failed to identify this rejection as a new ground, Stepan’s notice rights were violated.  5 U.S.C. § 554(b)(3); 35 U.S.C. § 6(b).  Had the Board labeled its rejection as a new ground of rejection, Stepan could have reopened prosecution to address the newly-alleged deficiencies in its Declaration with the examiner. 

Note: Although this case involves an ex parte reexamination, the principles here apply equally with ordinary ex parte examination.  However, the decision will not apply to the new post grant review proceedings under the Leahy-Smith AIA because the review goes directly to the Board (the newly named Patent Trial and Appeal Board or PTAB) rather than an examiner.

The Narrows: Winning by Arguing Both Trade Secret Misappropriations and Patent Infringement

Patent, Patent Cases 2011, Trade Secret, ,

Atlantic Research Marketing Systems (ARMS) v. Troy Industries (Fed. Cir. 2011)

By Dennis Crouch

This appeal stems from a 2007 patent infringement and business tort lawsuit filed by ARMS against its former employee and current competitor (Mr. Troy). ARMS' reissue patent claims a firearm hand-guard with an attachment point at the firearm's barrel nut. The original patent application included both the barrel nut attachment and a sleeve support as claim limitations. However, the reissue patent does not require the sleeve support. That change is important for the case because TROY's competing hand-guard uses the barrel nut as the single attachment point.

On summary judgment the district court ruled the patent invalid for failing the written description requirement of 35 U.S.C. § 112 p1.

Written Description Requirement: Section 112 p1 of the Patent Act requires that a patent specification include "a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same." In Ariad, the Federal Circuit reaffirmed that this provision creates the separate and distinct requirements of written description and enablement. The test for written description considers whether, after reading the original specification, one of skill in the art would understand that the inventor was in possession of the claimed invention. Most written description cases arise in situations like this where the patentee has amended its claims well after the application filing date.

Although not cited here, this case is similar to the Federal Circuit's Gentry Gallery decision where an element in the original claims was omitted in a broader-amended claim. In Gentry Gallery, the original application was directed to a pair of recliners with controls located on a console. The amended claims removed any restriction on the console location. The Federal Circuit held those broader claims invalid because "the patent disclosure did not support claims in which location of recliner controls was other than on the console."

On appeal here, the Federal Circuit agreed that the broader claims are invalid under the written description requirement because it the specification does not provide any evidence that the inventor invented a hand-guard that uses the barrel nut as the one and only attachment point.

[I]t is undisputed that the written description for the '465 patent does not disclose to a person of ordinary skill in the art an invention where the yoke/barrel nut attachment point provides complete support for the handguard accessory. Claims 31-36, however, clearly cover such a design. Put differently, claims 31-36 [as amended] exceed in scope the subject matter that [the inventor] chose to disclose to the public in the written description. Therefore, we hold that the district court properly granted summary judgment invalidating claims 31-36 for failing to satisfy the written description requirement of 35 U.S.C. § 112. Mr. Swan used the reissue process to impermissibly obtain claims unsupported by the written description.

ARMS had also sued TROY for trade secret violation and argued in court that ARMS version of the barrel-nut-only attachment was a trade secret stolen by TROY. That testimony bolstered the court's conclusion that the asserted claims lacked the written description support to cover a barrel-nut-only attachment.

[ARMS] cannot now "have it both ways" by reaching back and relying on the disclosures in the '245 patent to claim an invention he was purposely shielding from the public.

Trade Secret Violation: Although TROY won the patent dispute, the jury found troy liable for trade secret misappropriation and breach of a fiduciary duty to his former employee. The award was $1.8 million in damages under Massachusetts Trade Secret Law. (Massachusetts has not adopted the UTSA). As noted above, the alleged trade secret is the method of attaching the hand-guard to a firearm using only the barrel nut. The jury was instructed that any protectable trade secret must go beyond what was disclosed in the '245 patent. Based upon that instruction, the Federal Circuit affirmed – finding no clear error.

This strategy worked perfectly for ARMS who would likely be satisfied winning either patent infringement or trade secret misappropriations. Although the court clearly sympathized with TROY's position, it noted that the legal positions taken by the two parties meant that ARMS was likely to win one of its claims.

Troy's argument illustrates the inherent tension Atlantic Research created by contending that Troy misappropriated trade secrets, while simultaneously asserting that the products Troy developed with the misappropriated trade secrets infringed its patent. In response, Troy contended that Atlantic Research's patent disclosed the trade secret, but also contended that the patent asserted against it was invalid for failing to disclose a written description of a handguard that attaches solely at the barrel nut. These conflicting positions left little room for either party to prevail on both claims.

The problem: In the end, the Federal Circuit vacated the jury verdict on a "jury taint" issue. One juror brought a plumbing clamp from home during deliberations to show other jurors and the appellate panel held that the judge should have taken more dramatic steps to ensure that the clamp did not have any "prejudicial effect on the jury as a whole."

Patently-O Bits & Bytes by Lawrence Higgins

Bits and Bytes, Patent,

Is it really a First-to-File Patent System?

  • With the passage of the America Invents Act (AIA), the US was going to become a First-to-File, instead of a First-to-Invent patent jurisdiction. However, was this really accomplished with the AIA, or was something else achieved? When most people think of a First-to-File patent system, they would probably think it means exactly what it says (the first person to file the patent application has priority). However, the 1-year grace period exceptions in 35 U.S.C. 102(b) seems to create a quasi or pseudo First-to-File system.

    102(b) (1) reads:

    • DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION. – A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if –
  1. The disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor

The language of 102(b)(1) could cause lots of controversy. Essentially if an inventor puts his invention or disclosure on the internet or discloses it any public way, he/she has one year from that date to file a patent application, and the disclosure would not count as prior art against the inventor. However, the disclosure would count as prior art for a later inventor, which seems to suggest a First-to-Invent system. This creates an incentive for inventors to disclose inventions immediately so as to bar other inventors and receive an early priority date. I expect litigation about this topic and the many situations that could arise.

Judge T. John Ward, Sr. Steps Down

  • Judge Ward, who is credited with turning Marshall, Texas into an unlikely hotspot for patent litigation, will return to the practice of law at Ward & Smith. Judge Ward will practice law alongside his son T. John ("Johnny") Ward, Jr. During Ward's tenure, the Eastern District also developed a reputation as being a haven for patent holders, particularly nonpracticing entities, or "patent trolls." Could the departure of Judge Ward potentially lead to a decrease in the amount of cases filed in the Eastern District of Texas? [Link]

WIPO's Statistical Country Profiles Tool

  • Statistical country profiles provide information on patents, utility models, trademarks and industrial designs. They cover different dimensions of IP activity, including incoming and outgoing filings, the share of filings in different technological fields, total patents in force, and the use of international IP systems by applicants. The filings and grants are divided into the following categories: "resident" – domestic filings; "non-resident" – filings coming in from other countries; "abroad" – filings going out to other countries. The statistics also associate IP activity relative to countries' economic performance. For example, users can compare the trend of a country's total IP filings – defined as the sum of resident and abroad filings – with that of the country's GDP. Furthermore, they indicate the country's global rank for each indicator. [Link]

Upcoming Events:

  • Houston Intellectual Property Law Association (HIPLA) will be holding its Annual IP Institute in Galveston, Texas October 6-8. The Institute will feature topics such as: Do's and Don'ts in IP Licensing, Due Diligence and Ethics in Acquisitions, Patent Prosecution Under the New Cases and Inducement of Patent Infringement after Global Tech Appliances v. SEB. The guest speaker will be Lord Justice Robert "Robin" Jacob, Court of Appeal of England and Wales. [Link]
  • The 17th Annual Advanced ALI-ABA Course of Study for the Corporate Counsel and the Private Practitioner: Trial of a Patent Case will be held in Chicago October 13-14. Guest speakers include: Judge James Holderman, Judge Liam O'Grady, Scott Coonan, James Leeds, and many more individuals. (Patently-O readers can get 30% off with discount code CT017POB) [Link]
  • The 4th Annual Inland Empire Intellectual Property Institute (IEPI) will be held in Spokane, Washington on October 14th. The program will cover: developments in patent prosecution, patent litigation, copyright and trademark; ethical considerations for IP attorneys; patent reform and its impact on the practicing attorney, and many more topics. Guest speakers include: David Powers, Nancy Kim, Shirley Anderson and many other individuals. [Link]
  • American Conference Institute will be holding a FDA Boot Camp Device Edition conference on October 25th-October 26th in Chicago. (Patently-O readers can register with code PO 200 for a discount) [Link]
  • Licensing Executives Society (LES) will be holding their annual meeting on October 16-19 at the Manchester Grand Hyatt in San Diego. Guest speakers include, Martha Ries, VP of IP Management, The Boeing Company and Barbara Dalton VP, Venture Capital, Pfizer. [Link]
  • The University of Texas at Austin will hold its 16th Annual Advanced Patent Law Institute on October 27-28. The program will cover: recent developments in claims construction and claims drafting, cost savings in litigation, inequitable conduct after Therasense, and many other topics. [Link]
  • IPMI is holding the IP Law & Management Institute on November 6th – 8th at the Rancho Las Palmas in Palm Springs, CA. Hailed as "One of the few programs geared to experienced in-house IP Counsel", the Institute is a CLE-accredited program designed to provide time-starved Heads of IP with the Opportunity to meet and network with their peers, learn from the best practices and validate solutions and services. [Link]
  • IBC will hold a Standards and Patents Conference in London on November 16th & 17th. The conference will analyze the interplay between standards, intellectual property and competition law. There will be 28 speakers representing various organizations, such as, the European Commission, Mr. Justice Floyd, IBM, Qualcomm Europe, Nokia, GE Healthcare and Intel. (Patently-O readers receive a 10% discount) [Link]
  • IBC will hold a US Patent Reform Congress Conference on November 18th in London. The conference will focus in the impact of the Leahy-Smith America Invents for the European practitioner, with expertise from the EPO, AIPLA, USPTO and more. (Patently-O readers receive a 10% discount) [Link]

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

Patently-O Bits & Bytes by Lawrence Higgins

Bits and Bytes, Patent,

Is it really a First-to-File Patent System?

  • With the passage of the America Invents Act (AIA), the US was going to become a First-to-File, instead of a First-to-Invent patent jurisdiction. However, was this really accomplished with the AIA, or was something else achieved? When most people think of a First-to-File patent system, they would probably think it means exactly what it says (the first person to file the patent application has priority). However, the 1-year grace period exceptions in 35 U.S.C. 102(b) seems to create a quasi or pseudo First-to-File system.

    102(b) (1) reads:

    • DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION. – A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if –
  1. The disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor

The language of 102(b)(1) could cause lots of controversy. Essentially if an inventor puts his invention or disclosure on the internet or discloses it any public way, he/she has one year from that date to file a patent application, and the disclosure would not count as prior art against the inventor. However, the disclosure would count as prior art for a later inventor, which seems to suggest a First-to-Invent system. This creates an incentive for inventors to disclose inventions immediately so as to bar other inventors and receive an early priority date. I expect litigation about this topic and the many situations that could arise.

Judge T. John Ward, Sr. Steps Down

  • Judge Ward, who is credited with turning Marshall, Texas into an unlikely hotspot for patent litigation, will return to the practice of law at Ward & Smith. Judge Ward will practice law alongside his son T. John ("Johnny") Ward, Jr. During Ward's tenure, the Eastern District also developed a reputation as being a haven for patent holders, particularly nonpracticing entities, or "patent trolls." Could the departure of Judge Ward potentially lead to a decrease in the amount of cases filed in the Eastern District of Texas? [Link]

WIPO's Statistical Country Profiles Tool

  • Statistical country profiles provide information on patents, utility models, trademarks and industrial designs. They cover different dimensions of IP activity, including incoming and outgoing filings, the share of filings in different technological fields, total patents in force, and the use of international IP systems by applicants. The filings and grants are divided into the following categories: "resident" – domestic filings; "non-resident" – filings coming in from other countries; "abroad" – filings going out to other countries. The statistics also associate IP activity relative to countries' economic performance. For example, users can compare the trend of a country's total IP filings – defined as the sum of resident and abroad filings – with that of the country's GDP. Furthermore, they indicate the country's global rank for each indicator. [Link]

Upcoming Events:

  • Houston Intellectual Property Law Association (HIPLA) will be holding its Annual IP Institute in Galveston, Texas October 6-8. The Institute will feature topics such as: Do's and Don'ts in IP Licensing, Due Diligence and Ethics in Acquisitions, Patent Prosecution Under the New Cases and Inducement of Patent Infringement after Global Tech Appliances v. SEB. The guest speaker will be Lord Justice Robert "Robin" Jacob, Court of Appeal of England and Wales. [Link]
  • The 17th Annual Advanced ALI-ABA Course of Study for the Corporate Counsel and the Private Practitioner: Trial of a Patent Case will be held in Chicago October 13-14. Guest speakers include: Judge James Holderman, Judge Liam O'Grady, Scott Coonan, James Leeds, and many more individuals. (Patently-O readers can get 30% off with discount code CT017POB) [Link]
  • The 4th Annual Inland Empire Intellectual Property Institute (IEPI) will be held in Spokane, Washington on October 14th. The program will cover: developments in patent prosecution, patent litigation, copyright and trademark; ethical considerations for IP attorneys; patent reform and its impact on the practicing attorney, and many more topics. Guest speakers include: David Powers, Nancy Kim, Shirley Anderson and many other individuals. [Link]
  • American Conference Institute will be holding a FDA Boot Camp Device Edition conference on October 25th-October 26th in Chicago. (Patently-O readers can register with code PO 200 for a discount) [Link]
  • Licensing Executives Society (LES) will be holding their annual meeting on October 16-19 at the Manchester Grand Hyatt in San Diego. Guest speakers include, Martha Ries, VP of IP Management, The Boeing Company and Barbara Dalton VP, Venture Capital, Pfizer. [Link]
  • The University of Texas at Austin will hold its 16th Annual Advanced Patent Law Institute on October 27-28. The program will cover: recent developments in claims construction and claims drafting, cost savings in litigation, inequitable conduct after Therasense, and many other topics. [Link]
  • IPMI is holding the IP Law & Management Institute on November 6th – 8th at the Rancho Las Palmas in Palm Springs, CA. Hailed as "One of the few programs geared to experienced in-house IP Counsel", the Institute is a CLE-accredited program designed to provide time-starved Heads of IP with the Opportunity to meet and network with their peers, learn from the best practices and validate solutions and services. [Link]
  • IBC will hold a Standards and Patents Conference in London on November 16th & 17th. The conference will analyze the interplay between standards, intellectual property and competition law. There will be 28 speakers representing various organizations, such as, the European Commission, Mr. Justice Floyd, IBM, Qualcomm Europe, Nokia, GE Healthcare and Intel. (Patently-O readers receive a 10% discount) [Link]
  • IBC will hold a US Patent Reform Congress Conference on November 18th in London. The conference will focus in the impact of the Leahy-Smith America Invents for the European practitioner, with expertise from the EPO, AIPLA, USPTO and more. (Patently-O readers receive a 10% discount) [Link]

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

Patently-O Bits & Bytes by Lawrence Higgins

Bits and Bytes,

Is it really a First-to-File Patent System?

  • With the passage of the America Invents Act (AIA), the US was going to become a First-to-File, instead of a First-to-Invent patent jurisdiction. However, was this really accomplished with the AIA, or was something else achieved? When most people think of a First-to-File patent system, they would probably think it means exactly what it says (the first person to file the patent application has priority). However, the 1-year grace period exceptions in 35 U.S.C. 102(b) seems to create a quasi or pseudo First-to-File system.

    102(b) (1) reads:

    • DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION. – A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if –
  1. The disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor

The language of 102(b)(1) could cause lots of controversy. Essentially if an inventor puts his invention or disclosure on the internet or discloses it any public way, he/she has one year from that date to file a patent application, and the disclosure would not count as prior art against the inventor. However, the disclosure would count as prior art for a later inventor, which seems to suggest a First-to-Invent system. This creates an incentive for inventors to disclose inventions immediately so as to bar other inventors and receive an early priority date. I expect litigation about this topic and the many situations that could arise.

Judge T. John Ward, Sr. Steps Down

  • Judge Ward, who is credited with turning Marshall, Texas into an unlikely hotspot for patent litigation, will return to the practice of law at Ward & Smith. Judge Ward will practice law alongside his son T. John ("Johnny") Ward, Jr. During Ward's tenure, the Eastern District also developed a reputation as being a haven for patent holders, particularly nonpracticing entities, or "patent trolls." Could the departure of Judge Ward potentially lead to a decrease in the amount of cases filed in the Eastern District of Texas? [Link]

WIPO's Statistical Country Profiles Tool

  • Statistical country profiles provide information on patents, utility models, trademarks and industrial designs. They cover different dimensions of IP activity, including incoming and outgoing filings, the share of filings in different technological fields, total patents in force, and the use of international IP systems by applicants. The filings and grants are divided into the following categories: "resident" – domestic filings; "non-resident" – filings coming in from other countries; "abroad" – filings going out to other countries. The statistics also associate IP activity relative to countries' economic performance. For example, users can compare the trend of a country's total IP filings – defined as the sum of resident and abroad filings – with that of the country's GDP. Furthermore, they indicate the country's global rank for each indicator. [Link]

Upcoming Events:

  • Houston Intellectual Property Law Association (HIPLA) will be holding its Annual IP Institute in Galveston, Texas October 6-8. The Institute will feature topics such as: Do's and Don'ts in IP Licensing, Due Diligence and Ethics in Acquisitions, Patent Prosecution Under the New Cases and Inducement of Patent Infringement after Global Tech Appliances v. SEB. The guest speaker will be Lord Justice Robert "Robin" Jacob, Court of Appeal of England and Wales. [Link]
  • The 17th Annual Advanced ALI-ABA Course of Study for the Corporate Counsel and the Private Practitioner: Trial of a Patent Case will be held in Chicago October 13-14. Guest speakers include: Judge James Holderman, Judge Liam O'Grady, Scott Coonan, James Leeds, and many more individuals. (Patently-O readers can get 30% off with discount code CT017POB) [Link]
  • The 4th Annual Inland Empire Intellectual Property Institute (IEPI) will be held in Spokane, Washington on October 14th. The program will cover: developments in patent prosecution, patent litigation, copyright and trademark; ethical considerations for IP attorneys; patent reform and its impact on the practicing attorney, and many more topics. Guest speakers include: David Powers, Nancy Kim, Shirley Anderson and many other individuals. [Link]
  • American Conference Institute will be holding a FDA Boot Camp Device Edition conference on October 25th-October 26th in Chicago. (Patently-O readers can register with code PO 200 for a discount) [Link]
  • Licensing Executives Society (LES) will be holding their annual meeting on October 16-19 at the Manchester Grand Hyatt in San Diego. Guest speakers include, Martha Ries, VP of IP Management, The Boeing Company and Barbara Dalton VP, Venture Capital, Pfizer. [Link]
  • The University of Texas at Austin will hold its 16th Annual Advanced Patent Law Institute on October 27-28. The program will cover: recent developments in claims construction and claims drafting, cost savings in litigation, inequitable conduct after Therasense, and many other topics. [Link]
  • IPMI is holding the IP Law & Management Institute on November 6th – 8th at the Rancho Las Palmas in Palm Springs, CA. Hailed as "One of the few programs geared to experienced in-house IP Counsel", the Institute is a CLE-accredited program designed to provide time-starved Heads of IP with the Opportunity to meet and network with their peers, learn from the best practices and validate solutions and services. [Link]
  • IBC will hold a Standards and Patents Conference in London on November 16th & 17th. The conference will analyze the interplay between standards, intellectual property and competition law. There will be 28 speakers representing various organizations, such as, the European Commission, Mr. Justice Floyd, IBM, Qualcomm Europe, Nokia, GE Healthcare and Intel. (Patently-O readers receive a 10% discount) [Link]
  • IBC will hold a US Patent Reform Congress Conference on November 18th in London. The conference will focus in the impact of the Leahy-Smith America Invents for the European practitioner, with expertise from the EPO, AIPLA, USPTO and more. (Patently-O readers receive a 10% discount) [Link]

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

Notes from DC

Patent
  • Read the new Patently-O Patent Law Journal Essay by Prof. Sarnoff. He explains some of the problems arising from the elimination of section 102(f) in the new Patent Act.
  • I’ll be at the Houston’s 27th Annual Institute on Intellectual Property (in Galveston) this evening and tomorrow. I look forward to seeing you there. – Dennis
  • Intellectual Ventures has filed its first patent infringement lawsuit using its own name. Intellectual Ventures I & II v. Motorola Mobility, Inc.  The case was filed in Delaware using the new Feinberg Day firm and former Judge Joseph Farnon’s boutique firm as local counsel. The case asserts six patents: 6,412,953,  6,557,054,  6,658,464,  7,120,462,  7,409,450, and 7,810,144. IV obtained the patents from various sources, including Hyperspace Communications, Malibu Networks, Khyber Technologies, TeleShuttle, and the Taiwan-based company Industrial Technology Research Institute. The case is also interesting in that Google is a major investment in the Intellectual Venture funds and is also in the process of merging with Motorola.

Sarnoff: Derivation and Prior Art Problems with the New Patent Act

Academic Studies, Articles and Publications, Guest Post, Patent, Patent Legislation, , ,

In a new Patently-O Patent Law Journal essay, Professor Joshua Sarnoff (DePaul) highlights a set of important problems in the Leahy-Smith America Invents Act. The essay, titled Derivation and Prior Art Problems with the New Patent Act focuses primarily on the elimination of 35 U.S.C. § 102(f) and its implications regarding the patentability of material that was either wholly or partially derived from another source.

Professor Sarnoff writes: 

Legislation sometimes is enacted that obviously requires either immediate revision or creative administrative and judicial interpretation. The new Leahy-Smith America Invents Act's derivation and prior art provisions fall in that category. Whether or not the move from a first-to-invent to a first-inventor-to-file system is viewed as good policy and as authorized by the Constitution, the particular changes made to the prior art provisions may not prevent or invalidate patents on inventions derived from others, i.e., when the applicant has obtained knowledge of an invention from another, original inventor and then files for a patent on the same or a similar invention. In particular, obvious inventions made with unauthorized derived knowledge will now be patentable, given the elimination of prior art section § 102(f). Absent creative interpretations by the U.S. Patent and Trademark Office (PTO) and the courts, the new derivation proceedings will not prevent a first filer from obtaining a patent even if the first filer's invention is merely an obvious extension of information derived from another. Further, the new act adds a narrow and poorly understood category of prior art that may generate years of needless litigation to re-settle the currently well-understood boundaries of the public domain. I discuss these problems in detail below.

There is some hope that Congress and the Administration will take Professor Sarnoff's concerns to heart.

Read the article: Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Review 12 at /media/docs/2012/10/sarnoff.2011.derivation.pdf.

Prior Patently-O Patent Law Journal Articles include:

Patently-O Bits & Bytes by Lawrence Higgins

Bits and Bytes, Patent

Patent Jobs

  • Kessler Topaz Meltzer & Check is seeking an IP litigation associate with 4-6 years of experience. [Link]
  • Amin Talati is searching for a patent attorney with 10+ years of experience to work at their Chicago office. [Link]
  • Roberts Mlotkowski Safran & Cole is looking for an IP attorney with 2-4 years of experience and a background in electrical engineering. [Link]
  • Roberts Mlotkowski Safran & Cole is looking for an IP attorney with 2-4 years of experience and a chemical background. [Link]
  • Hope Baldauff Hartman is searching for patent agents and patent attorneys with a minimum 4 years of experience to work in their Atlanta office. [Link]
  • Howard & Howard Attorneys is looking for an IP associates with 4-8 years of experience and a EE or chemical background. [Link]
  • Axiom is seeking patent agents and patent attorneys to work remotely. [Link]
  • Fairchild Semiconductor is searching an IP attorney with at least 3 years of experience and an EE background. [Link]
  • Abel Law Group is seeking a patent attorney with 4+ years of experience and a chemical and/or ceramic background. [Link]
  • Choate, Hall & Stewart is looking for biologists, chemists and materials scientists to join their IP practice. [Link]
  • Holland & Hart is searching for an administrative IP specialist/Secretary. [Link]
  • Maginot, Moore & Beck is seeking patent attorneys with 1-5 years of experience and an EE background. [Link]
  • Akerman Senterfitt is searching for a Chemical IP associate with 1-3 years of experience. [Link]
  • Rutan & Tucker is looking for an experienced patent prosecution paralegal. [Link]
  • The Sughrue Firm is seeking patent attorneys with at least 2-3 years of experience to work in their D.C. office. [Link]
  • The Sughrue Firm is seeking patent attorneys with at least 2-3 years of experience to work in their Silicon Valley office. [Link]
  • The Ware Firm is searching for recent Federal Circuit Clerk with a technical background. [Link]
  • The Ware Firm is seeking a patent agent/technologist with a technical background. [Link]
  • DTS is looking for a patent searcher with 3+ years of searching and/or patent experience. [Link]

Patently-O Bits & Bytes by Lawrence Higgins

Bits and Bytes, Patent

Patent Jobs

  • Kessler Topaz Meltzer & Check is seeking an IP litigation associate with 4-6 years of experience. [Link]
  • Amin Talati is searching for a patent attorney with 10+ years of experience to work at their Chicago office. [Link]
  • Roberts Mlotkowski Safran & Cole is looking for an IP attorney with 2-4 years of experience and a background in electrical engineering. [Link]
  • Roberts Mlotkowski Safran & Cole is looking for an IP attorney with 2-4 years of experience and a chemical background. [Link]
  • Hope Baldauff Hartman is searching for patent agents and patent attorneys with a minimum 4 years of experience to work in their Atlanta office. [Link]
  • Howard & Howard Attorneys is looking for an IP associates with 4-8 years of experience and a EE or chemical background. [Link]
  • Axiom is seeking patent agents and patent attorneys to work remotely. [Link]
  • Fairchild Semiconductor is searching an IP attorney with at least 3 years of experience and an EE background. [Link]
  • Abel Law Group is seeking a patent attorney with 4+ years of experience and a chemical and/or ceramic background. [Link]
  • Choate, Hall & Stewart is looking for biologists, chemists and materials scientists to join their IP practice. [Link]
  • Holland & Hart is searching for an administrative IP specialist/Secretary. [Link]
  • Maginot, Moore & Beck is seeking patent attorneys with 1-5 years of experience and an EE background. [Link]
  • Akerman Senterfitt is searching for a Chemical IP associate with 1-3 years of experience. [Link]
  • Rutan & Tucker is looking for an experienced patent prosecution paralegal. [Link]
  • The Sughrue Firm is seeking patent attorneys with at least 2-3 years of experience to work in their D.C. office. [Link]
  • The Sughrue Firm is seeking patent attorneys with at least 2-3 years of experience to work in their Silicon Valley office. [Link]
  • The Ware Firm is searching for recent Federal Circuit Clerk with a technical background. [Link]
  • The Ware Firm is seeking a patent agent/technologist with a technical background. [Link]
  • DTS is looking for a patent searcher with 3+ years of searching and/or patent experience. [Link]

Patently-O Bits & Bytes by Lawrence Higgins

Bits and Bytes

Patent Jobs

  • Kessler Topaz Meltzer & Check is seeking an IP litigation associate with 4-6 years of experience. [Link]
  • Amin Talati is searching for a patent attorney with 10+ years of experience to work at their Chicago office. [Link]
  • Roberts Mlotkowski Safran & Cole is looking for an IP attorney with 2-4 years of experience and a background in electrical engineering. [Link]
  • Roberts Mlotkowski Safran & Cole is looking for an IP attorney with 2-4 years of experience and a chemical background. [Link]
  • Hope Baldauff Hartman is searching for patent agents and patent attorneys with a minimum 4 years of experience to work in their Atlanta office. [Link]
  • Howard & Howard Attorneys is looking for an IP associates with 4-8 years of experience and a EE or chemical background. [Link]
  • Axiom is seeking patent agents and patent attorneys to work remotely. [Link]
  • Fairchild Semiconductor is searching an IP attorney with at least 3 years of experience and an EE background. [Link]
  • Abel Law Group is seeking a patent attorney with 4+ years of experience and a chemical and/or ceramic background. [Link]
  • Choate, Hall & Stewart is looking for biologists, chemists and materials scientists to join their IP practice. [Link]
  • Holland & Hart is searching for an administrative IP specialist/Secretary. [Link]
  • Maginot, Moore & Beck is seeking patent attorneys with 1-5 years of experience and an EE background. [Link]
  • Akerman Senterfitt is searching for a Chemical IP associate with 1-3 years of experience. [Link]
  • Rutan & Tucker is looking for an experienced patent prosecution paralegal. [Link]
  • The Sughrue Firm is seeking patent attorneys with at least 2-3 years of experience to work in their D.C. office. [Link]
  • The Sughrue Firm is seeking patent attorneys with at least 2-3 years of experience to work in their Silicon Valley office. [Link]
  • The Ware Firm is searching for recent Federal Circuit Clerk with a technical background. [Link]
  • The Ware Firm is seeking a patent agent/technologist with a technical background. [Link]
  • DTS is looking for a patent searcher with 3+ years of searching and/or patent experience. [Link]

Kimberly-Clark v. First Quality Baby Products: No CAFC en banc resolution of standard for preliminary injunctions

Injunctions, Patent, Patent Cases 2011

By Jason Rantanen

Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC (precedential order denying rehearing en banc) Download 10-1382 order
Newman, O'Malley and Reyna dissenting

During the last few years a significant intra-circuit split has developed at the Federal Circuit over the appropriate standard to apply to likelihood of success determinations made in the context of requests for a preliminary injunction.  Last week the Federal Circuit declined to take the issue en banc in a move that prolongs the uncertainty but perhaps paves the way for Supreme Court review.

As in other areas of the law, the determination of whether to grant a preliminary injunction requires the applicant to establish four factors: a likelihood of success on the merits, irreparable harm in the absence of preliminary relief, that the balance of equities tips in the applicant's favor, and that an injunction is in the public interest.  The judges of the Federal Circuit disagree, however, about the standard for demonstrating a likelihood of success on the merits, as well as whether such a showing is a necessary prerequisite for entry of a preliminary injunction.

On this issue, several of the judges (including Judges Dyk and Prost, who participated on the panel in this case) apply the standard that an applicant fails to establish a liklihood of success on the merits if the accused party raises a defense that "does not lack substantial merit," and that such a failure precludes entry of a preliminary injunction.  This was the standard applied in the Kimberly-Clark opinion itself, in which the panel vacated a district court's entry of a preliminary injunction with respect to three patents (although it did affirm an injunction based on a fourth patent, concluding that the accused infringer "failed to raise a substantial issue of patentability"). Download 10-1382

Other judges, most vocally Judge Newman, take the view that a defense that does not "lack substantial merit" does not equate with a failure to establish a likelihood of success on the merits, and in any event should not automatically preclude entry of a preliminary injunction.  In her dissent in the denial of rehearing en banc in Kimberly-Clark, for example, Judge Newman – joined by Judges O'Malley and Reyna – criticizes the alternate rule as an absurdity.  "This standard essentially negates the possibility of grant of a preliminary injunction to preserve the status quo during patent litigation, for in today’s complex patent law it is hard to imagine a case in which a defense that is “not substantially meritless” cannot be devised at the preliminary stage."  Dissent at 5-6.  In support of her view, Judge Newman points to the disconnect between "lacks substantial merit" and the standard applied by everyone besides the Federal Circuit.  "The panel's approach is in conflict with not only the Supreme Court, but with every other circuit."  Id. at 6. Nor should a defense that lacks substantial merit automatically preclude entry of a preliminary injunction if the balancing of the four factors necessitates otherwise. See id. at 10-12. Judge O'Malley, writing separately, expressed her strong agreement with the points raised by Judge Newman, as well as concerns about the difficulties faced by district courts in resolving the court's precedent in this area.

Regardless who is correct on the appropriate standard for a preliminary injunction, it is apparent that a sharp split exists within the Federal Circuit that it will be unable to resolve on its own in the near future.  The denial of the en banc request suggests two possible outcomes: (1) that success of a preliminary injunction appeal to the Federal Circuit will continue to be heavily panel-dependant for foreseeable future, or (2) that the Supreme Court will intervene in this case or another to resolve the split and restore some predictability to the area of preliminary injunctions.

Private Federal Civil Actions for Trade Secret Infringement

Patent, Patent Legislation, Trade Secret

by Dennis Crouch

Senator Coons (D-Del.) today proposed a pair of trade secret focused amendments to the pending Currency Exchange Rate Oversight Reform Act of 2011.

Most trade secret litigation occurs at the state level. Although Title 18 of the US Code creates a cause of action for Trade Secret Theft, that provision gives standing only to the Attorney General and not to private parties. Senator Coons' amendment would open the door to a Private Civil Action for Trade Secret Theft that would be brought in Federal Court. In his press release, Senator Coons writes:

The … amendment, introduced with Senator Herb Kohl (D-Wis.), would protect U.S. businesses from the theft of trade secrets by allowing victimized companies to sue for trade-secret theft in federal court. The legislation would allow for a single, uniform, nationwide cause of action instead of the patchwork of state laws now in place, and would elevate trade-secret intellectual property on the same level as copyright, trademark and patent violations.

Federal Trade Secret Theft under Section 1832(a) requires a host of intentional acts involving stealing, copying, or receiving trade secret information that is related to a product produced in interstate or foreign commerce. The Coons amendment would allow a private civil action with the additional requirement that the plaintiff submit a sworn affidavit that either (1) there is a substantial need for nationwide service of process or (2) the case involves misappropriation of trade secrets from the US to another country.

The amendment also provides for immediate ex parte seizure orders and the award damages for the infringement.

Senator Coons also proposed a second amendment that would allow Homeland Security to share information and suspected counterfeit product samples with intellectual property rightholders. This would loosen the current rules that restrict information that Customs & Border Patrol can share with US rightholders.

Learn more:

  • David Almeling, Four Reasons to Enact a Federal Trade Secrets Act, 19 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 769 (2009) (describing the lack of uniformity in state implementation of the Uniform Trade Secrets Act).

Federal Circuit Upholds Strong Domestic Industry Requirement for USITC Patent Litigation

ITC, Patent, Patent Cases 2011, Standing

John Mezzalingua Associates (d/b/a PPC, Inc.) v. International Trade Commission (Fed. Cir. 2011)

by Dennis Crouch

Most U.S. patent litigation takes place in federal district courts. However, when an infringing product is imported into the U.S., the patentee typically has a right to complain to the U.S. International Trade Commission (USITC) and to request an order that blocks the infringing products from entering the U.S. under Section 337 of the Tariff Act of 1930 (as amended). The USITC was formerly known as the U.S. Tariff Commission and, despite its current "international" name, the agency is fully within the U.S. government.

The USITC offers benefits for patentees over federal court litigation. In particular, the USITC often reaches its conclusion in less time and is not bound by the equitable limitations on injunctive relief. However, damages are not available and USITC orders are subject to more political control via presidential review of exclusion orders.

A major caveat to the Section 337 actions is that the USITC only has power to act to protect a "domestic industry." In this case, the Federal Circuit appellate panel has affirmed the USITC's judgment that the patentee, PPC, failed to prove the existence of a domestic industry related to its patented coaxial cable connectors. (U.S. Design Patent No. D.440,539).

Domestic Industry. Section 337(a)(3) defines a domestic industry for articles protected by intellectual property. Under the statute, a domestic industry "shall be considered to exist if there is in the U.S."

A. significant investment in plant and equipment;
B. significant employment of labor or capital; or
C. substantial investment in its exploitation, including engineering, research and development, or licensing.

To qualify, these activities must be tied to the patent, copyright, trademark, mask work, or design being protected. To be clear, the nexus must be fairly tight.  Here, the ITC ruled that there was a domestic industry for some of PPC's asserted patents but no domestic industry for this particular patent –  even though the patents are in the same priority family.

PPC is a US company that designs and manufactures cable connectors. PPC does not itself manufacture any product covered by the '539 patent. However, it has previously filed (and won) a number of prior lawsuits against infringers and, in one instance, licensed the '539 patent as part of a settlement agreement.  Here, it was clear that PPC had made "substantial investment" in protecting its patent rights through litigation and the patentee argued that investment fits within the "licensing" prong of 337(a)(3)(C)'s domestic industry definition.

On appeal, the Federal Circuit acknowledged that the statute does not indicate whether litigation expenses can count toward licensing investment.  In resolving the issue, the panel held that infringement litigation expenses will not normally be counted as licensing investment even if the result of the litigation is a license — otherwise the domestic industry requirement would be effectively meaningless. The court noted that litigation expenses may count toward licensing investment if, for instance, PPC had offered to license the patent prior to litigation or otherwise conducted settlement or licensing negotiations during the litigation.  The fact that PPC asked for injunctive relief in the prior litigation was also used as evidence that the prior litigation was directed toward protecting exclusive rights rather than part of a licensing initiative.

Standing: PPC had actually won its case at the USITC, but on a different patent. In the appeal, the USITC argued that PPC had no standing to appeal the favorable decision. The Federal Circuit rejected that argument — holding that PPC had a separate interest in obtaining a general exclusion order in the '539 patent even though all currently identified products will be excluded based upon the separate patent.

Dissent: Judge Reyna dissented — arguing that a patentee's infringement litigation expenses should count toward the licensing prong of the domestic industry requirement. Judge Reyna here provides a full analysis of the case that both explains his legal and factual arguments for reversal.

Verizon and Google combined forces to file a brief of amici curiae arguing that litigation expenses should not be counted in the domestic industry inquiry.  These industry-giants were concerned that the court would open the door for non-practicing entities to assert their rights in the USITC.  They argue "Patent litigation is not a protectable domestic industry."  Download GoogleVerizonITCBrief.

For those interested in studying USITC litigation, some excellent recent analysis of the judicial body has been done by Colleen Chien and Sapna Kumar.  You may also want to download the Section 337 Practice Guide.

s

No Litigation Estoppel until All Appeals Exhausted in Inter Partes Reexamination

BPAI, Patent, Patent Cases 2011, Reexamination,

Bettcher Industries v. Bunzl USA (Fed. Cir. 2011)

by Dennis Crouch

For one summer during college, I worked in a meat packing plant. In one hand, I wielded a power-operated knife while the other, gloved in chain-mail, held thawing pork-bellies. This case involves litigation over a hand-held rotary blade used in the commercial food processing industries. As is now common, after Bettcher filed its infringement lawsuit, Bunzl, the defendant, requested the patent undergo inter partes reexamination at the USPTO. Bunzl asserted the same prior art in both its reexamination request and in its invalidity defense before the district court.

The issue on appeal is the timing of the estoppel provision associated with inter partes reexamination under 35 U.S.C. § 315(c). Under the statute,

"[a] third-party requester whose request for an inter partes reexamination results in a[ reexamination] order … is estopped from asserting at a later time, in any civil action [related to patent law] … the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings.

As I read the statute, a reexamination requester is blocked from making particular invalidity arguments in court if certain conditions are met. These conditions include: (1) a final determination that the reexamined claim is valid; and (2) a finding that the invalidity argument is based on grounds that were or could-have-been raised by the requester during the inter partes reexamination.

In the case at hand, the USPTO had granted Bunzl's reexamination request, but the reexamination examiner had rejected Bunzl's position and issued a right-to-appeal-notice to Bunzl. Bunzl appealed to the BPAI, and recently lost the appeal, but had now requested rehearing by the Board. If Bunzl loses at the BPAI, it has a right to further appeal the reexamination to the Court of Appeals for the Federal Circuit.

In summary, at this point, the USPTO Examiner has made a "final" decisions that the claim is valid, and the BPAI has made a "final" decision that the claim is valid. However, Bunzl still has a right to appeal. The question from those facts is whether the claim is "finally determined to be valid" under the statute.

Deciding the issue, the Federal Circuit held that a claim is not "finally determined to be valid" under Section 315 until all appeals are exhausted.

[T]his court agrees with Bunzl that the estoppel provision of § 315 is triggered not when examination is completed but only after all appeal rights have been exhausted.

On remand, the district court will need to determine whether a new trial is necessitated by the additional prior art made available by the lack of estoppel.

Judge Reyna dissented – arguing that the estoppel issue is moot because the claim is anticipated as a matter of law.

The plain meaning of the claim language of the '325 patent reads on Bettcher's own prior art products, which include all of the structural features required by the claims, and which possess the capability of satisfying the functional or intended use limitations.

. . . .

No reasonable jury could conclude that the claims of the '325 patent were novel over the pre-1998 blades because none of the dispositive facts were disputed and the law is clear. I would reverse the district court and enter judgment as a matter of law of anticipation.

In reaching his outcome, Judge Reyna is finding that, as a matter of law, the wrong conclusion was reached by the trial jury, the district court judge, the original patent examiner, the reexamination examiner, the BPAI, and the other two judges on the court.

Comments by Crouch: This case is in tension with the recent Federal Circuit decision of Marine Polymer Tech. v. Hemcon, Inc. In that case, the court held that non-final arguments made during reexamination created intervening rights that relieved an accused infringer from liability, and that the intervening rights were created at the point of the arguments even though the reexamination was ongoing.

Guest Post: Accelerated Examination and Prioritized Examination

Accelerated Examination, Guest Post, Patent, Patent Legislation

By: Nicholas Witchey, Ph.D.; Robert D. Fish, Esq.; and the Fish & Associates team

Passage of the Leahy-Smith America Invents Act (AIA) includes many changes to U.S. patent law. This article focuses on one change that might be overlooked: Prioritized Examination ("PE") of patent applications. The PE program allows an applicant to pay an additional $4800 fee ($2800 for small entities) to place an application on a prioritized track where the patent office has a goal to provide final disposition of the application (i.e., final rejection or allowance) within a year on average. Interestingly, the AIA retains the Accelerated Examination ("AE") program established on August 26, 2006, as discussed in MPEP 708.02(a). While the PE program prioritizes an application for prosecution ahead of standard filings, the AE program prioritizes and accelerates the actual prosecution of the application. The prioritized examination and accelerated examination programs co-exist as of September 26, 2011.

We recently had a chance to discuss co-existence of the AE and PE programs with Robert W. Bahr, Acting Associate Commissioner for Patent Examination Policy, during a recent MarcusEvans? IP Law Summit in September, 2011. Mr. Bahr stated there are no current plans to make changes to the AE program to align it with the PE program, or vice versa. He sees both programs as viable examination routes for applicants, and that applicants are expected to make a business decision as to which program should be taken. Therefore, it is up to the applicant to work with their patent practitioners on how best to align patent filing tactics with clients' business objectives.

How do these programs compare and which makes the most sense to use? The AE program and PE program are far from identical and have many differences, which gives rise to possible benefits in aligning patent application filing tactics with a client's business strategy.

One of the major differences is that the PE process does not require a pre-examination search document ("PESD") and an accelerated examination support document ("AESD") whereas these documents are required for the AE program to illustrate how the claims of an AE application are allowable over known related art. Preparation of the PESD and AESD documentation requires significant searching and analysis on part of the practitioner. Following the PE program can save an applicant $10,000 or more over the AE program in searching and analysis costs, but that doesn't necessarily mean the total cost is less expensive over a lifetime of an application's prosecution. Within the AE program, the time spent in searching for related art and in improving/focusing the claims tends to yield stronger claim sets, which contributes to faster allowance possibly within months of being accepted into the AE program. Without such thoroughly analyzed claim sets, an applicant could spend $10,000 and many years going back and forth with the examiner to achieve allowance for an application filed within the PE program.

Other than PESD and AESD considerations, the basic requirements for putting an application on file are the same for AE and PE applications, (e.g., formal drawings, no missing part, correct margins, etc.) except that the AE process allows only 3 independent claims and 20 total claims, while the PE process allows 4 independent claims and 30 total claims subject to excess claim fees. In both cases failure to follow the filing rules will result in the petition being dismissed or denied.

There is also a significant difference in fees. The filing fees of an AE application for a large entity are $1380, which includes $130 in petition fees, $1250 in filing fees, plus any excess page size fees. Corresponding small entity filing fees are $660 plus any excess page size fees. In contrast, the filings fees of a PE application for a large entity are $6480, including $4800 in petition fees, $1250 in filing fees, a $130 processing fee, and a $300 publication fee, plus excess claim and page size fees. The corresponding total for a small entity is $3630, plus excess claims and page size fees. From purely a filing fee point of view, the AE program is less expensive. Micro entity discounts do not apply to a PE application petition fee.

Prosecution is also different. AE turnaround is one month on non-final office actions, and failure to meet that strict time requirement results in abandonment of the application. Within the PE program turnaround is the normal three months. The three month deadlines can be extended as usual, but doing so results in the application falling out of the PE program. Applications that have fallen out of the PE program are placed on an examiner's standard docket. Thus, the AE program returns faster results than the PE program, but also has more severe consequences when the response dates are missed.

There are also some inconsistencies in availability of AE and PE applications. For example, one can file a PE application for a plant, while the AE program can not be used for plant patent applications. At least initially, the PE program is also being limited to 10,000 applications per USPTO fiscal year. There doesn't seem to be a formal limit on the number of AE applications, but there have only been an average of about 800 AE applications filed per year so there is little concern with respect to the USPTO limiting AE submissions.

With the introduction of the AE program, the PE program, and other prosecution tracks, the USPTO appears to be developing a full spectrum of possible approaches for prioritizing patent applications rather than a one-size-fits-all approach. Clients can select a style of examination based on their business needs or available budgets. If a cost-effective immediate feedback is required, the PE program might be a proper path for clients wishing to get prosecution started early. If a strategic set of claims are required, the AE program would likely be the best approach for clients wishing to obtain issued claims quickly. We expect the PE program to likely fill their allocated 10,000 applications per fiscal year quickly. In fact, our office has already started filing application with PE petitions. When the allotted yearly slots are taken, the AE program will remain available.

Our office has substantial experience with the AE program, and, although we are strong advocates of the AE program, we believe that PE program also offers other benefits to clients. Clients now have a greater selection of filing options to meet their business goals or filing budgets. A detailed analysis that one would conduct for an AE application would still have merit when filing an application within the PE program. There may even be cases where an applicant might strategically decide to file an application, or a family of applications, in both programs to obtain an optimized result.

The AIA also allows for changes to other prioritized programs including petitions to make special or important technologies, and patent prosecution highways. These programs can also be leveraged to prioritized examination and offer benefits to clients as well. We encourage readers to explore all the programs currently offered or that will be offered over the next 18 months.