September 2017

Prosecution Histories as Prior Art

Perhaps the most debated issue in obviousness disputes is the question of whether a person of ordinary skill in the art would have been motivated to combine prior art references in order to form the invention as claimed. In KSR, the Supreme Court made the process a little bit easier for patent examiners by permitting a common sense analysis. Still, 10 years later, the issue arises on a daily basis for patent attorneys and in the vast majority of obviousness challenges to issued patents.

I have long felt that prosecution history files may serve as key evidence in justifying the motivation to combine. As an example, consider a patent prosecution file history from several years ago that that includes an office action rejection based upon the patent examiners conclusion the two prior art references should be combined. Regardless of whether the examiners assertions were correct at the time, that document seems to be pretty good evidence someone actually considered combining references together.  In general, a prior art statement that expressly suggests and provides reasons for combining Reference A with Reference B is really good evidence for combining the two.

There are several difficulties with my “patent prosecution as prior art” theory.  A first problem is that, although patent prosecution files are open to the public once a patent issues or the application publishes, the prosecution history files are not well indexed or searchable in any meaningful way. As far as I know, there is no publicly accessible database of prosecution history files that is either indexed or searchable.  That problem is becoming a historic problem.

Beginning this week, the USPTO has transitioned its Private Pair system to include text versions of its office action rejections as well as notices of allowances (actual XML and DOCX versions).  It is a straightforward step to move these documents into a searchable database available for public consumption.

I’ll note here that the XML/DOCX files are quite nice and, although not well tagged, will make it easy for patent attorneys to cut & paste from the OA in their responses or client emails. The system also includes a new mechanism for submitting documents to the PTO.

Is the Federal Circuit Under Water?: In re Aqua still Awaiting Decision

As a placeholder – I’ll note here that the pending en banc case of In re Aqua Products regarding amendments during IPR Proceedings is still pending before the Federal Circuit. The court asked two questions:

(a) When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them?  Which burdens are permitted under 35 U.S.C. § 316(e)?

(b) When the petitioner does not challenge the patentability of a proposed amended claim, or the Board thinks the challenge is inadequate, may the Board sua sponte raise patentability challenges to such a claim?  If so, where would the burden of persuasion, or a burden of production, lie?

The en banc order was released in August 2016, and oral arguments heard in December 2016.  The 8-month delay in writing the opinion is unusually long.

In re Aqua: Amending Claims Post Grant in an IPR

In re Aqua: Ambiguity in the Statute Means Deference to the PTO

In re Aqua Products

Lifting the Bar: Federal Circuit finds that the PTAB improperly allowed Amendments during IPR

En Banc Query: Must the PTO Allow Amendments in IPR Proceedings?

 

 

 

 

 

Claiming Said Invention

SaidInventionII

The chart above provides an update to my prior post – looking at patents issued over the past 40 years and finding the proportion of patents that use the word “SAID” within the patent claims.

During this time, there has been a general trend in legal writing toward the use of Plain English rather than legalese, and I believe that the chart here is generally representative of that trend.  Some agencies, such as the SEC, have required the use of plain English in documents submitted for public disclosure. The USPTO has not yet taken that route. However, the USPTO is required to ensure that its own publications are “clear, concise, and well organized.” Plain Writing Act of 2010.

How I describe Said Invention

More on Tribal Immunity: Is a Tribal-Owned Patent Immune from IPR Challenge?

US Law generally holds that Indian Tribes are “Sovereign Powers” that “possess immunity from suit,” although only “to the extent that Congress has not abrogated that immunity and the tribe has not clearly waived its immunity.”  Breakthrough Management Group, Inc. v. Chukchansi Gold Casino and Resort 629 F.3d 1173 (10th Cir. 2010), cert denied.  As the Supreme Court wrote, “without congressional authorization,” the “Indian Nations are exempt from suit.” United States v. United States Fidelity & Guaranty Co., 309 U.S., at 512 (1940).

Questions in patent law remain, primarily: (1) Does the exemption from suit extent to exemption from an administrative action to cancel a tribal owned patent?; and (2) by purchasing a patent does a Tribe implicitly waive sovereign immunity regarding validity challenges to the patent.

In 2006, an en banc Federal Circuit decided the somewhat parallel case of Intel v. CSIRO, holding that the Foreign Sovereign Immunities Act (FSIA) permitted suit against Australia’s national science agency based upon the agency’s commercial activity — attempting to licence its WIFI patents. The Statute provides that:

[a] foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case … in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. . . . Here, we are persuaded that these declaratory-judgment actions are “based on” CSIRO’s commercial acts of obtaining and asserting a United States patent.

My understanding is that FSIA does not apply directly to the Tribal immunity, which is judge-made-law.

 

Did the Abrogation of Form 18 Raise Pleading Standards?

by Dennis Crouch

Lifetime Indus v. Trim-Lok (Fed. Cir. 2017)

The district court dismissed Lifetime’s infringement complaint for failure to state a claim. Fed. R. Civ. Pro. 12(b)(6).  On appeal, the Federal Circuit reversed – holding that the inducement and contributory infringement claims were sufficiently pled.

The most interesting aspect of the decision is actually a bit of dicta regarding the now abrogated Form 18. Prior to December 2015, the Federal Rules of Civil Procedure included a set of Form complaints – the patent complaint (Form 18) was truly bare-bones.  Following Iqbal and Twombly, many of us saw a real tension between the permissible forms and the plausibility requirements of Twiqbal. Thus, when the forms were eliminated in 2015, I assumed that pleading standards had been effectively raised. Here, the Federal Circuit pushes back against that assumption:

The parties assume that there is a difference between the requirements of Form 18 and Iqbal / Twombly; however, we have never recognized such a distinction. See KTech (“That Form 18 would control in the event of a conflict between the form and Twombly and Iqbal does not suggest, however, that we should seek to create a conflict where none exists.”). In any event, we need not resolve the question whether there is a difference between the two standards here because, as we explain, the SAC met the Iqbal / Twombly standard for pleading direct infringement.

When they think you are wrong, double-down.

Lifetime’s U.S. Patent 6,966,590 claims a two-part seal used in RV slide-out rooms.  In 2013, two of Lifetime’s seal-designers left the company and joined Trim-Lok.  Although neither were named inventors on the asserted patent, Lifetime alleged that both had knowledge of the patent.  Although the accused infringer only manufactured only one of two components of the claimed invention, the Federal Circuit ruled that the patentee pled facts sufficient to reasonably infer that an infringing combination was created once installed in a Forest River RV. (Two components: a seal installed on an RV).

US06966590-20051122-D00000

Holdings:

  • Direct Infringement Properly Pled: Lifetime did allege that TrimLok installed the seal onto the RV; that is, Lifetime alleged that Trim-Lok made an infringing seal-RV combination.”
  • Inducement Properly Pled: Alleged prior knowledge of the patent by the two former employees which allows us to presume intent.
  • Contributory Infringement Properly Pled: Knowledge of patent sufficiently alleged.

To be clear, the patentee did not simply allege these conclusively but went well beyond a typical Form-18 complaint to specify:

  • where the alleged infringement occurred (the Forest River plant);
  • when it occurred (in or around June 2013);
  • who performed the allegedly infringing act (an agent or employee of Trim-Lok); and
  • why (to test fit the seal onto the RV and to solicit sales).

These particular factual allegations – according to the court – easily push the complaint over the plausibility threshold.

Dismissal Reversed and remanded – the district court should now pick-up the case again and give the patentee a chance.

 

 

Allergan: Creating Sovereign Immunity with Tribal Pass-Through

by Dennis Crouch

It appears that Allergan’s attorneys have been working overtime.  In a bold move, Allergan has transferred title to all of its Restasis patents to the Saint Regis Mohawk Tribe.  I don’t know if I’m laughing or crying, but there’s not a dry eye in the house.

Image result for Restasis

The move is designed to prop the patents up against challenge via a tribal sovereign immunity claim.   (Several of the transferred patents are being challenged before the PTAB in AIA Trials). Parallel claims have been quite successful for public universities in fending of both IPR and declaratory judgment lawsuits – even when the patents are exclusively licensed to commercial entities.  In fact, this is one reason why public universities almost never sell their patent assets, but instead merely license them.  Of course, a major difference with the university situation is that the university patents are the outcome of original university research.  In Allergan’s case one question will be whether the ownership structure creates a sham that can be pierced as if a fraudulent corporate veil. I’m confident, however, that Allergan’s lawyers worked through the analysis.  One element of the potential sham – the Tribe reports that it is being paid $13.75 million to buy the patents and will receive up to $15 million in annual royalties.

Allergan is a frequent player of jurisdictional games.  Its corporate “headquarters” is in Dublin for the tax benefits, although it is “actually” sited in New Jersey.

Patents involved: United States Patent Nos. 8,629,111; 8,633,162; 8,642,556; 8,648,048; 8,685,930 and 9,248,191.

Functional Limitation Not Inherent, but Still Obvious

by Dennis Crouch

In a new decision, the Federal Circuit has ruled that the PTAB erred in its inherency analysis, but ultimately affirmed the claim cancellation after finding the error harmless. Southwire v. Cerro Wire (Fed. Cir. 2017) [Southwire]

Back in 2012, Cerro Wire filed an inter partes reexamination request against Southwire’s U.S. Patent No. 7,557,301.  The slow process apparent here is one reason why this type of reexamination was phased-out and replaced by the more aggressive AIA-Trials.  With reexaminations, the issued patent is sent first to a patent examiner for consideration with any decision then being appealable to the PTAB and eventually to the Federal Circuit.

The prior art is our primary source of evidence as to whether a patent claims a new invention.  The best evidence comes from express teachings in the prior art.  However, the courts also allow for teachings to be derived from the prior art so long as they are “inherent” within the evidence.

Example: Prior art disclosing a automobile wheel might not expressly state that the wheel is made of molecules, but that teaching would be seen as inherent.  Thus, an invention directed toward a “wheel comprising molecules” would be anticipated by the reference. 

Although inherency is sometimes useful, its scope has been limited by the courts only to cases where the proposed inherent element is “necessarily … present” in the prior art. See PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1194–95 (Fed. Cir. 2014).

Here, the patented method is directed toward making electric cable.  Lubricant is added to reduce friction and allow the wires to be more easily pulled into the sheath.  The claims require that the lubricant result in “at least about a 30% reduction” in pulling force. (Note here that the claim is written in Jepson form.)

WirePuller

In its decision, the PTAB (board) used inherency in a particular way – finding first that it would have been obvious to combine the prior art to use the method described;  and then finding that the 30% reduction would have inherently resulted from the combination.  On appeal, the Federal Circuit rejected that analysis – holding that “the Board cited no evidence that a reduction of 30% in the pulling force would necessarily result from the claimed process, which contains no steps that ensure such reduction.”  Rather, as the patentee argued, the 30% reduction serves as a guide for selecting the particular lubricants and arrangements.

We have an error, but as I mentioned, it turns out to be harmless because the Board “made the necessary underlying factual findings to support an obviousness determination.”

In particular, the prior art teaches the “substantially identical” process as that claimed with no claim element differing “in any material way” from the prior art, and the prior art might have produced the claimed “30% reduction” in pulling force.  Keeping that in mind, the court looked back to the CCPA’s 1977 In re Best holding:

Where, as here, the claimed and prior art products are identical or substantially identical, or are produced by identical or substantially identical processes, the PTO can require an applicant to prove that the prior art products do not necessarily or inherently possess the characteristics of his claimed product.

In re Best, 562 F.2d 1252 (C.C.P.A. 1977). In Best, the court noted that inherency would be properly used in this situation for an anticipation decision, but that for obviousness, the PTO can simply find a prima facie obviousness case.

Cancellation affirmed.

Federal Circuit: Even the Best Secondary Indicia Cannot Overcome this Prima Facie case of Obviousness

In a split opinion, the Federal Circuit has affirmed summary judgment of obviousness in Intercontinenntal Great Brands (Kraft) v. Kellogg (Fed. Cir. 2017). Writing in dissent, Judge Reyna argued that the majority improperly applied a shortcut “prima facie obviousness test” without allowing for a full consideration of the patentee’s objective indicia of non-obviousness that the district court found both substantial and compelling.

The majority opinion, authored by Judge Taranto and joined by Chief Judge Prost begins with a discussion of the resealable cookie package covered by Kraft’s U.S. Patent No. 6,918,532.  Essentially, we have a wet-wipes package for cookies.

US06918532-20050719-D00001

One difference from wet-wipes is that the cookies need a frame to avoid crushing.  The defendants here relied upon a prior art reference showing a rigid re-sealable sushi container (image below).  The container has a tray, and the claimed frame is essentially a tray with higher sides.  When combined with known cookie packaging frames — the district court found that “the only reasonable inference on the record was that a relevant skilled artisan would have been motivated to combine those prior-art references.”

PriorArtCookieBox

In particular, the court noted that the difficulty with opening and closing cookies was well known, and the tray in the Machine Update prior art could simply be replaced with a more complete frame (i.e., a tray with higher sides) to protect the cookies.

In reviewing the lower court decision, the majority wrote:

[T]he court considered the simple and clear teachings of the art, the importance of common sense and ordinary creativity, and the conclusory character of Kraft’s expert’s assertions of nonobviousness.

Despite my love of cookies, I have to admit that I have never purchased one of these re-sealable containers as my preference is to complete a package within a single sitting.  However, the product packaging has apparently met with some amount of commercial success.

Regarding objective indicia of non-obviousness, the district court found it to be highly “substantial” and “compelling” with great commercial success tied to the packaging, industry praise, and copying by the defendant here.  On balance, however, the district court found (on summary judgment) the evidence was insufficient to raise a jury question.

Quite simply, according to the district court, there are some prima facie obviousness cases so strong that they are impossible to overcome even with the best possible secondary indicia of nonobviousness.   On appeal, the majority affirmed this reasoning with a quote from the Supreme Court’s KSR analysis:

Where, as here, the content of the prior art, the scope of the patent claim, and the level of ordinary skill in the art are not in material dispute, and the obviousness of the claim is apparent in light of these factors, summary judgment is appropriate.

KSR v. Teleflex (2007) (note that KSR elsewhere notes the weak objective indicia in that particular dispute).

To be fair, the majority is clear that the ultimate conclusion of obviousness still requires consideration of the objective indicia (even if they could not make a difference).  However, the majority finds that conclusions regarding the evidence – such as a motivation to combine references — may be drawn without consideration of the objective indicia.

Judge Reyna’s dissent goes the other way:

I would find that the district court improperly found a prima facie case of obviousness before considering Kraft’s evidence of objective indicia of nonobviousness. . . . I am left to wonder how “substantial” and “compelling” evidence of objective indicia cannot overcome a prima facie showing. If such significant evidence does not make a difference in this case, it is hard to imagine a situation in which it would.

For many, the problem with Reyna’s dissent is quite simply that it will make summary judgment more difficult — and the conventional wisdom is that winning an obviousness case is extremely difficult before a jury.

The majority-dissent also battle over the ‘correct’ order of consideration of the questions of operation. I’ll save that issue for a separate post.

 

PTO Director (Nominee) Andrei Iancu

Andrei Iancu’s nomination to be the next Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office has now been delivered to the Senate.  The nomination will be considered by the Judiciary Committee with likely confirmation this fall.

At age 49, Mr. Iancu is Managing Partner at Irell & Manella (LA) where he is a patent attorney but these days primarily focuses on intellectual property litigation.

Iancu has participated in a number of Inter Partes Review proceedings – both as petitioner (challenging the patent) and representing the patentee.  He regularly works with Michael Flemming who is of-counsel at Irell and former PTAB Chief Judge.  Iancu has also been part of dozens of patent infringement lawsuits, again representing both patentees and accused infringers.

Iancu is also a prolific author of patent law materials – the following are a few examples:

  • Andrei Iancu, Jeremiah Helm, Code on Disks and Hat Tricks – Is Computer Software on A Medium Really Patentable?, 90 J. Pat. & Trademark Off. Socy. 97, 98 (2008) (“In the absence of legislative changes to what constitutes patentable subject matter, there really is no debate that a claim for software code by itself is not patentable.”)
  • Andrei Iancu, Ben Haber, Post-Issuance Proceedings in the America Invents Act, 93 J. Pat. & Trademark Off. Socy. 476, 486 (2011) (“Congress clearly intends to make the PTO a viable alternative to district court litigation for answering questions of patent validity.”)
  • Andrei Iancu, Michael Fleming, C. Maclain Wells, Indefiniteness in Inter Partes Review Proceedings, 98 J. Pat. & Trademark Off. Socy. 4, 5 (2016) (proposing that the PTAB allow the parties to fully brief indefiniteness issues before the PTAB issues express indefiniteness findings at the IPR initiation stage)
  • Benjamin Hattenbach, Andrei Iancu, Kenneth Weatherwax, Patent Prosecution Pitfalls: Perspectives from the Trenches of Litigation, 92 J. Pat. & Trademark Off. Socy. 340, 341 (2010) (“Those writing patents must recognize the various uncertainties, embrace them, and take steps that will improve the odds of prevailing in litigation in spite of them.”)
  • Andrei Iancu, Jay Chung, Real Reasons the Eastern District of Texas Draws Patent Cases-Beyond Lore and Anecdote, 14 SMU Sci. & Tech. L. Rev. 299, 308 (2011) (“[T]he presence of local patent rules, judges well versed in patent litigation, and a relatively quick docket mean that a patent case can often be resolved more efficiently and effectively in the Eastern District of Texas than in many other districts. Plus, it is more likely that a case will get to the jury in East Texas.”)
  • Andrei Iancu, Ben Haber, Elizabeth Iglesias, Inter Partes Review Is the New Normal: What Has Been Lost? What Has Been Gained?, 40 AIPLA Q.J. 539, 592 (2012) (“Only time will tell whether this is an improvement over the old inter partes reexamination process.”)

It is the first time in a while that we’ve had a PTO director with this level of litigation experience, and it will be interesting to see how that develops in terms of policy goals.

More on Patent Citations and the Impossibility Skew

This post adds somewhat to my prior one titled Citing References.

Citing References

A recent draft article by Professors Jeffrey Kuhn (UNC-Business) and Kenneth Younge (EPFL) along with former USPTO Economist (and former now professor) Alan Marco looks more in-depth at patent citations and arrived at a conclusion parallel to mine:

Specifically, we observe a dramatic increase in the number of citations generated per year and relate that change to a small proportion of patents flooding the patent office with an overwhelming number of references.

Read the article: https://ssrn.com/abstract=2714954.

The paper divides patents four categories according to the quantity of prior art citations.  Rather than call them “quartiles” the authors opt for names that relate to the examiner’s ability to review the corpus of submissions (given their time constraints):

  • 0-20 References – Routine
  • 21-100 References – Difficult
  • 101-250 References – Extreme
  • 251+ References – Impossible

Matching my parallel work, the authors write: “By 2014, patents that cite an “extreme” or “impossible” number of citations are responsible for more than 46% of all patent citations, even though they comprise less than 5% of all patents issued in that year.”  In my data – looking at patents issued Jan-Aug 2017 – I found that the skew has increased so that the “impossible” patents now cite half of all applicant-submitted patent citations.  [Note Here that Kuhn looks at citation of US patent documents only, while my approach considered all citations, but limited them to  those designated as applicant cited.]

Figure 1 from the article provides further information.

KuhnCitations

When focusing on those “impossible” patents, the team concluded that “the citations generated by highly citing patents appear to be particularly uninformative.”  This conclusion is based upon their conclusion that many of the cited references are dissimilar to the claimed invention.

Kuhn, et al., is directed at academic researchers who use patent citation in their empirical research on business and technological trends.  Thus, the conclusions drawn are not designed to either indict or improve the patent system – rather, the primary conclusion is that researchers should consider this skew when making assumptions about the importance of patent citations.  “The main contribution of this article is to provide prima facie evidence that the citation generating process is now generating significant measurement error for many academic studies.”

Gender Analytics: Using Litigation Data to Evaluate Law Firm Diversity  

 Guest Post by By Michael Sander,[1] Tara Klamrowski, and Rachel Sander

Legal analytics can now identify law firms committed to gender diversity by analyzing the gender of attorney appearances. Docket Alarm has done so for the United States Supreme Court and specialized patent courts. The lack of gender diversity is significant, especially in patent cases. Here we highlight firms breaking the mold.

More women are entering the legal profession than ever —women now make up about half of all law students and 36% of all licensed attorneys— but these ratios are not reflected at the highest levels of firm positions. Judges anecdotally report that women rarely act as lead counsel in litigation, and the percentage of female partners at firms hovers around 22%.

Corporate clients are aware of the gender imbalance and actively seek out firms that reflect their own commitment to gender diversity. Clients now regularly request firm diversity statistics as part of law firm pitches, putting pressure on firms to support female attorneys at the highest ranks.

Law firms typically measure diversity by tracking headcount; the number of male and female associates and partners in their ranks. These metrics can ignore the often more meaningful metric of how often female attorneys actually appear in court-room litigation.

How Legal Analytics Can Help Quantify Firm Diversity

Modern legal analytics can play an important role in increasing transparency in law firm gender diversity. Traditional legal analytics show how often parties or law firms win cases, or the likelihood of winning legal relief in front of a particular judge. However, they can also be used to rank and analyze more general litigation trends, including gender diversity.

To identify firms with the most balanced male-female attorney ratio, Docket Alarm scours the litigation record, looking at the names of attorneys and their law firm. The gender of each attorney in a case is identified based on the attorney’s first name and other factors.[2]

The result is that we can now measure firm gender diversity based on attorneys actually staffed on cases, i.e., those that most substantively participate in litigation, not just by firm head-count.

Gender Analytics in the Patent Trial and Appeal Board AIA Trials

The analysis began with the Patent Trial and Appeal Board (“PTAB”), a specialized court focused on patent validity. The analysis shows that patent litigation is dominated by male attorneys. Of the top 100 law firms, 55 have less than 10% female attorneys on cases, and 8 firms have never had a single female attorney work on their PTAB AIA-Trial cases. On average, attorney appearances are only 12% female. When representing patent owners, the percentage of female attorneys drops further to 9.8%.

However, some firms buck the trend. According to Docket Alarm’s statistics, the firms with the highest ratios of female attorneys working on PTAB patent cases are as follows:

Rank Firm Percentage Female
1 Osha Liang 72%
2 Goodwin Proctor 48%
3 Crowell & Moring 47.3%
4 McCarter English 46.7%
5 Arnold & Porter 42%

The “percentage female” here is calculated by dividing the number of female attorney appearances by the number of male and female attorney appearances for each firm.

Other runners up that have at least 25% of their AIA-Trial representations staffed by female attorneys include: Kasha Law; Covington & Burling; Mayer Brown; Drinker Biddle & Reath; Ascenda Law Group; Keker & Van Nest; Ropes & Gray; WilmerHale; and Venable.

The firms listed above, either by chance or design, have far more female attorneys working on cases than the average firm.

PTABGenderDiversity

Fig. 1: Screenshot of Docket Alarm’s Gender Diversity Statistics in the PTAB

 Gender Analytics in the U.S. Supreme Court

Compared to patent law, the male-female gap in Supreme Court practice is less severe, but by no means diverse. For the Supreme Court, Docket Alarm examined petitions for certiorari, analyzing the gender of the attorneys representing certiorari petitioners and respondents. Only two private law firms have half of their attorney appearances staffed by female attorneys, and only 7 have more than 25%. They are as follows:[3]

Rank Firm Percentage Female
1 Dykema Gossett 75%
2 Quinn Emanuel Urquhart & Sullivan 57%
3 Arnold & Porter 35%
4 Morgan, Lewis & Bockius 32.3%
5 Littler Mendelson 32.2%
6 Latham & Watkins 30.0%
7 Hogan Lovells 29.9%

In the rarefied world of Supreme Court practice, having just one or two top female attorneys on the team can make the firm a leader in gender diversity. Jill Wheaton leads Dykema’s Supreme Court practice. At Quinn Emanuel, it is Kathleen Sullivan and Sheila Birnbaum. Similarly, Deanne Maynard and Beth Brinkmann take the majority of cases at MoFo. These firms can attribute their strong diversity numbers to just a few highly specialized attorneys.

Win Rates and Gender Diversity

In addition to identifying the most gender diverse law firms, Docket Alarm’s analytics also show how case success rates are related to gender diverse firms. Docket Alarm found no statistically significant correlation between gender diversity and a firm’s win rate in the PTAB.[4]

PTABGenderDiversityWinRate

Fig. 2: Petitioner Win Rates Plotted Against Gender Diversity in the PTAB

The Future of Diversity Analytics

Now that gender diversity is becoming part of the law firm sales pitch to clients, there is demand to identify firms committed to gender diversity, and for law firms to track diversity recruitment efforts.

Analytics can also identify gender diversity of a particular client’s legal team across law firms. This metric can help clients identify the progress of diversity efforts.

Analytics are leading the way for a new look at diversity in law, one that relies on actual client representation, and not just firm head-count. The initial statistics are not encouraging, especially in patent law, but they highlight firms that are making progress, and provide a baseline to measure future progress for everyone else.

= = = = =

[1] Michael Sander is the founder of Docket Alarm (https://www.docketalarm.com).

[2] Attorneys where the gender cannot be determined due to a gender-neutral first name are not included in the statistics so as to not skew the results one way or another.

[3] The analysis did not consider firms that made fewer than 30 appearances as either a petitioner or respondent in petitions for certiorari since 2000. In an effort to home in on private civil litigation, the analysis disregarded cases filed forma pauperis.

[4] The methodology used a bivariate linear regression model. From a sample of the most active 100 law firms, gender diversity (measured as a percentage of female attorneys at the firm) was regressed on both petition institution as well as claim cancelation. The analysis was run separately for firms representing petitioners and patent owners.

35 U.S.C. 103   CONDITIONS FOR PATENTABILITY; NON-OBVIOUS SUBJECT MATTER.

35 U.S.C. 103 CONDITIONS FOR PATENTABILITY; NON-OBVIOUS SUBJECT MATTER.

A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.

Patentability shall not be negated by the manner in which the invention was made.

37 C.F.R. § 1.75(e), Jepson claims, and the Administrative Procedure Act

By David Boundy

The following is a guest post by David Boundy – a Cambridge Massachusetts attorney with a specialty at the intersection of patent and administrative law. In 2007-09, David led the teams that quashed the Continuations, 5/25 Claims, IDS, Markush, and appeal rules under the Paperwork Reduction Act.

This is a follow-up to Dennis’s two posts on Jepson claims, of Sept 1, 2017 and Aug. 30, 2017.

Wherein the Improvement Comprises

Jepson Claims (Part II)

37 C.F.R. § 1.75(e), recommending that applicants “should” use Jepson form, is a classic case of a “general statement of policy” under the Administrative Procedure Act, 5 U.S.C. § 553(b)(A).  It’s only hortatory, with no force of law.  The PTO did exactly the right thing, stating that its preference is non-binding, by using the word “should.”  Patent attorneys do exactly the right thing in recognizing the multiple substantive perils of Jepson claims, and ignoring § 1.75(e).

The point that controls everything else is that the PTO has no relevant substantive rule making authority, and therefore has no power to dictate any matter of claim form that might have substantive consequences.  The PTO is permitted to announce any preference it likes on issues of claim drafting, and can even alert the public that life is easier for the PTO if applicants follow this preference for Jepson form.  But the PTO has no authority to require any claim drafting technique that has substantive impact.

Because this is an issue where the PTO has no rule making authority, § 1.75(e) could not be promulgated as a “must” binding regulation.  To bind the public with force of law, an agency must have authority for the particular rule, and follow Congress’ procedures for promulgating it (35 U.S.C. § 2(b)(2)(B), the Administrative Procedure Act, Paperwork Reduction Act, Regulatory Flexibility Act, Executive Order 12,866, and all the rest).  So even though the PTO jumped all the procedural hoops and ended up with something that looks facially like a “regulation” in CFR (rather than in guidance), without authority, that regulation has no force of law (and would not, even if § 1.75(e) had used the word “must”).

The Administrative Procedure Act, § 553(b)(A), creates a pigeonhole for this kind of expression of agency preference, called a “general statement of policy.”  (I wrote about “policy statements” earlier this summer.)  “General statements of policy” are often used by an agency to offer helpful suggestions (at least suggestions that the agency thinks might be helpful to it).  But conversely, “policy statements” are purely hortatory, with no binding effect against the public.  That’s exactly what the PTO did here, using the word “should” in § 1.75(e) to indicate a non-binding preference, rather than “must” to indicate a requirement.

Legality of the Matal Appointment: Acting As PTO Director

“Policy statements” are also used to unilaterally promise a quid pro quo or set a floor (“If you the public do x, we the agency promise favorable outcome y.  If you don’t do x, you can still convince us to do y if you convince us under the controlling law.”)  Such quid pro quo policy statements bind the agency to give favorable action y for any member of the public that relies on x, but impose no binding requirement on the public to do x.  Here, the PTO made no promise of any favorable result that would occur if an applicant uses Jepson form, so § 1.75(e) signifies nothing—and does it without sound and fury.

When the PTO has preferences of this sort, there is no requirement to put them in CFR regulations—§ 553(b)(A) expressly exempts “statements of policy” from any requirement to be stated in regulation.  (They still have to be published, § 552(a)(1)(B), but need not be baked into CFR and notice-and-comment.)  The PTO’s preference for Jepson claims could just as well have been in a guidance document like the MPEP.  There’s no error or harm in putting a “should” policy statement in a regulation rather than guidance, but no requirement either.

The only ethical principle for patent attorneys that I see, in absence of force of law, is to avoid doing dumb stuff that hurts the client.  Patent attorneys have ethical obligations to their clients to avoid all the substantive pitfalls of Jepson claims.  I see no “ethical guideline” that would pull in the direction of § 1.75(e)—though of course I’d love to learn something new, and I look forward to the comments.

Two meanders on a rainy Labor Day weekend that were prompted by looking at  § 1.75(e)—

First—

37 C.F.R. § 1.75(d)(1) says “ terms and phrases used in the claims must find clear support or antecedent basis in the description.”  There are multiple drafting errors here, and the PTO should correct them.

(a)  There is no requirement whatsoever for “antecedent basis” agreement between the spec and claims.  Sure, § 1.75(d)(1) blurs the “must” requirement by adding an alternative, “clear support or antecedent basis,” but the Paperwork Reduction Act requires that regulations be “written using plain, coherent, and unambiguous terminology.”  Agencies are not permitted to waste the public’s time by tossing red herrings and irrelevancies into their regulations and leaving it to the public to decipher the agency’s sleight of hand (or spend hours over the years pointing examiners to the word “or” that so many overlook).

(b) § 112(b) permits “written description” and enablement support to be drawn from the drawings as well as the specification.  A rule that says it “must” be in the “description” is at the best unclear, and at worst over-prescriptive.

I get it, it’s easier for the PTO to examine an application when the claims and specification use the same terms.  But the PTO has no authority to put that preference in a “must” regulation.

Second—

The “single sentence rule” of MPEP § 608.01(m), affirmed by the D.C. District Court in Fressola v. Manbeck, 36 USPQ2d 1211 (D.D.C. 1995), stands on flimsy ground, though I’m not sure which way a better-argued case under today’s law would come out.

The D.C. District Court noted that claims can be drafted in single sentences or multiple, as only a matter of form, with no substantive effect, and the rule is thus “procedural” and not subject to requirements for notice and comment.  Even assuming that the Court’s characterization as “procedural” is correct, it doesn’t answer the question—the APA’s §§ 552 and 553 set procedural requirements for any rule that an agency wants to promulgate with binding effect, even procedural rules, and the MPEP doesn’t qualify and never did (an administrative law point that Fressola didn’t argue).  Today’s 35 U.S.C. § 2(b)(2) is even clearer, requiring § 553 “regulations” for procedural rules, and forbidding the PTO’s practice of promulgating procedural requirements in guidance.  Further, the language of today’s § 2(b)(2)(B) (especially when contrasted to pre-1999 § 6) is similar to the language in other statutes for other agencies, and the agencies accept that the language means they “must” use notice and comment.  See, e.g., Department of State, Notice of Proposed Rulemaking, 64 Fed. Reg. 53632 (Oct 4, 1999) (“Pursuant to [9 U.S.C. § 553], the rulemaking procedures of [5 U.S.C. § 553] apply to any determination to effectuate such a modification or amendment [of the Department’s procedural rules for international arbitration]. In accordance with those procedures, notice must be published in the Federal Register, time for comment provided, and the final rule published for 30 days before the rule may become effective.”).

The Fressola court stated (citing Chevron) “the Plaintiff must nonetheless overcome a quite deferential standard of review in order to justify the invalidation of a portion of the MPEP by a reviewing court.”  Nonsense.  That kind of deference only applies to interpretations (not rules cut out of whole cloth, like the single sentence rule), issued in a reasonably formal form published to the regulated public (not squirreled away in guidance directed to agency employees).  Subsequent developments in the Chevron administrative law space (specifically Mead and Christensen) make even clearer that informal guidance is not entitled to high deference.   An agency only gets that kind of deference after it earns it by jumping several hoops of formality for its interpretation.

The reasoning of Fressola is a terribly confused mish-mash of incompatible legal principles (see my upcoming article in ABA Landslide, later this fall, which provides a helpful taxonomy of rules).  The single sentence rule and Fressola have been entirely undercut by developments since 1995.  (The continuing vitality of Ex parte Quayle practice also comes to mind.)

But at the end of the day, the “single sentence” rule could squeak through a challenge, under the administrative law standing principles of “suffering legal wrong” and “harmless error”—even Fressola admitted that his single-sentence claims suffered no substantive disadvantage relative to his multi-sentence claims.

Citing References

For patents issued thus far in 2017, the average patent lists 44 references submitted by the patent applicant for the examiner to consider. The median patent, however, only has 10 applicant cited references.  The gulf between the mean and median is the result in skew in the dataset — here caused by a fairly small percentage of patents that cite a disproportionately large number of references.  Thus, if you pick a few patents at random, about half of them will have <10 references cited by the applicant.  Every once in a while, though, you’ll come across a big papi – see, for example U.S. Patent No. 9,535,563 and its 7,800 references cited by the applicant (inventor-patent attorney Steven Hoffberg).  At the other end of the spectrum, about 12% of applicants cite no prior art at all — this is down from about 20% in 2005.

One way to think about the skew is to look patents where applicants submit cite 250+ references — that represents about 3.5% of patents issued in 2017 thus far (though only 0.5% of patents issued in 2005).  Those 3.5% of issued patents account for half of the prior art submitted to the PTO.

To be clear – I’m not demonizing patentees who submit lots of references.  What I’m working toward is whether the large number of references creates any special difficulty or benefits for the examination process and whether examiners receive any special assistance in considering the large number of references submitted.

I think the chart below is interesting. I took the 2017 patents and grouped them in quintiles according to the number of references cited.  For each quartile, I then found the average pendency (in months) for the issued patents.  The results are clear – patents with more citations correlate with longer pendency.  (Note that the auto-created axis does not reach ZERO – this makes the slope appear more dramatic than reality).  Obviously we should be a bit cautious in interpreting this chart as suggesting a causal role.

ReferencesCitedQuint

 

 

 

En Banc: Construing Claims

by Dennis Crouch

Over the past several of years, the court has appeared to be increasingly divided on the question of when a district court (or PTAB judge) must offer an express construction of beyond simply assigning a claim its “plain and ordinary meaning” without further definition.  In NobelBiz v. Global Connect, the Federal Circuit ruled that disputed claims must be construed (despite some precedent to the contrary).  That result means that NobelBiz’s jury win is vacated and remanded.

Please Define What you Mean by Ordinary Meaning

Now in its en banc filing, the patentee has asked three questions:

  1. May a district court ever assign a “plain and ordinary meaning” construction? Or is an express construction required whenever a litigant asserts an O2 Micro “dispute,” as dictated by NobelBiz and Eon?
  2. May the Federal Circuit narrow claim scope without finding lexicography or prosecution disclaimer, by parsing the intrinsic record and relying on “extra-record extrinsic evidence,” as occurred in NobelBiz?
  3. May a district court refer the question of infringement to a jury when claim terms are assigned their plain and ordinary meaning?

The briefing is well done and does good job of highlighting the distinct approaches by the various Federal Circuit judges.  Even if they disagree on the appropriate rule, all of the Federal Circuit judges should agree that this is an issue that needs resolution.

[Panel Opinion with Newman Dissent][Petition for Rehearing En Banc]

More Briefs in Support of ending IPRs

Oil States v. Greene’s Energy (Supreme Court 2017)

Briefing continues in the Oil States constitutional challenge to the IPR System.  Amicus briefs supporting either the petitioner or neither party were due August 31 with at least 31 filings –  Respondents’ brief (both Greene’s Energy and USPTO) will be due October 23 with supporting amicus shortly thereafter.

I have not reviewed all of these these briefs, yet, but have a few notes above.  As expected, the vast majority of these top-side briefs support the petitioner. I have highlighted above the few briefs, including that by AIPLA, that support keeping the current system.

Jepson Claims (Part II)

by Dennis Crouch

In an earlier post, I wrote about the Code of Federal Regulations’ requirement that patent claims “should” be drafted in Jepson form. 37 C.F.R. 1.75(e).  This claim structure uses the preamble to particularly identify the elements of the invention known in the art with the body simply reciting the “portion of the claimed combination which the applicant considers as the new or improved portion.”  In my view, Jespon claims are so nice to read because they actually spell out what has been improved by the invention.  Unfortunately, they also are seen as increasing the chance that the patent will be both narrowly interpreted and found invalid – and that the statement regarding the prior art will be seen as an admission.  For much these same reasons, most patents no longer particularly identify their “invention” beyond stating that it is embodied by each claim taken as a whole.  Prof. Kayton, who trained generations of patent attorneys in his PRG classes was particularly adamant about avoiding Jepson claims.

Gene Quinn on his blog writes “No patent attorney in their right mind would follow this suggestion.” (referring to Rule 1.75(e)).  While I largely agree that Jepson claims are problematic for the reasons stated above – I would caution patent attorneys to ensure that their ethical guidelines are being met.  In particular, when the law says that attorneys “should” do something, it seems improper to entirely ignore the law’s suggestion. Rather, the patent attorney should consider – as stated in the Rule – whether “the nature of the case admits” such a claim form.  An additional ethical trick when thinking through this is to consider whether a family-member patent claim has already been (or will be) filed in a separate jurisdiction that requires this form.

 

In a 2009 post, Aaron Feigelson reported some interesting data on the use of Jepson claims in the US.  Essentially that its use had dropped tremendously as shown by Feigelson’s chart below (reproduced with permission).

Jepsonpercent

Feigelson’s data just ran through 2009 and may actually overstate the prevalence of Jepson claims because he includes any patent with the word “improvement” in the claim. I just updated the data up through 2017 with the chart shown below – looking for patents having at least one claim with the following phrase “the improvement compris.”  As you can see, less than 1 out of every 1,000 newly issued patents is in this claim form. JepsonPerYear

The most recent patent with a Jepson claim is U.S. Patent No. 9,744,559 covers the use of nanoparticle materials for “high contrast surface marking,” and is only found in Claim 24.

24. In a thermally activated, chemically based marking method comprising the steps of:

applying a layer of a marking composition to the surface of a substrate and irradiating said layer with radiant energy which is absorbed by at least one component of said marking composition,

the improvement comprising the use of marking compositions comprising amounts of at least one pigment encapsulated in silica nanoparticles and further comprising nanoparticles of materials selected from the group consisting of silica, metal oxides and metal compounds comprising at least one of tungsten, molybdenum and chromium, and combinations thereof,

wherein these materials are all colloidally suspended in a liquid comprising aqueous and/or organic solvents, said amounts being sufficient to produce a marking layer atop said substrate having improved properties including at least one of stronger bonds, better color properties, and finishes smooth enough not to retain bacteria.