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Can you Wait 20-Years to Challenge Inventorship?: In this case, Yes

Patent,

by Dennis Crouch

Pei-Herng Hor and Ruling Meng v. Ching-Wu "Paul" Chu (Fed. Cir. 2012)

Sometimes I'm surprised that there are not more inventorship disputes. But, the rise in power of HR managers in most corporate settings has helped to lock-down rights through initial employment or consulting contracts. On the other hand, the loose liberalism of the university setting continues to create problems on this front. One element that adds complexity for universities is that, in most cases, universities provide a percentage of any patent-related revenue to the inventors – in this case 50%. For the most part, major US corporations do not use that approach.

This dispute stems from the work of award winning and highly regarded University of Houston Professor Paul Chu. The superconductor innovator (Chu) is listed as the sole inventor of U.S. Patent Nos. 7,056,866 and 7,709,418, but his former assistants (Hor and Ming) argue that they should also be listed as co-inventors. The original applications were filed in 1987 and 1989 and did not issue until 2006 and 2010 respectively. The bulk of the long prosecution was occupied by an interference proceeding in the '418 case that was eventually resolved in Chu's favor. During that time, the original application was also put on hold pending the outcome. The interference was prompted by a former Chu lab assistant who had by then moved to the University of Alabama.

The patents cover a super-conducting material that does not require liquid nitrogen coolant. So far, the patents have netted $680,000 based upon a DuPont option on the patent. UH gave half of that money to Chu who, in turn, distributed about $140,000 to the lab assistants, including Hor, Meng, and the Alabama Elephant. Apparently those few thousand dollars were not enough.

= = = = =

35 U.S.C. §256 implicitly provides the basis for a federal court action to correct the inventor inventorship. Hor filed his complaint in 2008 and Meng joined the action in 2010. However, the district court dismissed the case as barred by laches since those parties should have known for a long time that they were not named inventors on the patent application.

On appeal, the Federal Circuit has rejected the lower court's decision on laches – holding that the period for laches for a section 256 inventorship action cannot begin to run until the patent-in-question actually issues even if "the omitted inventors knew or should have known prior to patent issuance that their names were omitted."

The lower court also held that the action was barred by equitable estoppel. On appeal, the Federal Circuit also rejected the equitable estoppel claim because it had been raised sua sponte by the lower court and without notice to the parties. On remand, the court will need to more fully develop the law of equitable estoppel as it relates to this dispute – of interest will be whether the court applies Texas law of equitable estoppel or else some federal patent law version of the doctrine.

= = = = =

The majority decision was written by Judge Prost and joined by Judge Newman. Judge Reyna wrote a concurring opinion that agrees with the statutory interpretation of Section 256 but argues that the statute is poorly drafted. Judge Reyna argues that a better approach would encourage the alleged co-inventors to take action under Section 116 to correct the inventorship during prosecution of the application. The weight of Judge Reyna's argument may well be determined based upon how the lower court rules on the equitable estoppel claim and whether that doctrine serves as a sufficient substitute for laches.

= = = = =

We have had something of a shift in the culture of inventorship in the 25 years since Chu filed his original application in 1987. Back then, the vast majority of patent applicants listed only one inventor as "the inventor." Today, most new applications at least two inventors. And, in highly-scientific fields such as Dr. Chu's, the number of inventors-per-application is even higher. A key question to be discerned is whether the difference between then and now reflects differences in the process of inventing or rather does it reflect a difference in how we identify inventors. If filing his Reardon metal patent today, perhaps Hank Rearden would have included co-inventors. One element of American ethos is steeped in the idea and ideal of rugged individualism. As President Obama's recent public statements to the contrary are absorbed into our culture, I expect that our notion of inventorship will continue to shift as well.

Patently-O Bits & Bytes by Lawrence Higgins

Patent, ,

Chisum Patent Academy

  • The Chisum Patent Academy will hold its next Advanced Patent Law seminar February 20-22, 2013, in New York City (Midtown Manhattan). Because each three-day Chisum Patent Academy seminar is uniquely limited to ten (10) participants, they offer an unparalleled opportunity for interactive roundtable discussion and debate. Each seminar is led by patent law educators and treatise authors Donald Chisum and Janice Mueller. The New York seminar will focus in great depth on two timely and controversial patent law topics: patent claim interpretation and active inducement. They will also cover America Invents Act developments including the USPTO's final rules on first inventor to file (taking effect three weeks after the New York seminar); preliminary injunctions and design patents; and inequitable conduct decisions post-Therasense. A more detailed description of the topics to be covered and registration details are available on the Academy's website. [Link]

New start-up company (Evtron)

  • Evtron is a new start-up company that specializes in data storage. The company made a storage device (Evtron CELL) that can fit 120 hard disk drives into a storage platform. The design created by Evtron will supposedly make it 60% more efficient in data density, when compared to similar data storage products currently available on the market. NetApp and EMC are the two leading companies in this technology market, with annual revenue between $7 billion and $22 billion. Evtron may be able to compete with these companies but only if they are granted their pending patent and the patent cannot be worked around. The patent application to my knowledge is not currently public. There have been rumors that Facebook may be interested in the technology. This should be a very interesting company to watch, in terms of the patent application, lawsuits that may arise, and the change of the data storage space.

Patent Jobs:

  • Fenwick & West is seeking patent associates with 1-4 years of experience and an EE, CS, CE, or physics background, or equivalent experience to work at their Silicon Valley office. [Link]
  • Armstrong Teasdale is looking for an experienced trademark associate to work at their St. Louis office. [Link]
  • Harrington & Smith is seeking a patent associate with a degree in EE or physics and at least 2 years of experience to work at their Shelton, Connecticut office. [Link]
  • Krieg DeVault is looking for an IP associate with 3-7 years of experience to work at their Indianapolis office. [Link]
  • Harrity & Harrity is searching for patent attorneys/agents with a background in EE, computer science, or physics and a minimum of 2 years of experience to work at their Fairfax, VA office. [Link]
  • Honigman is seeking a patent attorney/agent with a degree in EE or computer science to work at their Oakland Count, Michigan office. [Link]
  • Byrne Poh is looking for a patent attorney/agent with a degree in EE or computer science to work at their New York office. [Link]
  • The Ollila Law Group is seeking a patent attorney with an EE and at least 2 years of experience to work at their Boulder office. [Link]
  • Abel Law Group is seeking a chemical practitioner with 2+ years of experience to work at their Austin office. [Link]
  • Klarquist Sparkman is seeking an IP Litigation Associate with 1-2 years of experience to work at their Portland office. [Link]

Upcoming Events:

  • Santa Clara Law will be hosting its conference Solutions to the Patent Problem this Friday, November 16, featuring industry and government folks such as Kent Walker (Google), Brad Burnham (USVentures), Ben Lee (Twitter), Edith Ramirez (FTC), and Paul Grewal (N.D. Cal) in addition to about 20 academics. The event will be streamed and Wired is running opeds from the conference as part of its Patent Fix series.
  • IBC Legal's 6th Annual Standards and Patents Conference 2012 will be held on November 27-28 in London. The dynamics of the relationship between standards and patents poses a plethora of challenges for patentees, licensees, standard setting organizations, innovators, commercial users and implementers. Guest speakers include Mr. Justice Ford (Jude, Patent Court) and Richard Vary. [Link] (PatentlyO readers save 10% by quoting VIP code: FKW82336PTOL)
  • ACI's 14th Advanced Forum on Biotech Patents will be held on November 28-29, in Boston. ACI's 14th Advanced Forum on Biotech Patents brings together another top-notch faculty of expert biotech patent practitioners who will share their experience and knowledge to help you avoid pitfalls and maximize the value of your intellectual property. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • The ACI's Orphan Drugs and Rare Diseases conference will take place on November 28-29 in Boston. There are an estimated 6,000 rare diseases currently recognized in the U.S. alone; European authorities recognize as many as 8,000 rare diseases. With only approximately 150 treatments for these diseases approved so far according to the FDA's orphan designation database, there is a unique opportunity for companies of all sizes to invest in research and development to try to capture this lucrative market share. Indeed, according to a leading industry report, the orphan disease therapeutics market will continue to see a marked increase in value through the decade, increasing from 2010's $2.3 billion to an estimated $6 billion in 2018. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • ACI's Paragraph IV Disputes conference will be held on December 4-5 in San Francisco. An experienced faculty of renowned litigators and judges will guide you through every stage of a Paragraph IV challenge. Additionally, in the wake of major developments in pay-for –delay, learn what the FTC deems foul and fair in the settlements of Paragraph IV disputes in order to draft and structure settlements that will receive FTC approval. [Link] (PatentlyO readers use code PO 200 a discount)
  • C5's 5th Annual Forum on Biotech and Pharma Patent Litigation is scheduled for January 29-30 in Amsterdam. [Link] (PatentlyO readers use code PO10 for a 10% discount)

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

Patently-O Bits & Bytes by Lawrence Higgins

Patent, ,

Chisum Patent Academy

  • The Chisum Patent Academy will hold its next Advanced Patent Law seminar February 20-22, 2013, in New York City (Midtown Manhattan). Because each three-day Chisum Patent Academy seminar is uniquely limited to ten (10) participants, they offer an unparalleled opportunity for interactive roundtable discussion and debate. Each seminar is led by patent law educators and treatise authors Donald Chisum and Janice Mueller. The New York seminar will focus in great depth on two timely and controversial patent law topics: patent claim interpretation and active inducement. They will also cover America Invents Act developments including the USPTO's final rules on first inventor to file (taking effect three weeks after the New York seminar); preliminary injunctions and design patents; and inequitable conduct decisions post-Therasense. A more detailed description of the topics to be covered and registration details are available on the Academy's website. [Link]

New start-up company (Evtron)

  • Evtron is a new start-up company that specializes in data storage. The company made a storage device (Evtron CELL) that can fit 120 hard disk drives into a storage platform. The design created by Evtron will supposedly make it 60% more efficient in data density, when compared to similar data storage products currently available on the market. NetApp and EMC are the two leading companies in this technology market, with annual revenue between $7 billion and $22 billion. Evtron may be able to compete with these companies but only if they are granted their pending patent and the patent cannot be worked around. The patent application to my knowledge is not currently public. There have been rumors that Facebook may be interested in the technology. This should be a very interesting company to watch, in terms of the patent application, lawsuits that may arise, and the change of the data storage space.

Patent Jobs:

  • Fenwick & West is seeking patent associates with 1-4 years of experience and an EE, CS, CE, or physics background, or equivalent experience to work at their Silicon Valley office. [Link]
  • Armstrong Teasdale is looking for an experienced trademark associate to work at their St. Louis office. [Link]
  • Harrington & Smith is seeking a patent associate with a degree in EE or physics and at least 2 years of experience to work at their Shelton, Connecticut office. [Link]
  • Krieg DeVault is looking for an IP associate with 3-7 years of experience to work at their Indianapolis office. [Link]
  • Harrity & Harrity is searching for patent attorneys/agents with a background in EE, computer science, or physics and a minimum of 2 years of experience to work at their Fairfax, VA office. [Link]
  • Honigman is seeking a patent attorney/agent with a degree in EE or computer science to work at their Oakland Count, Michigan office. [Link]
  • Byrne Poh is looking for a patent attorney/agent with a degree in EE or computer science to work at their New York office. [Link]
  • The Ollila Law Group is seeking a patent attorney with an EE and at least 2 years of experience to work at their Boulder office. [Link]
  • Abel Law Group is seeking a chemical practitioner with 2+ years of experience to work at their Austin office. [Link]
  • Klarquist Sparkman is seeking an IP Litigation Associate with 1-2 years of experience to work at their Portland office. [Link]

Upcoming Events:

  • Santa Clara Law will be hosting its conference Solutions to the Patent Problem this Friday, November 16, featuring industry and government folks such as Kent Walker (Google), Brad Burnham (USVentures), Ben Lee (Twitter), Edith Ramirez (FTC), and Paul Grewal (N.D. Cal) in addition to about 20 academics. The event will be streamed and Wired is running opeds from the conference as part of its Patent Fix series.
  • IBC Legal's 6th Annual Standards and Patents Conference 2012 will be held on November 27-28 in London. The dynamics of the relationship between standards and patents poses a plethora of challenges for patentees, licensees, standard setting organizations, innovators, commercial users and implementers. Guest speakers include Mr. Justice Ford (Jude, Patent Court) and Richard Vary. [Link] (PatentlyO readers save 10% by quoting VIP code: FKW82336PTOL)
  • ACI's 14th Advanced Forum on Biotech Patents will be held on November 28-29, in Boston. ACI's 14th Advanced Forum on Biotech Patents brings together another top-notch faculty of expert biotech patent practitioners who will share their experience and knowledge to help you avoid pitfalls and maximize the value of your intellectual property. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • The ACI's Orphan Drugs and Rare Diseases conference will take place on November 28-29 in Boston. There are an estimated 6,000 rare diseases currently recognized in the U.S. alone; European authorities recognize as many as 8,000 rare diseases. With only approximately 150 treatments for these diseases approved so far according to the FDA's orphan designation database, there is a unique opportunity for companies of all sizes to invest in research and development to try to capture this lucrative market share. Indeed, according to a leading industry report, the orphan disease therapeutics market will continue to see a marked increase in value through the decade, increasing from 2010's $2.3 billion to an estimated $6 billion in 2018. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • ACI's Paragraph IV Disputes conference will be held on December 4-5 in San Francisco. An experienced faculty of renowned litigators and judges will guide you through every stage of a Paragraph IV challenge. Additionally, in the wake of major developments in pay-for –delay, learn what the FTC deems foul and fair in the settlements of Paragraph IV disputes in order to draft and structure settlements that will receive FTC approval. [Link] (PatentlyO readers use code PO 200 a discount)
  • C5's 5th Annual Forum on Biotech and Pharma Patent Litigation is scheduled for January 29-30 in Amsterdam. [Link] (PatentlyO readers use code PO10 for a 10% discount)

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

Patently-O Bits & Bytes by Lawrence Higgins

Patent, ,

Chisum Patent Academy

  • The Chisum Patent Academy will hold its next Advanced Patent Law seminar February 20-22, 2013, in New York City (Midtown Manhattan). Because each three-day Chisum Patent Academy seminar is uniquely limited to ten (10) participants, they offer an unparalleled opportunity for interactive roundtable discussion and debate. Each seminar is led by patent law educators and treatise authors Donald Chisum and Janice Mueller. The New York seminar will focus in great depth on two timely and controversial patent law topics: patent claim interpretation and active inducement. They will also cover America Invents Act developments including the USPTO's final rules on first inventor to file (taking effect three weeks after the New York seminar); preliminary injunctions and design patents; and inequitable conduct decisions post-Therasense. A more detailed description of the topics to be covered and registration details are available on the Academy's website. [Link]

New start-up company (Evtron)

  • Evtron is a new start-up company that specializes in data storage. The company made a storage device (Evtron CELL) that can fit 120 hard disk drives into a storage platform. The design created by Evtron will supposedly make it 60% more efficient in data density, when compared to similar data storage products currently available on the market. NetApp and EMC are the two leading companies in this technology market, with annual revenue between $7 billion and $22 billion. Evtron may be able to compete with these companies but only if they are granted their pending patent and the patent cannot be worked around. The patent application to my knowledge is not currently public. There have been rumors that Facebook may be interested in the technology. This should be a very interesting company to watch, in terms of the patent application, lawsuits that may arise, and the change of the data storage space.

Patent Jobs:

  • Fenwick & West is seeking patent associates with 1-4 years of experience and an EE, CS, CE, or physics background, or equivalent experience to work at their Silicon Valley office. [Link]
  • Armstrong Teasdale is looking for an experienced trademark associate to work at their St. Louis office. [Link]
  • Harrington & Smith is seeking a patent associate with a degree in EE or physics and at least 2 years of experience to work at their Shelton, Connecticut office. [Link]
  • Krieg DeVault is looking for an IP associate with 3-7 years of experience to work at their Indianapolis office. [Link]
  • Harrity & Harrity is searching for patent attorneys/agents with a background in EE, computer science, or physics and a minimum of 2 years of experience to work at their Fairfax, VA office. [Link]
  • Honigman is seeking a patent attorney/agent with a degree in EE or computer science to work at their Oakland Count, Michigan office. [Link]
  • Byrne Poh is looking for a patent attorney/agent with a degree in EE or computer science to work at their New York office. [Link]
  • The Ollila Law Group is seeking a patent attorney with an EE and at least 2 years of experience to work at their Boulder office. [Link]
  • Abel Law Group is seeking a chemical practitioner with 2+ years of experience to work at their Austin office. [Link]
  • Klarquist Sparkman is seeking an IP Litigation Associate with 1-2 years of experience to work at their Portland office. [Link]

Upcoming Events:

  • Santa Clara Law will be hosting its conference Solutions to the Patent Problem this Friday, November 16, featuring industry and government folks such as Kent Walker (Google), Brad Burnham (USVentures), Ben Lee (Twitter), Edith Ramirez (FTC), and Paul Grewal (N.D. Cal) in addition to about 20 academics. The event will be streamed and Wired is running opeds from the conference as part of its Patent Fix series.
  • IBC Legal's 6th Annual Standards and Patents Conference 2012 will be held on November 27-28 in London. The dynamics of the relationship between standards and patents poses a plethora of challenges for patentees, licensees, standard setting organizations, innovators, commercial users and implementers. Guest speakers include Mr. Justice Ford (Jude, Patent Court) and Richard Vary. [Link] (PatentlyO readers save 10% by quoting VIP code: FKW82336PTOL)
  • ACI's 14th Advanced Forum on Biotech Patents will be held on November 28-29, in Boston. ACI's 14th Advanced Forum on Biotech Patents brings together another top-notch faculty of expert biotech patent practitioners who will share their experience and knowledge to help you avoid pitfalls and maximize the value of your intellectual property. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • The ACI's Orphan Drugs and Rare Diseases conference will take place on November 28-29 in Boston. There are an estimated 6,000 rare diseases currently recognized in the U.S. alone; European authorities recognize as many as 8,000 rare diseases. With only approximately 150 treatments for these diseases approved so far according to the FDA's orphan designation database, there is a unique opportunity for companies of all sizes to invest in research and development to try to capture this lucrative market share. Indeed, according to a leading industry report, the orphan disease therapeutics market will continue to see a marked increase in value through the decade, increasing from 2010's $2.3 billion to an estimated $6 billion in 2018. [Link] (PatentlyO readers register for with PO 200 for a discount)
  • ACI's Paragraph IV Disputes conference will be held on December 4-5 in San Francisco. An experienced faculty of renowned litigators and judges will guide you through every stage of a Paragraph IV challenge. Additionally, in the wake of major developments in pay-for –delay, learn what the FTC deems foul and fair in the settlements of Paragraph IV disputes in order to draft and structure settlements that will receive FTC approval. [Link] (PatentlyO readers use code PO 200 a discount)
  • C5's 5th Annual Forum on Biotech and Pharma Patent Litigation is scheduled for January 29-30 in Amsterdam. [Link] (PatentlyO readers use code PO10 for a 10% discount)

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

Linking Pigs and Humans through the Enablement Doctrine

Patent,

By Dennis Crouch

Edwards Lifesciences AG v. CoreValve, Inc. (Fed. Cir 2012)

In an opinion by Judge Newman, the Federal Circuit has sided with the patentee – rejecting the challenger’s argument that the patent lacked an enabling disclosure under 35 U.S.C. § 112(1). The claims (and accused infringer activity) are all seemingly focused on using the claimed cardiac valve prosthesis in a human. However, at the time of the patent application, the invention had only been tested in a pig and the human link in the specification was only the statement that “the cardiac valve prosthesis for use in human beings has a corresponding form.” (In its brief, CoreValue also notes that none of the pigs survived more than five hours.). See U.S. Patent No. 5,411,552. The real question was whether the conversion to a human prosthesis would require undue experimentation. If not, then the specification is sufficient.

The court writes:

CoreValve [the accused infringer] argues that in no event does testing in pigs enable use in humans. However, it has long been recognized that when experimentation on human subjects is inappropriate, as in the testing and development of drugs and medical devices, the enablement requirement may be met by animal tests or in vitro data. See MPEP §2164.02 (“An in vitro or in vivo animal model example in the specification, in effect, constitutes a ‘working example’ if that example ‘correlates’ with a disclosed or claimed method invention.”). This general rule has been elaborated in various situations, e.g., In re Brana, 51 F.3d 1560, 1566 (Fed. Cir. 1995) (“one who has taught the public that a compound exhibits some desirable pharmaceutical property in a standard experimental animal has made a significant and useful contribution to the art, even though it may eventually appear that the compound is without value in the treatment in humans”); Scott v. Finney, 34 F.3d 1058, 1063 (Fed. Cir. 1994) (“Testing for the full safety and effectiveness of a prosthetic device is more properly left to the Food and Drug Administration. Title 35 does not demand that such human testing occur within the confines of Patent and Trademark Office proceedings.”).

Rather than following any bright-line rule requiring human testing, the court refocused attention on the so-called “Wands factors” of undue experimentation summarized by the court in the case of In re Wands, 858 F.2d 731 (Fed. Cir. 1988). These factors include:

  1. the quantity of experimentation necessary,
  2. the amount of direction or guidance presented,
  3. the presence or absence of working examples,
  4. the nature of the invention,
  5. the state of the prior art,
  6. the relative skill of those in the art,
  7. the predictability or unpredictability of the art, and
  8. the breadth of the claims.

In this vein, so to speak, the patentee had provided expert trial testimony as to how someone skilled in the art would be able to take the pig results and use them for a human version without undue experimentation. Based upon that testimony, the court was able to confirm that the jury conclusion was based on substantial evidence.

Validity judgment confirmed.

Construing Claims for Enablement: From a doctrinal standpoint, the question of whether a claim is sufficiently enabled should not depend upon the accused infringing activity. In practice that link is regularly found in the caselaw where courts focus the enablement question on activities related to the accused infringement. This case is no different. It turns out that the asserted claims are not expressly limited to a product for use with humans. Rather, the claims are directed toward “a valve prosthesis for implantation in a body channel.” Now, the specification does suggest that the problem being addressed deals with people and that suggestion cold potentially limit the claim scope. However, the court does not deal with the real reality that the claims are drafted in a way that would encompass use of the device in a variety of animals – many of them vastly different from a pig. In mind, this comes together to mean that we have a de facto special claim construction for enablement purposes that is used to understand the “full scope” of the claims.

Note:

  • The case has an important remedies discussion that will be included in a future post.
  • The parallel patent has been already litigated in both Germany and the UK with both cases resulting in non-infringement determinations. The key difference here is that the US courts have more broadly interpreted the claim term “cylindrical” to include shapes that are not really cylindrical. (The relevant portion of the accused device does not have a uniform diameter along its axis). That construction was confirmed on appeal since the specification does not explicitly require constant diameter.
  • In regards to the image accompanying this post, do you read from left-to-right or right-to-left?

Patent Stats for FY 2012

Patent

By Dennis Crouch

Yesterday I posted on the rising number of patent attorneys. There is also a rising number of patents and patent applications. The three tiered chart below shows the number of utility patents granted and nonprovisional utility applications filed for each fiscal year going back to 1981.

In addition to patents and applications, the chart also includes requests-for-continued-examination (RCEs) (and that form’s predecessors). I include RCE filings here because the PTO has traditionally reported RCEs as applications whereas I tend to consider them an element of prosecution within an application. Thus, for FY2012, the USPTO will report 515k patent applications while I would calculate that number at a much more modest 357k.

RCE FILINGS: RCE filings grew at an exponential rate for much of the last decade. However, for the past three years there has been almost no growth in the number of RCEs being filed each year. A few years ago, it appeared that RCEs were serving a role in an informal collusion between examiners and applicants where the filing of an RCE provided the examiner with an additional “count” and the applicant quickly received an issued patent following the filing. For several reasons, that approach appears to have largely subsided. Today, only a small number of RCE filing lead to a quick patent issuance and in fact, most applications where RCEs are filed are eventually abandoned.

The Baby Boom of Patent Practitioners

Patent

By Dennis Crouch

This morning, the USPTO provided official notice that Practitioner Registration No. 70,549 has been assigned and Robert Kent of Houston is now a patent agent. The PTO rolls have been steadily growing for the past 15 years – with about 10,000 new practitioners registering every 4-6 years. That rate is roughly triple of what it was throughout the 1980s and mid-1990s.

The chart below shows the number of currently registered US Patent Practitioners grouped by the number of years that they have been registered. The “baby boom” of patent practitioners that began 15 years ago will likely have some important impacts on career opportunities for patent attorneys who want to move into a senior or leadership role. Today, many patent practitioners with 10-15 years of experience are moving into leadership roles within their organizations.

See also, Estimate: Fewer than 26,000 Active US Patent Attorneys & Agents and Are you a Patent Attorney Masquerading as a Patent Agent?

Stoll: Maintaining Post-Grant Review Estoppel in the America Invents Act: A Call for Legislative Restraint

Patent,

In our newest Patently-O Patent Law Journal article, former Commissioner of Patents Robert Stoll considers and rejects the call for legislative reforms that would reduce the estoppel associated with post-grant review filings. Stoll writes:

Critics of this [estoppel] provision seek to strike reasonably-could-have-raised estoppel as applied to subsequent civil litigation. This position is mistaken, because limiting the estoppel only to issues actually raised in the post-grant review would encourage petitioner gamesmanship to the detriment of (i) the courts, whose busy dockets will be burdened with more complex and time-consuming validity questions that the petitioner reasonably could and should have raised in the post-grant review, (ii) the USPTO, whose post-grant review decisions will lose their finality with respect to the same petitioner vis-à-vis a later court challenge, and (iii) the patent owner, who will be forced to defend the validity of the same patent claim against the same petitioner in piecemeal proceedings rather than in a single forum. Post-grant review estoppel, as originally enacted, should be maintained for these and other reasons discussed in this Article.

The article is especially timely as we expect for Congress to consider several “technical amendment” proposals over the next few weeks for inclusion within an omnibus bill.

Read the article: Robert L. Stoll, Maintaining Post-Grant Review Estoppel in the America Invents Act: A Call for Legislative Restraint, 2012 Patently-O Patent Law journal 1 at  /media/docs/2012/11/stoll.2012.estoppel.pdf.

 

Are you a Patent Attorney Masquerading as a Patent Agent?

Patent

In looking through the USPTO database of registered practitioners, I was surprised to see that 93 patent agents list a current affiliation with the major firm, Finnegan Henderson. That seemed to me like an unusually large number of registered patent agents within a single firm. This morning I used Google to search for the first 30 on my list and found that 26 of those are actually patent attorneys, not patent agents. It appears that many of those individuals became a registered patent agent before having passed a state bar exam and then never changed their registration status. Of those 30, I also found a handful who are no longer at the Finnegan firm but have not updated their address information to reflect their new firm. I singled-out Finnegan here simply because they employ more US patent practitioners than any other law firm. No. 2 on that list (Fish & Richardson) does not appear to do a better job of managing its attorney rolls. I looked at the FR website for ten of their listed patent agents and found that nine of them are actually attorneys. Knobbe Martens is no different. Their top litigator, Joe Re, is listed as a patent agent on the USPTO rolls.

I was already aware of this issue, but it came to a head recently as I began working on a project that considers the professional role of patent agents as compared with patent attorneys. Outside of my own navel, the issue is important for several reasons – especially as the PTO moves to align its ethics rules with those of the various state bar associations.

The current USPTO rules require that "a registered practitioner who is an attorney in good standing with the bar of the highest court of one or more States shall provide the OED Director [William Covey] with the State bar identification number associated with each membership." 17 C.F.R. 11.11. Although not express within this sentence, the normal understanding is that any substantive change such as this will be updated "within thirty days of the date of the change." Id. The rule also requires practitioners to update their contact information.

The USPTO relies heavily on state bar association ethics rulings regarding individual practitioners in its own OED decisions. In addition, the USPTO is in the process of moving toward a system that more closely aligns its ethics rules with the rules of most state bar associations. However, this link cannot be easily made unless the USPTO is apprised of the patent attorney's state bar registration. Although certainly not strong evidence, an attorney's failure to provide this information is at least minimally suggestive of a desire to keep the various regulatory bodies from talking with one another about particular persons of interest. In reality, the failure to switch from agent to attorney is likely only an oversight in the vast majority of situations.

What to do: You can check your own registration status by searching on the USPTO website here: https://oedci.uspto.gov/OEDCI/. The process of making this change is quite easy, but it does require $100 to the USPTO and likely some money to the appropriate state bar to obtain a Certificate of Good Standing. http://www.uspto.gov/ip/boards/oed/practitioner/changeinfo.jsp.

Reviving Abandoned Applications

Patent

Around 5,200 utility patents issued on November 6, 2012. I was surprised to find that at least 76 of those had been abandoned at some point during prosecution and later revived and then patent. Although only about 1.5% of the patents, the number is still surprising. Of course, revival has become somewhat regularlized these days and is done with little consequence beyond a substantial fee ($1,890 plus any late fees) and loss of some PTA. In fact, the USPTO has created an automated computer system to grant petitions to revive so long as they are submitted and signed (electronically) by a registered patent practitioner. Further, the current thinking is that a patent cannot be later challenged for improper revival because that issue does not serve as a condition for patentability that qualifies as a defense under 35 U.S.C. § 282.

Even though my sample here is quite small, it still included many patent-industry leaders such as Fujitsu, GlaxoSmithKline, Texas Instruments, Carl Zeiss, Wi-LAN, Philips, IBM, Johnson Control, University of Texas, Illinois Tool Works, Intel, 3M, Seagate, University of Maryland, EMC, Sharp, LG, Kodak, Microsoft, FEI, etc. Each of these entities now has at least one new patent that was accidentally abandoned during the application processing and then later revived.

From my analysis of these cases, I do not perceive any attempts to game the system. Rather, the abandonments seem to be truly unintentional misses by offices and attorneys managing hundreds of cases. Luckily for the parties involved, the revival process is almost as easy as the abandonment.

Impact of Exelixis on Patent Term

Patent

By Dennis Crouch

I wanted to look a bit deeper into the impact of the recent decision in Exelixis, Inc. v. Kappos, Case No. 1:12cv96, 2012 U.S. Dist. LEXIS 157762 (E.D. Va. November 1, 2012).

The case stems from the patent term adjustment (PTA) provisions codified in 35 U.S.C. § 154(b). It is difficult to argue that 1952 Patent Act was well drafted. However, the rest of the Patent Act reads like a well edited prose as compared with Section 154(b). That section was added as part of the URAA (1994) and substantially amended with the AIPA (1999). The portion of Section 154(b) at issue in Exelixis is the three-year prosecution timeline guarantee found in 35 U.S.C. § 154(b)(1)(B). The provision generally (but with a few exceptions) provides one day of extra patent term for each day of pre-issuance prosecution pendency beyond the first three years, regardless of the cause of the extended pendency. One of the exceptions involve an applicant's filing of a request for continued examination (RCE). Under the prior PTO statutory interpretation, the filing of an RCE would cut-short any further 154(b)(1)(B) term adjustments. Exelixis rejects the PTO's analysis and holds instead that an RCE filing after the three-year date does not stop the PTA from running. The difference between these two calculations is shown in the generic application timeline shown below.

In its decision, the Exelixis court held that the change in interpretation mandated by the district court only impacts patents where a RCE filing occurred after the three-year mark. To get some quantitative sense of the change, I pulled up the file histories of the 5,200 utility patents issued in the first week of November 2012 (November 6, 2012).

Results: About 15% of patents in the group include a first-filed RCE following the three-year mark. Each of these patents would be eligible for at least some added patent term due to the Exelixis decision. As the table below shows, these patents already have an average PTA of 887 days. By my calculation, the Exelixis methodology would add an additional 452 days of patent term. As you might imagine, there is considerable variance amongst the affected patents.

Average PTA

Patents with first-RCE filed after three years of pendency

All Patents

Before Exelixis

887 days

450 days

Estimated After Exelixis

1,339 days

516 days

 

This change appears to be slightly less in overall magnitude, but additive to, the Federal Circuit's Wyeth v. Kappos decision from 2010. Importantly, in that case, the PTO did not begin using the new PTA calculation or offer guidance to patent applicants on the issue until after the Federal Circuit had confirmed the lower court decision.

Where Patent Attorneys Work: Big In House

Patent

The majority of US patent practitioners continue to work within traditional law firm environments. However, thousands serve as in-house counsel to innovative companies throughout the world. The following is a list of the top employers of US patent practitioners.

Company

IBM

3M

Johnson & Johnson

QUALCOMM

Procter & Gamble

Pfizer

Microsoft

Hewlett-Packard

MERCK

Intel

Medtronic

ELI LILLY

Google

Amgen

General Electric

Intellectual Ventures

Genentech

Research-In-Motion

Abbott Laboratories

Boeing

Bristol Myers Squibb

Dow Chemical

Monsanto

Life Technologies

Caterpillar

Chevron

Texas Instruments

Siemens

Xerox

Alcatel Lucent

Thomson Licensing/Technicolor

Glaxo Smith Kline

Canon

Wyeth

Apple

Nokia

Honeywell International

Novartis Pharmaceuticals

E I DuPont de Nemours

Shell Oil

Schlumberger Technology

Becton Dickinson

Baxter Healthcare

Eastman Kodak

ExxonMobil

Corning

Pioneer Hi Bred International

BP America

Boston Scientific

Deere

Canadian Supreme Court Voids Pfizer’s Viagra Patent – Focusing Disclosure Requirement on the Patent as a Whole

Patent

Teva Canada Ltd. v. Pfizer Canada Inc., 2012 SCC 60 (Supreme Court of Canada 2012)

In a November 8, 2012 decision, the Supreme Court of Canada has ruled that Pfizer’s Viagra patent is void for failure to satisfy the disclosure requirement of § 27 of Canadian patent law. See, Canadian Patent 2,163,446. Apart from the major market impact, the case is doctrinally important in the way that the court treats the disclosure requirement as applying to the patented invention as a whole rather than focusing only on a claim-by-claim analysis.

The active ingredient in Viagra is sildenafil. However, the bulk of the patented claims are more broadly directed toward the use of classes of compounds that include sildenafil or sister compounds to treat erectile dysfunction (ED). Of course, of all of these potential and patented compounds, only sildenafil has been proven effective in treating ED. Further, the patent document does not particularly identify disclose that sildenafil is the compound that works.

The court found that the disclose was lacking because it did not particularly direct one skilled in the art to use the particularly important compound – sildenafil.

Considering the specification as a whole, the use of sildenafil and the other compounds for the treatment of ED comprise one inventive concept. Even though a skilled reader will know that, when a patent contains cascading claims, the useful claim will usually be at the end concerning an individual compound, the claims in the patent ended with two individually claimed compounds [only one of which is sildenafil]. There was no basis for a skilled person to determine which of Claim 6 and Claim 7 contained the useful compound, further testing would have been required to determine which of those two compounds was actually effective in treating ED.

. . .

Although s. 27 does not specify a remedy for insufficient disclosure, the quid pro quo underpinning the Act leads to the conclusion that deeming the patent invalid is the logical consequence of a failure to properly disclose the invention and how it works. If there is no quid — proper disclosure — then there can be no quo — exclusive monopoly rights.

Patent void and invalid.

Patent

By Dennis Crouch

Samsung v. Apple, [2012] EWCA Civ 1430

The concluding line of Sir Robin Jacob’s opinion reads as follows: “I hope that the lack of integrity involved in this incident is entirely atypical of Apple.” Apart from misleading the court on several fronts, Apple had failed to comply with the notice-of-loss publication required by the court. In the underlying decision, the UK court found that Samsung’s Galaxy devices do not infringe Apple’s iPad related design right. And, because the court was sitting in its role as a European design court, the decision has Pan-European effect. Because of the loss-of-reputation that the lawsuit has caused to Samsung, the court ordered Apple to publish the a notice as follows:

On 9th July 2012 the High Court of Justice of England and Wales ruled that [Samsung’s] Galaxy Tablet Computers, namely the Galaxy Tab 10.1, Tab 8.9 and Tab 7.7 do not infringe Apple’s Community registered design No. 0000181607-0001. A copy of the full judgment of the High Court is available from [link]

That Judgment has effect throughout the European Union and was upheld by the Court of Appeal of England and Wales on 18th October 2012. A copy of the Court of Appeal’s judgment is available from [link]. There is no injunction in respect of the Community Registered Design in force anywhere in Europe.

Instead of publishing that exact notice, Apple took a much more ballsy approach and published the following notice on its website:

Samsung / Apple UK judgment

On 9th July 2012 the High Court of Justice of England and Wales ruled that Samsung Electronic (UK) Limited’s Galaxy Tablet Computer, namely the Galaxy Tab 10.1, Tab 8.9 and Tab 7.7 do not infringe Apple’s registered design No. 0000181607-0001. A copy of the full judgment of the High court is available on the following link www.bailii.org/ew/cases/EWHC/Patents/2012/1882.html.

In the ruling, the judge made several important points comparing the designs of the Apple and Samsung products:

“The extreme simplicity of the Apple design is striking. Overall it has undecorated flat surfaces with a plate of glass on the front all the way out to a very thin rim and a blank back. There is a crisp edge around the rim and a combination of curves, both at the corners and the sides. The design looks like an object the informed user would want to pick up and hold. It is an understated, smooth and simple product. It is a cool design.”

“The informed user’s overall impression of each of the Samsung Galaxy Tablets is the following. From the front they belong to the family which includes the Apple design; but the Samsung products are very thin, almost insubstantial members of that family with unusual details on the back. They do not have the same understated and extreme simplicity which is possessed by the Apple design. They are not as cool.”

That Judgment has effect throughout the European Union and was upheld by the Court of Appeal on 18 October 2012. A copy of the Court of Appeal’s judgment is available on the following link www.bailii.org/ew/cases/EWCA/Civ/2012/1339.html. There is no injunction in respect of the registered design in force anywhere in Europe.

However, in a case tried in Germany regarding the same patent, the court found that Samsung engaged in unfair competition by copying the iPad design. A U.S. jury also found Samsung guilty of infringing on Apple’s design and utility patents, awarding over one billion U.S. dollars in damages to Apple Inc. So while the U.K. court did not find Samsung guilty of infringement, other courts have recognized that in the course of creating its Galaxy tablet, Samsung wilfully copied Apple’s far more popular iPad.

Apple has now corrected its website and will be paying additional fees to Samsung.

Read the full UK decision here http://www.bailii.org/ew/cases/EWCA/Civ/2012/1430.html.

 

 

 

Accelerated Examination

Patent

By Dennis Crouch

The PTO backlog and resulting delays in prosecution is rightfully a common topic of discussion for patent applicants. However, there are also a growing number of patents being issued on a much shorter timeline through the USPTO’s prioritized examination program known as “Track 1.” Under the program, applicants pay a $4,800 fee to be advanced in the prosecution queue.

Of the 5,200 utility patents issued this week, 34 of them took the Track 1 route to patentability. On average, those patents were pending for 11 months (filing date to issue date). This compares with a 39-month average for the rest of the pack of issued patents. In this small sample, Google is the most filer with 9 of the 34 patents. Only one of the patents is owned by a foreign entity (Beijing Tang-An). About half of the patents claim priority to a prior non-provisional application.

Since the program began a little over one year ago, there have been about 6,000 Track 1 petitions. The vast majority of those have been granted or are currently under consideration with less than 5% of petitions denied.

Recent Patently-O Posts

Patent

 

 

Overkill of the Best Mode

Patent, ,

By Dennis Crouch

Joy Mining Machinery v. Cincinnati Mine Machinery (Fed. Cir. 2012) (nonprecedential)

In what may well be its final decision on the best mode requirement of 35 U.S.C. §112(1), the Federal Circuit has reversed a district court judgment invalidating claim 2 of Joy MM's asserted Patent No. 6,662,932. However, the decision will provide additional legal foundation for patent applicants to keep important or sensitive information regarding their invention as a trade secret rather than including that information as part of the patent disclosure.

Here, the court confirms that the best mode requirement does not require actual disclosure of the best mode, but rather only adequate disclosure to enable one of skill in the art to practice the best mode without undue experimentation. Citing See Ajinomoto Co. v. Int'l Trade Comm'n, 597 F.3d 1267 (Fed. Cir. 2010); and Young Dental Mfg. Co. v. Q3 Special Prods., Inc., 112 F.3d 1137 (Fed. Cir. 1997).

In this case, the inventors had apparently decided that the best mechanism for its claimed drive-pin retainer was a press-fitting. However, the applicant failed to identify that particular mechanism in the specification and instead suggested welding. At the time, a press-fitting mechanism was already known to those of skill in the art as one way to construct a drive-pin retainer. As such, the federal circuit found that the failure to disclose that best mode did not qualify as an actionable concealment.

Accordingly, CMM cannot point to any clear and convincing evidence upon which a reasonable jury could rely to find that the omission of press-fitting from the written description of the '932 patent "concealed" its use as a drive pin retaining means from the public.

It is unclear to this author how "concealment" can be read into the statute. Rather, Section 112 affirmatively requires that the applicant "set forth the best mode" not simply avoid concealment. The America Invents Act of 2011 (AIA) substantially alters best mode jurisprudence. Although the statutory change leaves the requirement in place without amendment, the new law prevents any post grant action (either in court or the PTO) that would challenge a patent as invalid or unenforceable based upon failure to disclose the best mode.

In reality, this decision will not have much impact beyond putting another hole in a doctrine whose obituary has already been read.

Notes:

110812_1633_Overkilloft2

Summary of Oral Argument in Already, LLC d/b/a Yums v. Nike, Inc.

Patent,

Guest Post by Megan M. La Belle, Catholic University Columbus School of Law. Professor La Belle attended the oral argument in Already, LLC d/b/a Yums v. Nike, Inc. yesterday and was kind enough to prepare this summary for Patently-O.

Yesterday, the United States Supreme Court heard oral argument in Already, LLC d/b/a Yums v. Nike, Inc., a case involving a Nike trademark covering one of its sneaker designs. The issue before the Court is whether Nike’s covenant not to sue divested the federal court of Article III jurisdiction to decide Already’s counterclaim challenging the validity of the trademark. Although this is a trademark case, the Court’s decision is likely to impact patent law since the Federal Circuit allows patent owners to use covenants not to sue to divest courts of Article III jurisdiction over patent validity counterclaims. See Super Sack Mfg. Corp. v. Chase Packaging Corp., 57 F.3d 1054, 1059-60 (Fed. Cir. 1995).

All parties agreed at oral argument that an Article III case or controversy existed at the time Already asserted its counterclaim, but questions remain as to (1) whether Nike’s covenant not to sue moots Already’s counterclaim, and (2) who has the burden of proving that the counterclaim is moot. With respect to the first question, Already’s counsel, James Dabney, argued that the covenant not to sue did not moot Already’s claim because it didn’t cover certain future shoe designs. This argument prompted the justices to ask about broader covenants and whether those might suffice to divest the court of jurisdiction. Justice Kagan, for example, asked Mr. Dabney whether there is “any covenant that exists in the world that would make you feel secure.” In response, Mr. Dabney explained that the problem with covenants not to sue is that they allow potentially invalid trademarks to remain in force. Referring to Judge Learned Hand’s famous metaphor, Mr. Dabney said that these potentially invalid trademarks act as “scarecrows” that restrain the marketplace and cause “informational injury.” Mr. Dabney also argued that this practice of using covenants not to sue dates back only to 1995 (to the Federal Circuit’s Super Sack decision); it is a “recent, controversial practice that has never been embraced by this Court.”

Turning to the second issue, the Court asked a series of question about the burden of proof as to mootness. The justices all seemed to agree that, under Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 170 (2000), a defendant like Nike who claims that its voluntary compliance moots a case bears the formidable burden of showing that it is “absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.” Nike’s counsel, Thomas Goldstein, did not dispute that standard during argument, but instead took the position that Nike had carried its burden by granting Already the covenant not to sue. Mr. Goldstein further argued that if Already intended to design and market shoes in the future that would not be covered by that covenant (therefore placing Already at risk of an infringement suit), then Already had to provide the court with proof of those intentions. Justice Kennedy wondered why Already should have to do this and suggested that it would give Nike an unfair advantage: “I would think that…for a competitor to demand that the other competitor tell its plans, its marketing, is, to say the least, patronizing, and probably quite injurious in and of itself.” Justice Sotomayor added that this is particularly problematic in the fashion industry where timing is so important and competitors are concerned about “beating [each other] to the punch.” In response, Mr. Goldstein suggested that this sort of information is regularly disclosed in litigation and that parties like Already can rely on protective orders to prevent the type of harm mentioned.

In addition to the parties, Assistant Solicitor Ginger Anders argued as amicus curiae on behalf of the United States in support of vacatur and remand. The United States argued that the case should be remanded for the trial court to consider the mootness question under the proper Friends of the Earth standard. The justices questioned the government about Already’s ability to challenge the trademark’s validity at the United States Patent and Trademark Office in the event Already’s court challenge is mooted. Specifically, Justice Kennedy inquired whether a party like Already, if lacking an Article III case or controversy to challenge Nike’s trademark in federal court (because of a covenant not to sue), could nevertheless challenge the trademark at the PTO and then appeal an adverse decision by the PTO in federal court. In other words, Justice Kennedy asked:

Is standing easier to show once there has been an adverse action in the administrative office? Or are we right back where we started, so once you go to the agency and you try to appeal, the court says, well, this is an Article III court, we need a case or controversy, and you’re right back where we are now?

Ms. Anders responded that, in some circumstances, the adverse decision from the PTO would create an injury-in-fact sufficient to establish Article III standing for appeal. Nike’s counsel disagreed, however, arguing that Already would not have standing to appeal even after an unsuccessful challenge at the PTO. Nike conceded this as “a point in [Already’s] favor.”

This final question about whether an adverse administrative decision makes it easier to prove Article III standing is important in the patent context as well. The America Invents Act (“AIA”) allows any person (other than the patent owner) to challenge patents at the PTO in post-grant review, including competitors, consumers, and advocacy groups who would not have Article III standing to challenge the patent in federal court under current Federal Circuit law. The AIA further provides that an adverse decision from post-grant review may be appealed directly to the Federal Circuit. However, the discussion at oral argument in Already v. Nike highlights the fact that some post-grant review proceedings may not actually be reviewable on appeal for the very reasons that Justice Kennedy suggested.

The Court is expected to issue its decision before the end of June 2013. 

Links:

Exelixis v. Kappos: Court Finds PTO is Still Undercalculating Patent Term Adjustments

Patent

by Dennis Crouch

Exelixis, Inc. v. Mr. David Kappos (as PTO Director), Case No. 1:12cv96 (E.D. Va. November 1, 2012)  Download Exelixis_and_Kappos

Judge Ellis recently sided with the patentee Exelixis in ruling that the PTO improperly under-calculated the patent term adjustment due to the patentee. The focus of the case is how the filing of a request for continued examination (RCE) impacts any eventual patent term adjustment (PTA). The judge does a nice job of clearly spelling out the holding:

In sum, the plain and unambiguous language of [35 U.S.C. § 154(b)(1)(B)] requires that the time devoted to an RCE tolls the running of the three year clock if the RCE is filed within the three year period. And, put simply, RCE's have no impact on PTA if filed after the three year deadline has passed. The PTO's arguments to the contrary are not persuasive and, accordingly, the PTO's interpretation of subparagraph (B) must be set aside as "not in accordance with law" and "in excess of [its] statutory . . . authority."

This holding further extends the scope of patent term adjustments beyond the prior enhancement identified in Wyeth v. Kappos, 591 F.3d 1364 (Fed. Cir. 2010). I am estimating that this newest change impacts about 10% of recently issued patents — particularly those whose first RCE filing was more than three years after the application's actual US filing date. Up to now, the PTO has been cutting-off further PTA beyond the RCE filing date and now those applicants are eligible to seek a greater term adjustment.  In many cases, the re-adjusted PTA will extend the term by more than one year. 

Client Alert Now to Avoid Malpractice: Patents issued within the past 180 days are eligible for a recalculation. However, that recalculation will likely require the filing of a lawsuit in the Eastern District of Virginia. 35 U.S.C. § 154(b)(4)(A). "An applicant dissatisfied with a determination made by the Director under paragraph (3) shall have remedy by a civil action against the Director filed in the United States District Court for the Eastern District of Virginia within 180 days after the grant of the patent." For patents issued within the past two months, the PTA can be corrected via a request for reconsideration under 37 C.F.R. 1.705(d). Attorneys should beware to not simply assume that their clients are not interested in the work associated with obtaining an adjustment. The second action point here is, moving forward, applicants should not file an RCE before the three-year date without first fully considering the major PTA implications.

Judge Ellis begins the opinion with the simple question presented:

Whether 35 U.S.C. § 154(b)(1)(B) requires that an applicant's PTA be reduced by the time attributable to an RCE, where, as here, the RCE is filed after the expiration of AIPA's guaranteed three year period.

The text of section 154(b)(1)(B) begins with the headline of a "guarantee of no more than 3-year application pendency." The section provides that, subject to some caveats:

[I]f the issue of an original patent is delayed due to the failure of the [USPTO] to issue a patent within 3 years after the actual filing date of the application in the United States, not including—(i) any time consumed by continued examination of the application requested by the applicant under section 132 (b), … the term of the patent shall be extended 1 day for each day after the end of that 3-year period until the patent is issued.

In reading the statute, Judge Ellis found that the caveat for continued examination (RCE filing) modifies only the calculation of the original three-year timeline. An RCE filing prior the three-year mark will permanently toll the running of that clock. However, once the three-year delay is reached, the statute requires a 1-for-1 patent term adjustment from the three year mark through patent issuance.

Thus, subparagraph (B) essentially describes two calculations. The first is a description of the calculation of the three year period: The three year clock beings to run on the date the application is filed and, except for three specific potential tolling events, including the filing of an RCE, the clock runs continuously until the three year period ends. In other words, the "not including" portion of subparagraph (B), followed by (i), (ii), and (iii), clearly and unambiguously modifies and pertains to the three year period and does not apply to, or refer to, the day for day PTA remedy. Subparagraph (B)'s second calculation is simply a day for day addition to the PTA for every day beyond the end of the three year clock until the patent issues.

By implication, the result here is "that once the three year clock has run, PTA is to be awarded on a day for day basis regardless of subsequent events."

Up to now, the PTO has cut-off further type-B PTA at the point of an RCE filing – regardless of whether that RCE was filed after the three-year period. In its argument to the district court, the PTO asked that deference be given for its expert-agency interpretation of the statute. See Skidmore v. Swift & Co., 323 U.S. 134 (1944). The court rejected that argument. Basically, Skidmore deference comes about when there is some amount of ambiguity or lack of clarity in the statute. Here, however, the court found this question unambiguous and thus "that Skidmore deference is unwarranted."

Moving forward and except for continuation applications and delayed PCT applications, this ruling essentially guarantees that newly issued patents will be given a term of at least 17-years from issuance. This result substantially subverts a primary goal of the 20-year-from-filing term to eliminate the applicant incentive to keep an application pending for a long period of prosecution prior to issuance.

The USPTO has not yet announced whether it will appeal to the Federal Circuit.