Business Method Patents: Insurance Companies Fighting over Patented Annuity Plans

Infringement, Patent, Patentable Subject Matter

Lincoln National Life Insurance Co. v. Transamerica Life Insurance Co. (Fed. Cir. 2010)

It is not unusual to see insurance companies in litigation. What is unusual here is that the context is patent infringement. Lincoln is pursuing Transamerica and others for infringement of its patents covering a method of administering a variable annuity plan with a guaranteed minimum payment that continues even after an account had been exhausted. Although clearly a business method, the asserted claims do recite (in the preambles) that the method is "computerized."  U.S. Patent No. 7,089,201.

A jury found the claims valid and infringed and awarded $13 million in damages. On appeal, Transamerica asked for reversal of the infringement verdict and for an opportunity to present its case on patentable subject matter. The Federal Circuit reversed on infringement.

Non-Infringement: The asserted claims require that scheduled payments be made "even if the account value is exhausted before all payments have been made." Transamerica argued that it could not infringe because (1) none of its subscribers had ever "exhausted" their accounts and (2) that its computer system has not been configured to automatically pay on an exhausted account.

On appeal, the Federal Circuit agreed with the patentee that the claim did not require that any accounts actually be exhausted. Rather, the claim only requires a particular action if the accounts are exhausted.

On the second point, however, the Federal Circuit agreed with the accused infringer — finding that "nothing in the record" shows that Transamerica uses a computer system to make scheduled payments once an account has been exhausted.

Legal Obligation to Infringe: As an interesting tid-bit, Transamerica's contracts apparently do required the company to continue making scheduled payments even after its accounts had been exhausted.  The Federal Circuit rejected the legal obligation as proof of infringement — holding instead that the claims require computer implementation of the method. Furthermore, a contractual obligation to perform a method does not constitute infringement. Rather, infringement requires performance: "A contractual obligation to perform an act is not performance; indeed, a party could avoid infringement simply by breaching its contract."

Non-Patentable Subject Matter: Based on its non-infringement holding, the Federal Circuit left the Section 101 question undecided as moot.

    

Patently-O Bits and Bytes

Bits and Bytes, Patent
  • Thank you Sponsors:
  • Speaking of the Job-Board. There are several new listings:
    • Leviton Manufacturing (Long Island, New York) needs to hire a patent agent to manage both US and Foreign prosecution.
    • The International IP firm of Ladas and Parry seeks EE patent prosecutors in Los Angeles as well as IP attorneys with their own books of business.
    • Pfizer seeks an experienced patent attorney to join its small molecule therapeutics team in Groton, Connecticut.
    • In Washington, D.C., the firm of Smith, Grambrell & Russell, LLP is seeking an experienced patent attorney with a mechanical engineering background.
  • Speaking of MBHB.
    • I'm proud to announce that Team USA is champion the 2010 Patent Cup Regatta held this year off the island of Marstrand in Sweden. Team USA included three MBHB partners – Leif Sigmond (captain), Marcus Thymian, and Michael Gannon – along with Derek Minihane of Cochlear. The US team beat-out competing teams from Canada, Brazil, France, Germany, UK, and the EPO. [Link]
  • Patenting Methods of Paying for Patents
    • WhitServe LLC v. Benesch Friedlander Coplan & Aranoff LLP et al., 8-10-cv-01639 (D. Md. 2010). [Zura]

Patently-O Bits and Bytes

Bits and Bytes, Patent
  • Thank you Sponsors:
  • Speaking of the Job-Board. There are several new listings:
    • Leviton Manufacturing (Long Island, New York) needs to hire a patent agent to manage both US and Foreign prosecution.
    • The International IP firm of Ladas and Parry seeks EE patent prosecutors in Los Angeles as well as IP attorneys with their own books of business.
    • Pfizer seeks an experienced patent attorney to join its small molecule therapeutics team in Groton, Connecticut.
    • In Washington, D.C., the firm of Smith, Grambrell & Russell, LLP is seeking an experienced patent attorney with a mechanical engineering background.
  • Speaking of MBHB.
    • I'm proud to announce that Team USA is champion the 2010 Patent Cup Regatta held this year off the island of Marstrand in Sweden. Team USA included three MBHB partners – Leif Sigmond (captain), Marcus Thymian, and Michael Gannon – along with Derek Minihane of Cochlear. The US team beat-out competing teams from Canada, Brazil, France, Germany, UK, and the EPO. [Link]
  • Patenting Methods of Paying for Patents
    • WhitServe LLC v. Benesch Friedlander Coplan & Aranoff LLP et al., 8-10-cv-01639 (D. Md. 2010). [Zura]

Submitting Positive Decisions to the World Patent Offices

Patent, Patent Applications

A large number of US patent applications have corresponding applications being examined in various office actions around the world. Although the major Patent Offices generally give no legal deference to the decisions of another Office, it makes sense that the decision of a first-examining Office would at least inform the analysis of the second-examining Office.

On that note, is it a regular practice of patent applicants to highlight the positive actions of other offices (such as the allowance of parallel claims)? Are there certain worldwide offices where this type of submission is more common?

Terminal Disclaimers and PTO: Proposal for a Test Case

Obviousness, Patent, Patent Applications

Obviousness-type non-statutory double patenting is a judicially created doctrine that operates to prevent patentees from improperly extending a patent's effective term through successive patent grants.

The non-statutory double patenting doctrine was created at a time when patent term was measured from the grant date. At that time, it was easy to "play games" with the patent terms by using a series of continuation applications. Because patent term (for new patents) is now defined by the filing/priority date, most of the potential for games has been eliminated because a family of related applications will typically have the same term. However, a growing issue is patent term adjustment (PTA) that increases the patent term for applications with long prosecution pendency. Because of the increased backlog and changes to PTA calculations, it is likely that later-issued applications in a family will have a longer PTA.

Courts and the PTO have agreed that a patentee can overcome a non-statutory double patenting problem by filing a terminal disclaimer that ties the patent-term of a later-granted patent to the patent term of an earlier-granted patent.

The impact of a terminal disclaimer depends upon what was actually disclaimed. Although applicants can draft their own terminal disclaimer, most folks use the form provided by the USPTO. (SB-0025). The PTO Form disclaims the term of the later-issued patent that extends beyond the earlier-issued patent's term. Regarding PTA, the Form expressly ties the later-issued patent's term to the PTA-adjusted term of the earlier-issued patent.

Although not expressly stated, the Form seems to imply that the PTA of the later-issued patent can be cut-short by the disclaimer. That result, however, is not compelled by the law. In theory (and largely in practice) PTA is based on patent office delay. As such, the equitable basis of the non-statutory double patenting doctrine might not apply to require disclaimer of PTA.

A patent applicant may want to pursue a test-case by modifying the terminal disclaimer form to expressly state that the disclaimer does not cut short the PTA of that later-issued patent. Thus, the term of a later-issued patent with a 400-day PTA and a terminal-disclaimer would limited to the term of the earlier-issued patent plus 400-days.

 

SGI v. AMD: Chief Judge Rader on Claim Construction

Patent

Silicon Graphics, Inc. (SGI) v. ATI Technologies, Inc. and Advanced Micro Devices (AMD) (Fed. Cir. 2010)

In his first opinion as Chief, Judge Rader provided the parties with a lesson in claim construction. This decision is a case-in-point for the high value of professional patent drafting because the decision turns on the esoterics of claim construction. This decision also highlights the primacy of claim construction in the infringement analysis. Namely, the question of whether ATI chips infringe was boiled-down into an interpretation of the claim language.

SGI’s patent is directed to graphics processing hardware that uses floating point calculations.

Meaning of “A”: The asserted patent claims include “a rasterization circuit . . . that rasterizes the primitive according to a rasterization process which operates on a floating point format.” Although the accused ATI chips do use floating point numbers, the ATI rasterization process also uses fixed-point numbers. The district court held that the ATI chips could not infringe because their rasterization process does not operate in floating point format “as a whole.”

On appeal, the Federal Circuit re-parsed the claim language and rejected the district court’s construction as erroneous. Rather, the fact that a circuit rasterizes using fixed point format does not preclude the circuit from also using “a rasterization process which operates on a floating point format” as required by the specification.

The use of the indefinite article “a” in the claim, when coupled with the list of processes provided in the specification, makes it clear that the claims’ references to “a rasterization process” means “one or more rasterization processes.”

The limitation “a rasterization process which operates on a floating point format” therefore means that “one or more of the rasterization processes (e.g., scan conversion, color, texture, fog, shading) operate on a floating point format.” This construction is also in line with the rest of the specification. Nowhere does the specification teach that all rasterization processes must operate on a floating point format.

Summary of the Invention: The claim also requires that the rasterization circuit perform “scan conversion.” The district court required that the scan conversion be accomplished entirely using floating point numbers. On appeal, the Federal Circuit agreed with that interpretation. In making its decision to limit the breadth of the term, the court looked to a statement from the Summary of the Invention that: “the scan conversion process is now handled entirely on a floating point basis” and another statement from the specification that “this rasterization process is performed exclusively in a floating point format.” In several places, the specification indicated that various operations could be performed using fixed point numbers. However, the court held those statements insufficient because they were never specifically directed to the scan conversion process. “Thus general language in the specification permitting some operations to be done in fixed point does not work to contradict the specific language that requires scan conversion in floating point.”

Likelihood of Office Action Rejections

Patent

The following table is based on the file histories of 20,000 published patent applications that have been disposed-of.

Technology Center

Non-Final Rejection

Final Rejection

Request for Continued Examination

Restriction Requirement

1600 – Biotechnology and Organic Chemistry

80%

35%

16%

54%

1700 – Chemical and Materials Engineering

87%

38%

17%

21%

2100 – Computer Architecture, Software, and Information Security

91%

46%

27%

6%

2400 – Computer Networks, Multiplex, Video Distribution, and Security

93%

47%

28%

6%

2600 – Communications

85%

33%

18%

7%

2800 – Semiconductors, Electrical and Optical Systems and Components

77%

27%

15%

18%

3600 – Transportation, Construction, Electronic Commerce, Agriculture

88%

36%

14%

19%

3700 – Mechanical Engineering, Manufacturing, Products

86%

34%

15%

18%

The following two tables provide the same information but are limited to applications that have issued and that have been abandoned respectively.

PATENTED: Technology Center

Non-Final Rejection

Final Rejection

Request for Continued Examination

Restriction Requirement

1600 – Biotechnology and Organic Chemistry

84%

34%

21%

44%

1700 – Chemical and Materials Engineering

83%

34%

20%

19%

2100 – Computer Architecture, Software, and Information Security

88%

42%

31%

7%

2400 – Computer Networks, Multiplex, Video Distribution, and Security

89%

46%

36%

6%

2600 – Communications

81%

32%

20%

7%

2800 – Semiconductors, Electrical and Optical Systems and Components

73%

23%

15%

17%

3600 – Transportation, Construction, Electronic Commerce, Agriculture

84%

32%

17%

19%

3700 – Mechanical Engineering, Manufacturing, Products

82%

31%

17%

18%

ABANDONED: Technology Center

Non-Final Rejection

Final Rejection

Request for Continued Examination

Restriction Requirement

1600 – Biotechnology and Organic Chemistry

77%

35%

12%

62%

1700 – Chemical and Materials Engineering

91%

44%

14%

24%

2100 – Computer Architecture, Software, and Information Security

98%

52%

20%

6%

2400 – Computer Networks, Multiplex, Video Distribution, and Security

96%

49%

21%

6%

2600 – Communications

93%

37%

15%

7%

2800 – Semiconductors, Electrical and Optical Systems and Components

90%

41%

12%

23%

3600 – Transportation, Construction, Electronic Commerce, Agriculture

93%

40%

10%

19%

3700 – Mechanical Engineering, Manufacturing, Products

93%

38%

11%

19%

Beating the Deadline: Timing the Responses to Non-Final Office Actions

Patent

PatentlyO060

I took a sample of 6,600 published patent applications whose prosecution files each included an initial non-final office action rejection and a response to that action that was submitted sometime between January 1, 2008 – June 10, 2010.  Based on the dates of the office action and response, I created the histogram shown above. (Note, the histogram is corrected for due-date shifts caused by weekends and holidays).  The data is an improvement on what I presented in 2008. [Link]

As the chart show, patent applicant responses are extremely deadline driven. A typical non-final office action allows three-months to respond, but that deadline can be extended for up to three more months (for a fee).  The current extension fees are $130, $490, and $1,100 for one, two, and three month extensions respectively. That fee is cut in half for qualified “small entities.”  About 2/3 of applicants respond within the original three-month deadline. An additional legal reason to meet the original three-month deadline is that it preserves potential patent term adjustment (PTA) created by patent office delays. PTA is reduced by one-day for each day of applicant delay beyond the three month date.

Hitting the Deadline: More than 26% of the responses were filed on the exact day of the three month deadline. For applicants that missed that date, 70% filed their responses within four-days of a deadline.

Compact Prosecution: One problem with long delays is that information regarding the invention, the business needs, and the prior art, and the attorney-examiner relationship all become stale in the course of three months.  Although this staleness is difficult to quantify, I did look at patent grant rate as a function of the timing of responses. In my study, I found a clear and significant negative correlation between grant rate and delay in responding to the non-final office action.  I.e., longer delays are associated with a lower grant rate. (Here, grant rate is calculated as the number of patents issued divided by sum of the number of patents issued and applications abandoned).  The chart below groups applications according to the earliest deadline met in their first OA response and reports the grant rate for each group.

PatentlyO061

Satisfied With Delay: A delay in applicant response more-likely-than-not will delay the eventual issuance of the patent.  These figures show that most applicants are not troubled by that delay. On that note, I found that applicants that claim priority to a provisional application tend to have longer delays in responding to office actions. That is not surprising since the filing of the provisional already indicates that the applicant is comfortable with delay.  As might be expected, applications relating to Biotechnology and Organic Chemistry (TC 1600) tend to have a longer delay as well.

 

When Can a Digital File be a “Product” under Section 271(g)?

Patent

Yangaroo v. Destiny Media Techmap_can_usa.jpg (E.D. Wisc. 2010)

In an interesting trans-national infringement case, Judge Griesbach awarded summary judgment of non-infringement in favor of the accused infringer. The court held that the Canadian-based defendant’s actions did not qualify as infringement under Section 271(g)’s proscription against importation-of-a-product-made-by-a-patented-process.

35 USC 271(g): Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer. . .

The asserted patent claims a particular method of distributing a content file over a network. After a series of steps, recipient terminals are provided with access to the content file. The accused infringer (Destiny) distributes encrypted music files using a method that (arguably) would infringe the patent under 271(a) if it had been performed within the US. The focal-point of the 271(g) dispute here was on whether the digital music files could be considered “products” within the meaning of 271(g).

Some prior cases:

  • Bayer AG v. Housey Pharm., Inc., 340 F.3d 1367, 1371-72 (Fed. Cir. 2003) (271(g) applies only to “physical products” and does not extend to “information” produced by a patented process.).
  • NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005) (citing Bayer and holding that email packets sent from Canada were not “products . . . [b]ecause the ‘transmission of information,’ like the ‘production of information,’ does not entail the manufacturing of a physical product . . . .”).
  • CNET Networks, Inc. v. Etilize, Inc., 528 F. Supp. 2d 985 (N.D. Cal. 2007) (transmission of electronic catalog of product information could be a “product” within the meaning of 271(g); distinguishing NTP and Bayer as involving “services” and “information” rather than “products” and stored data).
  • Ormco Corp. v. Align Technology, Inc., 609 F. Supp. 2d 1057 (C.D. Cal. 2009) (a three dimensional digital representation of teeth transmitted to recipients in the United States was a product).

Present Decision: In Yangaroo, the court distinguished CNet and Ormco by holding that the distributed music file was not a “product” of the method because the music file was not created by the claimed process.

Notes:

  • The Defendant (Destiny) did modify the music files during its distribution process by encrypting them. The district court held that the newly encrypted files could not be considered 271(g) products because the asserted patent did not claim encryption.
  • Ted Sabety handled the defense.

When Can a Digital File be a “Product” under Section 271(g)?

Patent

Yangaroo v. Destiny Media Techmap_can_usa.jpg (E.D. Wisc. 2010)

In an interesting trans-national infringement case, Judge Griesbach awarded summary judgment of non-infringement in favor of the accused infringer. The court held that the Canadian-based defendant’s actions did not qualify as infringement under Section 271(g)’s proscription against importation-of-a-product-made-by-a-patented-process.

35 USC 271(g): Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer. . .

The asserted patent claims a particular method of distributing a content file over a network. After a series of steps, recipient terminals are provided with access to the content file. The accused infringer (Destiny) distributes encrypted music files using a method that (arguably) would infringe the patent under 271(a) if it had been performed within the US. The focal-point of the 271(g) dispute here was on whether the digital music files could be considered “products” within the meaning of 271(g).

Some prior cases:

  • Bayer AG v. Housey Pharm., Inc., 340 F.3d 1367, 1371-72 (Fed. Cir. 2003) (271(g) applies only to “physical products” and does not extend to “information” produced by a patented process.).
  • NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005) (citing Bayer and holding that email packets sent from Canada were not “products . . . [b]ecause the ‘transmission of information,’ like the ‘production of information,’ does not entail the manufacturing of a physical product . . . .”).
  • CNET Networks, Inc. v. Etilize, Inc., 528 F. Supp. 2d 985 (N.D. Cal. 2007) (transmission of electronic catalog of product information could be a “product” within the meaning of 271(g); distinguishing NTP and Bayer as involving “services” and “information” rather than “products” and stored data).
  • Ormco Corp. v. Align Technology, Inc., 609 F. Supp. 2d 1057 (C.D. Cal. 2009) (a three dimensional digital representation of teeth transmitted to recipients in the United States was a product).

Present Decision: In Yangaroo, the court distinguished CNet and Ormco by holding that the distributed music file was not a “product” of the method because the music file was not created by the claimed process.

Notes:

  • The Defendant (Destiny) did modify the music files during its distribution process by encrypting them. The district court held that the newly encrypted files could not be considered 271(g) products because the asserted patent did not claim encryption.
  • Ted Sabety handled the defense.

False Marking: Solo Cup Properly Rebutted Presumption of Intent to Deceive

Patent

Pequignot v. Solo Cup (Fed. Cir. 2010)

Over the past year, hundreds of companies have been sued for false patent marking. The qui-tam style statute creates a cause of action against manufacturer who, with intent to deceive the public, mark unpatented products as patented. Any person may sue to collect the damages, however, half of the award goes to the Federal Government. Damage awards may be awarded up to $500 per falsely marked article.

35 USC 292(a): Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word “patent” or any word or number importing the same is patented, for the purpose of deceiving the public; or Whoever marks upon, or affixes to, or uses in advertising in connection with any article the words “patent applied for,” “patent pending,” or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public – Shall be fined not more than $500 for every such offense.

Most of the pending false-marking cases have a similar factual underpinning: The product being sold is marked was covered by a patent, and the manufacturer continued to mark the products as patented even with knowledge that the patents had expired. Solo cup made two separate arguments as to why these facts are insufficient to prove false marking: (1) that a product covered by an expired patent is not “unpatented” as required by the statute; and (2) that the fact of patent expiration is insufficient to show an intent to deceive the public.

Unpatented Article: Without question, a patented article is “unpatented” once the associated patents expire.

As the district court pointed out, “[a]n article that was once protected by a now-expired patent is no different [from] an article that has never received protection from a patent. Both are in the public domain.”

The court recognized that expiry dates are often difficult to calculate:

[D]etermining the expiration date of a patent can, at times, be difficult. The date of the patent grant is shown on the first page of a patent, but its term currently also depends on the date it was filed; in 1994, the effective term of a patent changed from seventeen years commencing at issuance to twenty years from filing. Furthermore, the term depends on whether there are patent term adjustments and whether the patent owner has paid maintenance fees. Thus, as with a never-patented article, an article marked with an expired patent number imposes on the public “the cost of determining whether the involved patents are valid and enforceable.”

Solo’s products that were once covered by now-expired patents are therefore “unpatented” within the meaning of the statute.

Rebuttable Presumption of Intent to Deceive: On appeal, the Federal Circuit held that a rebuttable presumption of intent to deceive is created when a manufacturer prints expired patent numbers on its products with knowledge that the patents are expired. However, this level of evidence leaves only a “weak” the presumption of intent that can be easily rebutted.

Here, the Federal Circuit agreed that Solo Cup did indeed rebut the presumption by providing “credible evidence that its purpose was not to deceive the public.” In particular, the court held that rebuttal evidence was provided by Solo Cup’s “good faith reliance on the advice of counsel” (who said that Solo need-not remove the expired patent listing) and “out of a desire to reduce costs and business disruption.”

Holding: No violation.

This decision will put a damper on the false-marking claims. However, some defendants may not have the same advice-of-counsel excuse.

Jon Dudas New President of FIRST — the Youth Robotics Leader

Patent

JonDudasFormer PTO Director Jon Dudas has taken an interesting new job as President of the non-profit organization FIRST (For Inspiration and Recognition of Science and Technology) (www.usfirst.org). FIRST was originally founded by Dean Kamen and has the goal of helping youth find inspiration and career pathways in science, technology and engineering.

More than 200,000 students competed in FIRST robotics and technology competitions in the past year.  Kamen sees these technology initiatives as an alternative to sports. Kamen: “Not every kid wants to be a professional engineer, but they deserve the opportunity to get a taste of the world of science, engineering, technology and problem-solving. It ought to be at least as accessible to every kid as any sport. . . . Bounce, bounce, throw’ is a nice thing to get good at, but it’s not going to change security, healthcare environmental issues, or quality of life.”

Jon Dudas has been a partner at Foley & Lardner since leaving the PTO in early 2009. 

Timing of the Notice of Allowance, Issue Fee Payment, and Patent Issuance

Patent

A Patently-O reader asked a question about the timing of a patent’s issuance and whether the date of issue-fee payment affects the issue date.  i.e., whether “the patent will issue on the same day regardless of whether the issue fee is paid immediately after receiving the notice of allowance or waiting until the statutory deadline to pay.  Any thoughts?”

To answer this question, I pulled-up the file histories for 630 patents issued on June 8, 2010 and created a table comparing the respective dates of (1) the notice of allowance, (2) payment of the issue fee, and (3) issuance of the patent. I limited the sample to include only payments made within the statutory three-month window. Some file histories included multiple notices of allowance. For those, I only looked at the last-mailed notice.

Answer: As the charts shows below, the timing of issuance is closely correlated with timing of the payment of the issue fee. In my sample, 88% of the patents issued within 6–8 weeks of payment of the issue fee. Those that took longer were, for the most part, associated with older applications.  In addition, the delay was greater for applicants that waited until the deadline to pay the issue fee.

PatentLawPic1002

The second chart shows a histogram of delay from the payment of the issue fee until patent issuance. Most patents issue in the sixth-week after payment.

PatentLawPic1003

The final chart shows patent applicant delay in payment of the issue fee. The chart was created by comparing the date of issue fee payment to the three-month payment deadline. More than 50% of applicants waited until the the week of the deadline to pay their issue fee. Why the delay?

PatentLawPic1005

 

Patent Grants Remain at All-Time High

Patent

The USPTO issues patents each Tuesday morning at 12:01 am. In the past several weeks, I have reported on the rising number of patents being issued each week. The past seven-weeks rank as the top-seven weeks of all time in terms of the number of utility patents issued.

PatentlyO058

Policies and Procedures: Over the past year, the PTO has increased its weekly patent grant count by more than 30%. During that time, the PTO did not increase its budget or hire a significant number of patent examiners. The difference appears to come from two avenues: (1) changes in PTO policies and procedures that provide patent examiners more opportunity to find patentable claims and (2) changes in patent applicant behavior in favor of accepting narrower claims.

The Backlog: The rising number of grants is at least slowing the growth of the application backlog. However, it does not appear to be sufficient to actually shrink the backlog. About 8,750 utility applications are filed each week — a figure greater than the average weekly final disposals (issued patents + abandoned applications). Using the increased grant-count and a 60% allowance rate, I calculate about 7,600 such final disposals each week.  

Claim Construction Internal Consistency

Patent

PatentLawPic1001Haemonetics v. Baxter Healthcare (Fed. Cir. 2010)

This decision is important for its endorsement of the claim construction canon that the internal logic and grammar of an individual claim takes primacy over inter-claim consistency.

Haemonetics’ asserted claim was directed to: 16. A centrifugal unit comprising a centrifugal component and a plurality of tubes . . . with the centrifugal unit having a radius between 25 and 50 mm and a height between 75 and 125% of the radius.

The preamble of Claim 16 clearly indicates that the centrifugal unit includes both a centrifugal component a plurality of tubes. However, other claims and the specification indicate that the centrifugal unit did not include the tubes. 

On appeal, the Federal Circuit held that the clarity of Claim 16 controlled the term’s construction for that claim.  Regardless of its use elsewhere, in claim 16, the centrifugal unit includes the tubes.

[C]laim 16’s beginning and, in our view, controlling language could hardly be clearer. Claim 16 states: “A centrifugal unit comprising a centrifugal component and a plurality of tubes . . . .” It does not merely state the intended field of use in a preamble, as Haemonetics argues. Rather, it unambiguously defines “centrifugal unit” as “comprising” two structural components: a centrifugal component and a plurality of tubes. The claim then further recites, not the centrifugal component and not a centrifugal unit, but “the centrifugal unit” as “having a radius between 25 and 50 mm and a height between 75 and 125% of the radius.” Reading “the centrifugal unit” in the context of the dimensional limitations to refer exclusively to the vessel, as the district court did, ignores the antecedent basis for “the centrifugal unit,” and fails to give effect to the claim language “comprising a centrifugal component”.

. . .

The patentee’s inconsistent use of identical height and radius limitations for two different embodiments thus indicates that “the centrifugal unit” inthe context of the dimensional limitations must have different meanings in the context of different claims. (internal citations omitted)

The Massachusetts-based district court had reached the opposite conclusion. Based on the erroneous construction, the Federal Circuit vacated the jury verdict and remanded for a new application of the facts.

Multi-Track Examination: Enhanced Examination Timing Control Initiative

Patent,

The USPTO has published a request for comments that provides more detail on the potential multi-track examination timing initiative. (75 FR 31763). A public meeting will be held on July 20, 2010, 1:30 pm at the USPTO. Written comments must be submitted by August 20, 2010. Written comments, requests to attend the meeting, and requests to present at the meeting should all be sent to 3trackscomments@uspto.gov.

The potentially greatest impact of the proposal is directed toward applicants that claim foreign priority. In all such cases, the PTO is proposing that the office delay examination until the PTO receives a copy of the first office action and applicant reply from the foreign prosecution.

Under the initiative, for applications filed in the USPTO that are not based on a prior foreign-filed application (e.g., that do not claim foreign priority benefit), applicant would be able to: (1) Request prioritized examination (Track I); (2) for non-continuing applications, request a delay lasting up to 30 months in docketing for examination (Track III); or (3) obtain processing under the current procedure (Track II) by not requesting either (1) or (2). For applications filed in the USPTO that are based on a prior foreign-filed application, no action would be taken by the USPTO until the USPTO receives a copy of the search report, if any, and first office action from the foreign office and an appropriate reply to the foreign office action as if the foreign office action was made in the application filed in the USPTO. Following or concurrent with the submission of the foreign office action and reply, applicant may request prioritized examination or obtain processing under the current procedure.

….

While it is believed that most applicants will continue to file applications first in their national or regional office based on business needs or costs of translation, comment is also requested on whether the USPTO should anticipate a larger number of applications being filed at the USPTO first rather than an applicant’s national office. Additionally, would this filing pattern change if (as proposed in various patent law reform bills) a foreign filing date could be used as a prior art date under US law?

…

The instant proposal permits deferral of certain fees if Track III examination is requested. … [C]omments to this notice are requested on whether PTA should be limited by a request by applicant for deferred examination in the office of first filing. Similarly, comments are also requested on whether PTA should be limited if the applicant does not request accelerated examination in the office of first filing.

Prioritized Examination (Track I): For some applicants with a currently financed plan to commercialize or exploit their innovation or a need to have more timely examination results to seek additional funding, more rapid examination is necessary. While some programs are currently available to prioritize applications (e.g., the accelerated examination program and the petition to make special program), some applicants neither want to perform the search and analysis required by the accelerated examination program nor can they seek special status based on the conditions set forth in 37 CFR 1.102. For such applicants, the USPTO is proposing optional prioritized examination upon applicant’s request and payment of a cost recovery fee. A request for prioritized examination may be made in a USPTO first-filed application at any time and may be made in any other application only after receipt of a copy of the search report, if any, and first action on the merits from the intellectual property office in which the relied-upon application was filed and an appropriate reply to that action in the application filed in the USPTO. On granting of prioritized status, the application would be placed in the queue for prioritized examination.

The fee would be set at a level to provide the resources necessary to increase the work output of the USPTO so that the aggregate pendency of non-prioritized applications would not increase due to work being done on the prioritized application. The fee would also be set to recover any other additional costs associated with processing the prioritized application. For example, if work output is to be increased by hiring new examiners, then the fee for prioritized examination would include the cost of hiring and training a sufficient number of new employees to offset the production work used to examine prioritized applications. Under the USPTO’s current statutory authority, the USPTO is not permitted to discount the fee for small entity applicants. Should the USPTO’s authority to set fees be enhanced, it is anticipated that the USPTO would discount this fee for small and micro entity applicants, given the substantial fee that would need to be charged to recover all of the costs associated with the contemplated service.

The USPTO is also considering limiting the number of claims in a prioritized application to four independent and thirty total claims. In addition, the USPTO is considering requiring early publication of prioritized applications so that applications would be published shortly after a request for prioritization is granted, or eighteen months from the earliest filing date claimed, whichever is earlier.

All applications prioritized on payment of a fee, or accelerated or advanced out-of-turn under existing programs, would be placed in a single queue for examination on the merits and *31766 would be taken up out-of-turn relative to other new or amended applications. The goals for handling applications in this queue would be to provide a first Office action on the merits within four months and a final disposition within twelve months of prioritized status being granted. If this process is implemented, the USPTO anticipates that it would provide statistics on its progress in meeting these goals on its Internet Web site.

To maximize the benefit of this track, applicant should consider one or more of the following: (1) Acquiring a good knowledge of the state of the prior art to be able to file the application with a clear specification having a complete schedule of claims from the broadest that the applicant believes he is entitled in view of the state of the prior art to the narrowest that the applicant is willing to accept; (2) filing replies that are completely responsive to the prior Office action and within the reply period (shortened) set in the Office action; and (3) being prepared to conduct interviews with the examiner.

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An applicant-controlled up to 30-month queue prior to docketing (Track III): Some applicants file an application just prior to the statutory bar date but before a commercially viable plan for exploitation of the innovation has been developed or financed. To better provide for the timing of examination that such applicants desire and to provide a similar time period to that provided internationally, the USPTO is considering permitting any applicant in an application that does not claim benefit of a prior-filed foreign application or prior non-provisional application to select, on filing or in reply to a notice to file missing parts, an applicant-controlled up to 30-month queue prior to docketing for examination. In order to avoid delays in notice to the public, any application requesting Track III must also be published as an 18- month patent application publication. An application granted this status would be placed in a queue for applicant to request examination and pay the examination fee with the surcharge (if not already paid) within thirty months of the actual filing date of the application or any relied-upon provisional application (i.e., to which benefit is claimed under 35 U.S.C. 119(e)). Failure to request examination within the 30-month period would result in abandonment of the application. The request for examination and examination fee (and surcharge) would be due on the 30-month date but could be submitted early (e.g., on filing of the application) with a request that the application remain in the pre-examination queue for a period of time (e.g., up to 30 months from filing). On expiration of the time period, the application would be placed in the queue for examination.

On receipt of the request for this queue, the USPTO would determine if the application was ready for publication as a patent application publication (except for the receipt of the examination fee) and determine if any request for nonpublication made on filing had been rescinded. If both conditions were met, the application would be placed in a queue to await a request for examination and payment of the examination fee. If the application was not ready for publication, a requirement to place the application in condition for publication would be made and, once satisfied, the application would be placed in the 30-month queue. The request for examination and payment may be made at any time during the 30-month period. If no request is made within the 30-month period, the application would be held abandoned. The examination fee and the surcharge may be paid within the 30-month period or may be submitted after a timely request for examination is filed on notice of non-payment by the USPTO, along with any required extension of time fees.

Upon receipt of the examination request and fee, the application would be placed in the queue for examination, but the receipt date of the examination request would be used as the “date in queue.” Thus, the application will be taken up for examination as if the request date was the application’s actual filing date. If applicants determine that more rapid examination is desirable, then they may request (and pay the required fee) for prioritized examination while the application is in the queue for examination.

PTA Offset: Currently, the USPTO is considering a rule to offset any positive PTA accrued in a Track III application when applicant requests that the application be examined after the aggregate average period to issue a first Office action on the merits. For example, if the aggregate average time to issue a first Office action is 20 months and applicant requests that the application be examined at month 30, the proposed PTA reduction would be 10 months beginning on the expiration of the 20-month period and ending on the date on which applicant requested examination to begin. The overlap with the aggregate average period when the USPTO would not be able to have issued a first Office action on the merits would not be treated as an offsetting reduction.

PTA Offset for Foreign Delay: Similarly, for an application in any of the three tracks that claims foreign priority, the USPTO is considering a rule to offset positive PTA accrued in the application when applicant files the required documents (that include a copy of the search report, if any, and first office action from the foreign office and an appropriate reply to the foreign office action as if the foreign office action was made in the application filed at the USPTO) after the aggregate average period to issue a first Office action on the merits. For example, if the aggregate average time to issue a first Office action is 20 months and applicant submits the required documents 30 months after the filing of the application, then the proposed PTA reduction would be 10 months beginning on the expiration of the 20-month period and ending on the date of the filing of the required documents. Thus, delays by foreign offices beyond the aggregate average time for the USPTO to issue a first Office action on the merits would be an offsetting reduction against any positive PTA accrued by the delay in issuing a first Office action while the USPTO awaits the preparation of a search report and first action by the office of first filing.

In Tracks I and II, if the U.S. application claims the benefit of a prior-filed foreign application, and the relied-upon foreign application is abandoned prior to an action on the merits being made available, applicant must notify the USPTO and request that the application be treated for examination queuing purposes as if the foreign priority claim had not been made. The USPTO is considering making the failure to notify the USPTO within three months of the abandonment in the foreign office trigger a PTA offset as the USPTO would not appreciate the need to treat the application as if first-filed in the USPTO until such notice is given. Similarly, if the office of first filing has a practice of not producing actions on the merits, applicant would need to notify the USPTO that the application should be treated for examination queuing purposes as if the foreign priority claim had not been made.

Comments on one or more of the following questions would be helpful:

  1. Should the USPTO proceed with any efforts to enhance applicant control of the timing of examination?
  2. Are the three tracks above the most important tracks for innovators?
  3. Taking into account possible efficiency concerns associated with providing too many examination tracks, should more than three tracks be provided?
  4. Do you support the USPTO creating a single queue for examination of all applications accelerated or prioritized (e.g., any application granted special status or any prioritized application under this proposal)? This would place applications made special under the “green” technology initiative, the accelerated examination procedure and this proposal in a single queue. For this question assume that a harmonized track would permit the USPTO to provide more refined and up-to-date statistics on performance within this track. This would allow users to have a good estimate on when an application would be examined if the applicant requested prioritized examination.
  5. Should an applicant who requested prioritized examination of an application prior to filing of a request for continued examination (RCE) be required to request prioritized examination and pay the required fee again on filing of an RCE? For this question assume that the fee for prioritized examination would need to be increased above the current RCE fee to make sure that sufficient resources are available to avoid pendency increases of the non-prioritized applications.
  6. Should prioritized examination be available at any time during examination or appeal to the Board of Patent Appeals and Interferences (BPAI)?
  7. Should the number of claims permitted in a prioritized application be limited? What should the limit be?
  8. Should other requirements for use of the prioritized track be considered, such as limiting the use of extensions of time?
  9. Should prioritized applications be published as patent application publications shortly after the request for prioritization is granted? How often would this option be chosen?
  10. Should the USPTO provide an applicant-controlled up to 30-month queue prior to docketing for examination as an option for non-continuing applications? How often would this option be chosen?
  11. Should eighteen-month patent application publication be required for any application in which the 30-month queue is requested?
  12. Should the patent term adjustment (PTA) offset applied to applicant-requested delay be limited to the delay beyond the aggregate USPTO pendency to a first Office action on the merits?
  13. Should the USPTO suspend prosecution of non-continuing, non-USPTO first-filed applications to await submission of the search report and first action on the merits by the foreign office and reply in USPTO format?
  14. Should the PTA accrued during a suspension of prosecution to await the foreign action and reply be offset? If so, should that offset be linked to the period beyond average current backlogs to first Office action on the merits in the traditional queue?
  15. Should a reply to the office of first filing office action, filed in the counterpart application filed at the USPTO as if it were a reply to a USPTO Office action, be required prior to USPTO examination of the counterpart application?
  16. Should the requirement to delay USPTO examination pending the provision of a copy of the search report, first action from the office of first filing and an appropriate reply to the office of first filing office action be limited to where the office of first filing has qualified as an International Searching Authority?
  17. Should the requirement to provide a copy of the search report, first action from the office of first filing and an appropriate reply to the office of first filing office action in the USPTO application be limited to where the USPTO application will be published as a patent application publication?
  18. Should there be a concern that many applicants that currently file first in another office would file first at the USPTO to avoid the delay and requirements proposed by this notice? How often would this occur?
  19. How often do applicants abandon foreign filed applications prior to an action on the merits in the foreign filed application when the foreign filed application is relied upon for foreign priority in a U.S. application? Would applicants expect to increase that number, if the three track proposal is adopted?
  20. Should the national stage of an international application that designated more than the United States be treated as a USPTO first-filed application or a non-USPTO first-filed application, or should it be treated as a continuing application?
  21. Should the USPTO offer supplemental searches by IPGOs as an optional service?
  22. Should the USPTO facilitate the supplemental search system by receiving the request for supplemental search and fee and transmitting the application and fee to the IPGO? Should the USPTO merely provide criteria for the applicant to seek supplemental searches directly from the IPGO?
  23. Would supplemental searches be more likely to be requested in certain technologies? If so, which ones and how often?
  24. Which IPGO should be expected to be in high demand for providing the service, and by how much? Does this depend on technology?
  25. Is there a range of fees that would be appropriate to charge for supplemental searches?
  26. What level of quality should be expected? Should the USPTO enter into agreements that would require quality assurances of the work performed by the other IPGO?
  27. Should the search be required to be conducted based on the U.S. prior art standards?
  28. Should the scope of the search be recorded and transmitted?
  29. What language should the search report be transmitted in?
  30. Should the search report be required in a short period after filing, e.g., within six months of filing?
  31. How best should access to the application be provided to the IPGO?
  32. How should any inequitable conduct issues be minimized in providing this service?
  33. Should the USPTO provide a time period for applicants to review and make any appropriate comments or amendments to their application after the supplemental search has been transmitted before preparing the first Office action on the merits?

Calculating Patent Term

Patent

Does anyone have a process flow-chart that they could send to me to use when determining whether an issued patent is still in force? The process includes at least:

  1. Calculate the original patent term — May be 20 years from fililing date or 17 years from issue date depending upon the timing of the application and issuance. 
  2. Calculate any term adjustment for PTO delays (PTA +).
  3. Calculate any term adjustment for regulatory approval delays (PTE).
  4. Determine whether there are any terminal disclaimers and, if so, calculate the term of the linked-to patent. 
  5. Determine whether patent term has been disclaimed for any other reason.
  6. Determine whether clams were eliminated or changed based on reexamination or reissue.
  7. Determine whether the patent has been found invalid or unenforceable by a court of law.

Thanks!

Dennis Crouch (dcrouch@patentlyo.com)