Professor Kristen Osenga (Richmond) has written a new essay for the Patently-O Patent Law Journal entitled The Patent Office’s Fast Track Will Not Take Us in the Right Direction, 2010 Patently-O Patent L.J. 89. In a 2005 article, Professor Osenga proposed a multi-tiered approach to patent examination. In her Patently-O essay, Professor Osenga explains why her suggestions are “better than the system proposed by the Patent Office.”
The USPTO is in the midst of considering a new multi-track examination system that would offer patent applicants options to choose between fast-track “prioritized” examination, ordinary examination, and delayed examination. It is expected that applicants choosing the fast-track will be required to pay an additional fee while applicants choosing delay will pay a reduced application fee. Small entities would continue to pay half-price regardless of their choice. [WSJ Article by Amy Schatz]
The PTO is expected to release a request for comments later this week and to hold a public meeting this summer before implementing the program in early 2011.
The 750,000 backlog of pending patent applications is tolerated largely because so many of the pending applications relate to inventions that are not urgent. Rather, companies and inventors tend to file for patent protection well before a market develops or a marketable product exists. In those situations, applicants are not upset by PTO delay because that delay saves the company from making cash expenditures. In the short-run, the delay pushes-off potential lawyer and PTO fees. In the longer run, the delay provides an opportunity for patent applicants to cull their portfolio with either the invention or its marketability fail to be realized. Here at the University of Missouri, for instance, the usual approach is to file a lower-cost provisional patent application that is then followed by a more-costly non-provisional application once the value of the invention is more assured — this is an approach frequently followed for US-originated inventions.
Of course, with the current backlog, patent applicants are delayed regardless of whether they want delay. And sometimes it is important to quickly obtain patent protection — perhaps to protect an emerging market or to satisfy potential investors. A major problem with the current system is that the backlog delays everyone and there is no easy mechanism to speed-up the process.
On this point, the Wall Street Journal Quoted Director Kappos: “Not every application needs to go at the same speed. Some need to go fast and some need to go more slowly. . . . By allowing applicants some control over the timing of examination, USPTO resources would be better aligned with the needs of innovators. We look forward to the public’s comments on this proposal.” In the same article, I am quoted as saying “I have some hope that the Three-Track program will be helpful.”
The fast-track The PTO believes that many of the delayed applications will be abandoned by the applicant prior to paying the fee to re-enter the examination process.
Several issues need to be worked-out before the program is implemented: [More to come…]
Bilski Watch: Dissenting & Concurring Opinions: In discussing the timing of Bilski v. Kappos, several commentators suggested that the delay might indicate (1) that the court will issue multiple opinions (concurrences or dissents); or (2) that the decision will be especially long.
Based on the 18–previous patent decisions, neither of those suggestions hold much water. Namely, the argument-to-decision delay appears to be negatively correlated with the number of dissenting and/or concurring opinions. Likewise, the number of pages in the decision does not appear to have any correlation with the delay.
In Therasense, the en banc Federal Circuit is poised to consider fundamental questions of the law of inequitable conduct. Some members of the court have called the doctrine’s current state a “scourge” and a “plague” on the patent system because inequitable conduct is alleged in so many patent cases.
I searched LexisNexis for federal district court and appellate decisions that mention the term “inequitable conduct” and used those results to create the time-series charts below. As the charts demonstrate, the number of decisions discussing inequitable conduct has continued to dramatically rise even after the Federal Circuit’s 1988 Kingsdown decision.
In his recent article, Professor Mammen analyzed the prevalence inequitable conduct by looking at federal court complaints (inter alia). [Read Mammen’s article] I compiled his data into the following chart that shows the dramatic rise in the percentage of patent lawsuits where inequitable conduct is pled (typically in the answer as a defense to charges of patent infringement.) Mammen article suggests that the chart below is a conservative calculation (because pleadings are difficult to find and search) and that the actual frequency of inequitable conduct allegations may reach to 60% of patent lawsuits.
Chief Judge Rader: Federal Circuit Judge Randall Rader is now Chief Judge Randall Rader. Chief Judge Rader was appointed to the Court of Federal Claims by President Reagan and to the Federal Circuit by George HW Bush in 1990. The Chief Judge position rotates at least once every seven years.
Chief Judge Mayer: Today, the court released information that Judge Haldane Mayer will be moving to senior status at the end of June 2010. Judge Mayer was Chief Judge of the Federal Circuit from 1997–2004.
Nominees: Judge Kathleen O’Malley and Edward DuMont have been nominated to fill the slots left open by Judge Schall and Chief Judge Michel. Although both are expected to be confirmed, the Senate has not moved on either nominee.
Next Nominee: President Obama now has the opportunity to for his third nominee for the Court.
The US Patent world continues to await the Supreme Court’s decision in Bilski v. Kappos. The case was argued on November 9, 2009 — 204 days ago. Professor Joe Miller (Lewis & Clark) looked at the timing of 18 other recent Supreme Court patent decisions and concludes: “if you feel like you’ve been waiting a long time to see the Bilski opinion, it’s because you *have* been waiting a longer time than usual.”
The chart below is based on Prof. Miller’s data and reports the number of days elapsed from the oral argument to the release of the decision for each case. The average delay is about 90 days (median of 77 days). As seen in the chart, Bilski has the longest delay (and that delay continues to grow). A decision in Bilski is expected by June 28, 2010.
In the common law tradition, virtually every written opinion from the Federal Circuit cites to prior precedent. I looked at the past few years of Federal Circuit decision to discover the most cited patent cases.
The following list is ranked based on citations found in Federal Circuit patent decisions that were decided January 1, 2007 – May 26, 2010. The ranking is a combined score of both (1) the number of times a case was cited and (2) the depth-of-analysis associated with the citation. I excluded non-patent cases from the list.
Phillips v. AWH Corp., 415 F.3d 1303 (Fed.Cir. 2005).
Transition: May 31 is Chief Judge Paul Michel’s last day on the bench. Judge Randall Rader will become the next Chief Judge of the Court of Appeals for the Federal Circuit.
The Court today released two interesting patent opinions authored by the Chief: Dow Jones v. Ablaise (finding patent invalid as obvious) and Leviton v. Universal Security Instruments (vacating summary judgment of inequitable conduct).
There are several pending en banc cases, including Princo v. ITC (patent pools and antitrust), Hyatt v. Kappos (Admissibility of new evidence in a Section 145 action), Therasense v. BD (standards of inequitable conduct), and TiVo v. EchoStar (contempt proceedings against adjuged infringer who introduced new infringing products).
Combinatorics: With Chief Judge Michel gone, it may be more difficult for en banc panels to overturn prior precedent. With Chief Judge Michel, the court has 11 members and needs a 6–judge majority to overturn prior precedent. Without the Chief, the court will have only 10 members but will still need 6–judges for such a “majority.” With the 11–judge panel, half of the potential outcomes result in majority panel sufficient to overturn prior precedent. With a 10–judge panel, only 38% of the potential outcomes have the same result. (This assumes a binary yes/no on the potential majority position). Chief Judge Michel is particularly important because of his tendancy to side with the majority. In the past decade, Judge Michel has filed fewer dissinting opinions than any other Judge on the Circuit except for Judge Moore (who has only been on the bench for three years). (Judge Newman has filed the most dissenting opinions.)
Next Vacancies: Several other Federal Circuit judges are currently eligible to take senior status. These include Judges Newman, Mayer, Lourie, Gajarsa, and Dyk. Judge Byrson will be eligible in August 2010.
Next Chief Judge After Judge Rader: Judge Kimberly Moore sits as the heir apparent following Judge Rader — assuming that he remains Chief Judge for a full seven years. If Judge Rader vacates the Chief position within six-years, Judge Prost would become Chief.
[JOTWELL] Many of us enjoy legal theory of all sorts (even that outside of patent law) but we do not have time to sift through the several thoursand law review articles published each year.
A new project headed by Professor Michael Froomkin (Miami) focuses attention on legal scholarship that is new and noteworthy — and does so in digestable 1,000 word essays.
[Patent Utility Redux] In a recent JOTWELL essay, Professor John Duffy (GWU) discusses a new article by Professer Michael Risch (soon to be Villanova). Risch’s article is titled Reinvinting Usefulness and is forthcoming in the BYU Law Review (SSRN Draft). Duffy writes:
Michael Risch reexamines patent utility doctrine and advances creative and insightful arguments for requiring that all inventions demonstrate “commercial utility” prior to patenting. The highest compliment I can pay this article is not that I agree with it—I’m still somewhat doubtful—but that the article has forced me to think hard about an area I foolishly thought to be largely barren. The article is memorable precisely because its thesis is unsettling; it demands rethinking of utility doctrine and other aspects of the patent law.
Enzo Biochem and Yale University v. Applera Corp. (Fed. Cir. 2010)
The district court initially held Enzo’s patent claims invalid as indefinite because of the ill-defined term “not interfering substantially.” On appeal, the Federal Circuit reversed — finding that the someone of skill in the art “would understand what is claimed.”
Applera requested a panel rehearing and rehearing en banc which the Federal Circuit recently denied. However, as part of that denial, Judge Plager penned an important dissent — arguing that indefiniteness law should be given more teeth and that claim construction commands too large of a role in the litigation process.
“In my view, this court’s definiteness doctrine could go considerably further in promoting that objective than it currently does, with the not inconsequential benefit of shifting the focus from litigation over claim construction to clarity in claim drafting. . . . The court now spends a substantial amount of judicial resources trying to make sense of unclear, over-broad, and sometimes incoherent claim terms. It is time for us to move beyond sticking our fingers in the never-ending leaks in the dike that supposedly defines and figuratively surrounds a claimed invention. Instead, we might spend some time figuring out how to support the PTO in requiring that the walls surrounding the claimed invention be made of something other than quicksand.”
Read the full dissent here:
Judge Plager: I respectfully dissent from the denial of the petition for panel rehearing on the question of indefiniteness.
Despite the varying formulations that this court has used over the years in describing its “indefiniteness” jurisprudence . . . , the general conclusion from our law seems to be this: if a person of ordinary skill in the art can come up with a plausible meaning for a disputed claim term in a patent, that term, and therefore the claim, is not indefinite. At least not so indefinite as to run afoul of the statutory requirement that claims shall “particularly point[ ] out and distinctly claim[ ] the subject matter which the applicant regards as his invention.” 35 U.S.C. § 112, second paragraph.
The corollary derived from this understanding is that if several persons of ordinary skill come up with competing but plausible interpretations of a disputed terms is typically the case with competing “expert witnesses” in patent infringement litigation—the problem is not one of an inherently ambiguous and potentially indefinite claim term, but rather the problem becomes simply one of picking the “right” interpretation for that term. Since picking the “right” interpretation—claim construction—is a matter of law over which this court rules, and since the view of the trial judge hearing the case is given little weight, so that the trial judge’s view on appeal becomes just a part of the cacophony before this court, it is not until three court of appeals judges randomly selected for that purpose pick the “right” interpretation that the public, not to mention the patentee and its competitors, know what the patent actually claims. The inefficiencies of this system, and its potential inequities, are well known in the trade.
The United States Patent and Trademark Office (“PTO”), by contrast, appears to be taking steps to give the statutory requirement real meaning. In 2008, the patent examining corps was given a five-page instruction on “Indefiniteness rejections under 35 U.S.C. 112, second paragraph.” The memo initially observes that “[t]he primary purpose of the definiteness requirement for claim language is to ensure that the scope of the claims is clear so that the public is informed of the boundaries of what constitutes infringement of the patent.” The memo reviews in detail a recent opinion of this court, following which the memo states the position of the PTO: “If the language of a claim, considered as a whole in light of the specification and given its broadest reasonable interpretation, is such that a person of ordinary skill in the relevant art would read it with more than one reasonable interpre-tation then a rejection of the claim under 35 U.S.C. 112, second paragraph, is appropriate.”
This memo was followed later in the year by a rare precedential opinion issued by the Board of Patent Appeals and Interferences (“Board”) in Ex parte Miyazaki. The Board noted that this court has in post-issuance patent infringement cases held “that the definiteness requirement ‘does not compel absolute clarity’ and ‘[o]nly claims “not amenable to construction” or “insolubly am-biguous” are indefinite.’” Recognizing that this court has never set forth a different standard of review for indefiniteness under 35 U.S.C. § 112, second paragraph, for pre-issuance pending claims as compared with post-issuance patent claims, the Board concluded that the Federal Circuit’s reading of the indefiniteness requirement was counter to the PTO’s broader standard for claim construction during prosecution. Accordingly, the Board announced that, “rather than requiring that the claims are insolubly ambiguous, we hold that if a claim is amenable to two or more plausible claim constructions, the USPTO is justified in requiring the applicant to more precisely define the metes and bounds of the claimed invention by holding the claim unpatentable under 35 U.S.C. § 112, second paragraph, as indefinite.”
The Board is clearly right in recognizing that the circumstances are different between pre-issuance and post-issuance application of the definiteness standard with regard to claim terms. At the same time, the PTO and the Board are clearly right in insisting that, if the public notice function of the patent law is to be honored, claim terms must particularly point out and distinctly claim the subject matter of the invention. In my view, this court’s definiteness doctrine could go considerably further in promoting that objective than it currently does, with the not inconsequential benefit of shifting the focus from litigation over claim construction to clarity in claim drafting.
To begin the discussion of how this court could move in that direction, I would grant the petition for panel rehearing. The court now spends a substantial amount of judicial resources trying to make sense of unclear, over-broad, and sometimes incoherent claim terms. It is time for us to move beyond sticking our fingers in the never-ending leaks in the dike that supposedly defines and figuratively surrounds a claimed invention. Instead, we might spend some time figuring out how to support the PTO in requiring that the walls surrounding the claimed invention be made of something other than quicksand.
I respectfully dissent from the loss of that opportunity through the panel’s denial of rehearing.
Substantially: As a claim limitation, “substantially” is being used less frequently than ever before. The chart below shows the percentage of issued patents that include “substantially” as a claim limitation. The data is grouped accourding to the patent issue year. (For the 1980’s and 1990’s, I grouped the data by decade.)
The following graph is based on the file histories of about 25,000 utility patent applications from the past few years. I looked to find the percent that were issued as compared to the total number of disposals (issued patents + abandoned applications). I grouped the results according to the technology center associated with the respective patent examiner.
Over the past few weeks, I have been reporting on the dramatic rise in the number of patents being issued by the USPTO each week. That trend continues. In the past three weeks, the USPTO has granted more utility patents than in any three week period in history — at a rate more than 40% greater than in 2009.
Kyle Jensen of PriorSMart reports on an interesting phenom: For the first-time, the number of issued patents exceeds the number of published applications.
Orion sued Hyundai and twenty other automobile manufacturers for infringement of its patent covering a “computer-assisted parts sales method.” The invention took computer and database technology available in 1988 and applied that technology to a specific solution. All of the defendants settled except Hyundai who was stuck with a $34+ million verdict jury. On appeal, the Federal Circuit reversed — holding that the asserted patent is invalid as anticipated by a promotional publication for an electronics parts catalog. Note, this post deals with the anticipation issues. I will discuss inequitable conduct in a separate post.
The asserted prior art is a brochure for the IDB2000 system that was distributed by Bell & Howell at least one year prior to the Orion priority date.* [DTX133.pdf (5979 KB)] The brochure does not specifically state that the system generates a customer proposal as required by claim 1 of Orion’s patent. However, at trial, Hyundai presented evidence that the IDB2000 system was “designed to, and did” generate customer proposals. The Federal Circuit latched-onto this testimony regarding the prior art system and used it to expand the coverage of the prior art brochure — holding that the “testimonial and documentary evidence regarding the Electronic Parts Catalog reference establish that the Electronic Parts Catalog reference anticipates claim 1 of the ’627 patent.”
I have genuine problems with the analysis in this opinion. The appellate panel expanded the scope of the asserted anticipatory prior art reference by relying on testimonial evidence of how the associated system was used at the time. There are two separate problems. First, the scope of a “printed publication” should be examined for what it disclosed to one of skill in the art rather rather than to how underlying prior art systems were used at the time. Contemporaneous use would be important for an analysis of whether the invention was “in public use” more than one year before the filing date. However, this decision’s doctrinal focus is solely on anticipation by the prior art brochure as a printed publication. If the IDB2000 system itself anticipated the patent then the defendants should have presented evidence under the public use prong of 102(b). The second problem with the court’s decision is that the oral testimony relied on here opens the door to potentially self-serving testimony that is not ordinarily allowed in invalidity/priority proceedings because it does not satisfy the clear and convincing standard.
* The asserted prior art reference was apparently printed after the Orion filing date. However, Hyundai presented oral testimony that a very similar brochure had been distributed earlier.
Chief Judge Paul Michel will be retiring from the bench later this month after more than twenty-two years on the bench and five as the chief judge. He recently offered his annual “state of the court” address at the court’s annual judicial conference. [Read Judge Michel’s remarks].
As Chief, Judge Michel has taken a specific interest in ensuring that the court runs efficiently and quickly. His remarks:
By every measure our decisions continue to be issued more rapidly. As a result, our inventory of pending appeals has dropped from over 1,400 just a few years ago to only 819 as of April 30. Indeed, as of October 1, 2009 it was 897, so the reductions continue.
One benefit is that we hear cases more quickly. In Fiscal year 2006, for example, only 49% of ready cases could be scheduled for argument without delay. By last year, the number was 84%. This year it will likely rise even further.
Another metric we watch is the percentage of appeals decided within 90 days of argument. This number has ranged recently from 75 to 83%. Likely it will reach 85% this year.
Judge Michel also briefly discussed the pending en banc cases:
Last October we agreed to rehear en banc Princo v. ITC, involving a patent misuse defense based on a patent pool licensing agreement. Argument was held in March. [This case was argued by Edward DuMont. DuMont has been nominated to fill Judge Michel’s place on the bench]
In February, we granted rehearing en banc in Hyatt v. Kappos, asking the parties to brief any limitations on admissibility of evidence in § 145 patenting actions in district court. Argument is scheduled for July 8.
In March, we agreed to rehear Slattery v. United States, a Winstar case, asking whether the FDIC is a non-appropriated funds instrumentality and how the answer to that affects the jurisdiction of the Court of Federal Claims.
In April we granted rehearing en banc in Therasense v. Becton, Dickinson, in which we will reconsider the standards for determining inequitable conduct.
This month, we granted rehearing in TiVo v. Echostar, concerning when contempt proceedings are appropriate as opposed to a new infringement trial on a product that has been altered after the original was found to infringe.
And of course all eyes are on the impending decision in In Re Bilski, concerning the test for patent eligibility.
Although stepping-down from the bench, Chief Judge Michel is “not retiring, but merely changing mission.” He reports that he expects to play a greater role for campaigning for stronger support the courts and USPTO and may also spend some time as a mediator.
Trademark / Antitrust: The Supreme Court has ruled against the National Football League (NFL) in an antitrust suit involving the NFL’s exclusive apparel licensing deal with Reebok/Adidas. The court held that the NFL was not a single business entity, but rather 32 separate business entities. Any antitrust violation involves an underlying market. Here, the supreme court identified that as the market for intellectual property: “Directly relevant here, the teams are potentially competing suppliers in the market for intellectual property. When teams license such property, they are not pursuing the common interests of the whole league, but, instead, the interests of each corporation itself.” In Princo, the Federal Circuit is now considering antitrust issues in the scope of patents and standard-setting organizations. [Read NFL v. American Needle] [Read about Princo v. ITC]
The Chisum Patent Academy is offering its second annual Intensive Patent Law Training Workshop in Seattle on July 29-31, 2010. See http://www.chisum-patent-academy.com. The workshop will focus on substantive patent law (patentability and enforcement) through analysis of critical Federal Circuit and Supreme Court decisions. [Syllabus for 2009 workshop]. New material for 2010 likely include business method patentability post-Bilski, written description requirement compliance post-Ariad, and the evolving landscape of inequitable conduct as reflected by the Federal Circuit’s recent grant of rehearing en banc in Therasense. The workshop is team-taught in seminar style (maximum of 10 students) by Donald Chisum, author of the treatise Chisum on Patents, and Professor Janice Mueller, author of Patent Law, 3d Edition (Aspen 2009). Chisum and Mueller have a combined total of over 40 years experience teaching patent law. The workshop’s coverage is geared for junior patent attorneys, summer associates, engineers, scientists, paralegals, information specialists, and attorneys experienced in non-patent fields who desire an intensive introduction to patent law. Eighteen hours of CLE credit have been applied for.
USPTO News:
The USPTO is further developing its patent prosecution highway and has eliminated the associated fee. [Link]
Green Technology: The USPTO has expanded the number of technology classes that count as “green technology” and that are therefore eligible for expedited processing. [Link]
Kathy Bates on NBC as a former patent attorney. Best quote of the clip is 30–seconds-in.
Trademark / Antitrust: The Supreme Court has ruled against the National Football League (NFL) in an antitrust suit involving the NFL’s exclusive apparel licensing deal with Reebok/Adidas. The court held that the NFL was not a single business entity, but rather 32 separate business entities. Any antitrust violation involves an underlying market. Here, the supreme court identified that as the market for intellectual property: “Directly relevant here, the teams are potentially competing suppliers in the market for intellectual property. When teams license such property, they are not pursuing the common interests of the whole league, but, instead, the interests of each corporation itself.” In Princo, the Federal Circuit is now considering antitrust issues in the scope of patents and standard-setting organizations. [Read NFL v. American Needle] [Read about Princo v. ITC]
The Chisum Patent Academy is offering its second annual Intensive Patent Law Training Workshop in Seattle on July 29-31, 2010. See http://www.chisum-patent-academy.com. The workshop will focus on substantive patent law (patentability and enforcement) through analysis of critical Federal Circuit and Supreme Court decisions. [Syllabus for 2009 workshop]. New material for 2010 likely include business method patentability post-Bilski, written description requirement compliance post-Ariad, and the evolving landscape of inequitable conduct as reflected by the Federal Circuit’s recent grant of rehearing en banc in Therasense. The workshop is team-taught in seminar style (maximum of 10 students) by Donald Chisum, author of the treatise Chisum on Patents, and Professor Janice Mueller, author of Patent Law, 3d Edition (Aspen 2009). Chisum and Mueller have a combined total of over 40 years experience teaching patent law. The workshop’s coverage is geared for junior patent attorneys, summer associates, engineers, scientists, paralegals, information specialists, and attorneys experienced in non-patent fields who desire an intensive introduction to patent law. Eighteen hours of CLE credit have been applied for.
USPTO News:
The USPTO is further developing its patent prosecution highway and has eliminated the associated fee. [Link]
Green Technology: The USPTO has expanded the number of technology classes that count as “green technology” and that are therefore eligible for expedited processing. [Link]
Kathy Bates on NBC as a former patent attorney. Best quote of the clip is 30–seconds-in.
The USPTO issued more patents during the past two weeks than in any fortnight in history. A primary driver of that upswing appears to be a dramatic rise in the allowance rate. This change is demonstrated in the chart below.
Methods: The chart is based on 4,400 patent applications that have either been abandoned or issued as patents – i.e., “disposed of.” The allowance rate was calculated for each quarter based on the disposal date. Only published applications were used.
The graph above is similar to the PTO allowance rate chart seen below through the end of FY2008. (As with the PTO pink line below, my chart does not count RCE filings as abandoned cases.)
Grant Rate: The USPTO’s high patent grant numbers continue. The past two weeks respectively rank Nos. 1 and 2 in terms of the most patents granted in a single week in US history.
USPTO Application Exchange: The USPTO has announced that it is opening its “application exchange program” to all applicants. Any applicant with at least two pending applications can “receive expedited review of one application in exchange for withdrawing an unexamined application.” For 2010, the program will be limited to 15 applications per entity. Applicants with questions may contact Pinchus Laufer (Office of the Associate Commissioner for Patent Examination Policy) Pinchus.Laufer@uspto.gov.
PTO/DOJ/FTC Workshop on May 26th at the USPTO. The FTC’s work and report on problems in the patent system has been a driving force behind many of the proposed patent reform initiatives over the past several years. Later this month, the FTC will be joining the PTO and DOJ for a workshop on the role of intellectual property in competitive markets. Particular topics include PTO Reform (quality and timing); Permanent Injunctions and the ITC; and Standard Setting. Webcast available. [Link]
Ombudsman Program: The PTO has implemented a new ombudsman program intended to help applicants who feel that the ordinary prosecution process has broken-down. [Link] I would like to hear any comments on the value of the program.
The USPTO is in the midst of considering a new multi-track examination system that would offer patent applicants options to choose between fast-track “prioritized” examination, ordinary examination, and delayed examination. It is expected that applicants choosing the fast-track will be required to pay an additional fee while applicants choosing delay will pay a reduced application fee. Small entities would continue to pay half-price regardless of their choice. [
Thus, about 10% of applications filed in 2004 are still pending while over 60% of those filed in 2007 are still pending. 
