Patently-O Bits and Bytes

Patent
  • 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.

— Dennis

Defending Yourself in Inequitable Conduct Proceedings

Patent,

An en banc rehearing is now pending before the Federal Circuit in the case of Therasense (Abbott) v. BD. The case focuses on questions of patent unenforceability due to the patentee’s inequitable conduct during prosecution.  The court opinions focus on the actions of Mr. Lawrence S. Pope who was the attorney responsible for prosecution of the asserted patent.  The district court held that pope “acted with specific intent to deceive” the patent examiner and the USPTO. Based on that finding, Pope has been investigated by both the PTO Office of Enrollment & Discipline (OED) and the Illinois Attorney Registration and Disciplinary Commission (ARDC).

There is no doubt that the finding of intentional deception has substantially and negatively impacted Mr. Pope.  As a pro-active attorney, Mr. Pope (who is no longer with Abbott) attempted to intervene in the case to defend his own record. After receiving briefs on the motion to intervene, the Federal Circuit denied the request. 

Writing as the motions judge, Judge Gajarsa wrote:

Pope asserts that he meets the standards for intervention, i.e., that he has a substantial interest in the appeal, that his interests will not be adequately represented by Abbott, and that intervention will not cause any undue delay or harm. . . . In Nisus Corporation v. PermaChink Systems, Inc., 497 F.3d 1316, 1319-20, 1322-23 (Fed. Cir. 2007), we affirmed a district court's denial of a motion to intervene by an attorney who had prosecuted a patent and who sought to challenge factual findings concerning his conduct that were related to a finding of unenforceability. We expressly distinguished Penthouse Int'l because it involved an attorney who sought to intervene after a district court sanctioned the attorney and directed the attorney to pay a sanction. In this case, Pope has shown no similar type of sanction. Nisus, 497 F.3d at 1319 ("Critical comments, such as in an opinion of the court addressed to the issues in the underlying case, are not directed at and do not alter the legal rights of the nonparty.").

Documents:

Patenting Numbers

Patent

Two interesting statistics that came-out in today’s USPTO Roundtable on Patent Quality:

  • The number of examiner interviews have increased 60% over last year.
  • The action-per-disposal rate has fallen from about 2.9 actions-per-disposal to 2.3 actions-per-disposal as compared with last year.

Chien: Recent History Suggests that Supreme Court will Rule Bilski’s Claim Unpatentable

Patent,

Professor Colleen Chien (Santa Clara) has written an interesting new article on the importance of amicus briefs in patent cases. Her article is titled Patent Amicus Briefs: What the Courts’ Friends Can Teach Us About the Patent System and is available online at SSRN.

Bilski v. Kappos: Professor Chien reminded me that as Solicitor General, Elena Kagan authored both the US government’s merits brief in Bilski case arguing that Bilski’s claim is unpatentable and the US government’s brief opposing cert. The article reports that “in the last 20 years, every single amicus brief authored by the US Government in a Supreme Court patent case except one predicted the case outcome.” Chien writes “If history is any indication, the Supreme Court will almost certainly follow the US Government’s lead and rule that the method is unpatentable and likely adopt some of its reasoning as well.” (Note that Bilski is a bit different because the Government is a party).

The abstract:

Over the last two decades, more than 1500 amici, representing thousands of organizations, companies, and individuals, have signed onto amicus briefs in over a hundred patent cases, many of them representing landmark decisions. This paper turns the spotlight on these “behind-the-scenes” actors in the patent system. It combines theoretical insights with an empirical study of amicus briefs filed in patent cases over the last 20 years in an examination of who is interested in the patent system, the positions they have advocated, and the effectiveness of their advocacy. Amicus filers have been instrumental in shaping the courts’ agenda; the Supreme Court was seven times more likely to grant cert, and the Federal Circuit eight times likely grant a petition for en banc rehearing, if urged to by an amicus. However, while certain briefs have been important, overall the balance of briefs on the merits have not had a measurable impact on the courts’ rulings. One exception has been the briefs of the US Government, which have been exceptionally prescient. Over the 20 years studied, every single amicus brief authored by the US Government in a Supreme Court patent case except one predicted the case outcome. That is to say, in almost all cases, the Court affirmed or rejected the lower court holding when the Government told it to, and in one case, dismissed cert as improvidently granted when the Government recommended doing so. In terms of who files briefs and their agenda, the results are somewhat surprising. Although debates about the patent system are usually cast as a fight between the pharmaceutical and hi-tech industries, patent lawyers comprise a powerful interest group, filing the most briefs of any single group. In addition, among companies, what seems largely to determine how they advocate is their business model – non-practicing entities, for example, nearly always weighed in for the patentee and public companies, often against the patentee. These and other results have implications for those seeking to understand the patent system and those seeking to influence it.

Download the article.

Bits and Bytes: Cybaris

Patent

William Mitchell’s new IP Journal “Cybaris” recently published its first issue. Each article is accopmanied by a videotaped interview and discussion with the author(s). Readers may also leave comments on the site.  The first issue includes:

  • A complete version the Matrix for Changing First-To-Invent by Brad Pedersen & Justin Woo that was originally discussed on Patently-O [Link]
  • Trying to Agree on Three Articles of Law: The Idea/Expression Dichotomy in Chinese Copyright Law by Stephen McIntyre [Link]
  • Buffering and the Reproduction Right: When is a Copy a Copy? by Steven Foley [Link]
  • Note: The Best of Intentions: Why the Proposed Changes to the Canadian Access to Medicines Regime Should Not Be Implemented by Carly L. Huth [Link]
  • Note: In Defense of TRIPs: It Only Seems Imperialistic by Anthony R. Noss [Link]
    Note: The Statutory Damages Regime of Copyright Law: The Non-Commercial User and Capitol Records, Inc v. Thomas-Rasset by Heather N. Kjos [Link]

En Banc Federal Circuit: Adjudged Infringers and their “New” Products

Patent

TiVo v. EchoStar (Fed. Cir. 2010)

The Federal Circuit has announced an en banc rehearing of the TiVo appeal focusing on the process of chasing-down defendants to enforce an injunction — especially where the defendant has introduced a new device that is arguably infringing.  The patentee here has asked that the enforcement operate through a contempt proceeding while the accused infringer has demanded a new trial on the merits for the new device.

The questions on appeal include:

a) Following a finding of infringement by an accused device at trial, under what circumstances is it proper for a district court to determine infringement by a newly accused device through contempt proceedings rather than through new infringement proceedings? What burden of proof is required to establish that a contempt proceeding is proper?

b) How does “fair ground of doubt as to the wrongfulness of the defendant’s conduct” compare with the “more than colorable differences” or “substantial open issues of infringement” tests in evaluating the newly accused device against the adjudged infringing device? See Cal. Artificial Stone Paving Co. v. Molitor, 113 U.S. 609, 618 (1885); KSM Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1532 (Fed. Cir. 1985).

c) Where a contempt proceeding is proper, (1) what burden of proof is on the patentee to show that the newly accused device infringes (see KSM, 776 F.2d at 1524) and (2) what weight should be given to the infringer’s efforts to design around the patent and its 2009-1374 2 reasonable and good faith belief of noninfringement by the new device, for a finding of contempt?

d) Is it proper for a district court to hold an enjoined party in contempt where there is a substantial question as to whether the injunction is ambiguous in scope?

On-point amicus briefs are welcomed.

 

Inequitable Conduct: Forming the Doctrinal Boundaries

Patent

TALtechTaltech v. Esquel Enterprises (Fed. Cir. 2010)

After a prior remand, the W.D. Washington district court held Taltech’s patent unenforceable due to inequitable conduct during prosecution and awarded over $6 million in attorney fees and costs to the defendant.

Section 285 of the patent statute allows a prevailing party to obtain reasonable attorney fees in “exceptional cases.” Typically, exceptional cases involve misconduct during either prosecution or litigation. Here, the lower court found three independent grounds for finding an exceptional case: (1) Taltech’s inequitable conduct in failing to disclose a prior-art raincoat seam to the PTO (labeled the “undisclosed raincoat seam” or URS); (2) Taltech’s inequitable conduct in misrepresenting the double top-stitch seam; and (3) abusive litigation tactics.  On appeal, the Federal Circuit (Judges Mayer and Friedman) found no clear error with the lower court ruling.

PatentLawPic988The compelling element of the decision comes from Judge Gajarsa’s dissent:

This case exemplifies the ongoing pandemic of baseless inequitable conduct charges that pervade our patent system. For the reasons stated below, I respectfully dissent from the majority opinion.

Defendants’ inequitable conduct claim rests on a handmade drawing that the inventor, John Wong, sketched on a piece of paper during his deposition. Defendants’ counsel requested that Wong draw the prior art that “inspired” him to experiment in making pucker-free seams in dress shirts. In response, he sketched a prior art seam used to waterproof raincoats manufactured in the TAL factory. During litigation, Wong’s drawing was labeled the “Undisclosed Raincoat Seam” (“URS”). After a bench trial, the district court found that Wong committed fraud on the U.S. Patent and Trademark Office (“PTO”) because he failed to disclose the URS as the “inspiration” for his invention. 

We vacated the inequitable conduct finding on the first appeal because there is no legal requirement that an inventor disclose the “inspiration” for his invention to the PTO. We remanded the case for a proper substantive inquiry into whether the URS was merely cumulative of the prior art on record with the PTO. Taltech Ltd. v. Esquel Enters., Inc., 279 F. App’x 974, 977 (Fed. Cir. May 22, 2008) (“If the undisclosed raincoat seam was merely cumulative to Robers, then no inequitable conduct lies in its nondisclosure.”).

On remand, the district court again found that Wong had committed inequitable conduct based on his failure to disclose the URS, but did so based on a flawed cumulativeness inquiry. The district court erroneously limited the teachings of both the URS and the Robers reference in order to render them non-cumulative prior art. Had the district court properly interpreted the teachings of both references, it would have found that the URS was merely cumulative of Robers.

The district court also improperly inferred intent to deceive from the materiality of the non-disclosed reference and several statements Wong made to the PTO. In both instances, the district court drew an inference of bad faith despite an equally plausible, and likely more reasonable, inference of good faith. Such an analysis has been rejected by this court and is legally erroneous. See Scanner Techs. Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365, 1376 (Fed. Cir. 2008) (“Whenever evidence proffered to show either materiality or intent is susceptible of multiple reasonable inferences, a district court clearly errs in overlooking one inference in favor of another equally reasonable inference.”). The district court’s numerous legal and factual errors are discussed in more detail below. . . .

 

 

Therasense: Background Documents For Those Preparing Amicus Filings

Patent,

The Federal Circuit recently granted Abbott’s request for an en banc rehearing of its Therasense decision. The rehearing will focus on the fundamental elements of inequitable conduct.  Inequitable conduct is a non-statutory (i.e., judge-made) doctrine and the court is entertaining arguments on how it should re-structure the doctrine.

The following documents will be helpful to anyone planning to file an Amici brief in the case:

Court Opinions on Inequtiable Conduct:

Party Briefs Requesting Rehearing:

Amicus Briefs on Rehearing Request:

Arguments to the Original Panel:

Lawrence Pope’s Motion to Intervene:

Download all the documents in a big zip file. [Does not include POPE documents]

 

Patenting Computer-Implemented-Inventions (CIIs) in the EPO

Patent

The following note was written by European Patent Attorney Paul Cole who is also the Visiting Professor of IP at Bournemouth University

EPO Enlarged Appeal Board decision in G 0003/08 Programs for computers/PRESIDENT’S REFERENCE

The EPO President asked the Enlarged Board to consider a set of questions concerning the patentability of programs for computers (computer-implemented inventions, CIIs) on which she deemed the Boards of Appeal to have given different decisions and which she held to be of fundamental importance within the meaning of a. 112(1) EPC. Her referral had been preceded by an informal letter from her predecessor, Alain Pompidou, dated 22 February 2007, in which Lord Justice Jacob’s suggestion in the Aerotel/Macrossan judgment of 27 October 2006 ([2006] EWCA Civ 1371) of referring the issue of CII patentability to the Enlarged Board had been dismissed as unnecessary.  About 100 Amicus curiae briefs had been filed, amongst which a number questioned the admissibility of the referral, a view which was supported inter alia by Lord Hoffmann who was until his recent retirement the member of the UK House of Lords Judicial Committee who usually wrote the opinion of the House in cases involving IP.

 The opinion of the Enlarged Board is available here. 

and a more extended file of the case including the questions originally referred and the reasons for the reference can be found here.

In the outcome, the doubts proved well-founded and the referral was rejected as inadmissible. The views of the Enlarged Board are summarised in the official headnote:

“1. In exercising his or her right of referral a President of the EPO is entitled to make full use of the discretion granted by Article 112 (1) (b) EPC, even if his or her appreciation of the need for a referral has changed after a relatively short time.

2. Different decisions by a single Technical Board of Appeal in differing compositions may be the basis of an admissible referral by the President of the EPO of a point of law to the Enlarged Board of Appeal pursuant to Article 112 (1) (b) EPC.

3. As the wording of Article 112 (1) (b) EPC is not clear with respect to the meaning of “different/abweichende/divergent” decisions the provision has to be interpreted in the light of its object and purpose according to Article 31 of the Vienna Convention on the Law of Treaties (VCLT). The purpose of the referral right under 112 (1) (b) EPC is to establish uniformity of law within the European patent system. Having regard to this purpose of the presidential right to refer legal questions to the Enlarged Board of Appeal the notion “different decisions” has to be understood restrictively in the sense of “conflicting decisions”.

4. The notion of legal development is an additional factor which must be carefully considered when interpreting the notion of “different decision” in Article 112 (1) (b) EPC. Development of the law is an essential aspect of its application, whatever method of interpretation is applied, and is therefore inherent in all judicial activity. Consequently, legal development as such cannot on its own form the basis for a referral, only because case law in new legal and/or technical fields does not always develop in linear fashion, and earlier approaches may be  abandoned or modified.

5. Legal rulings are characterised not by their verdicts, but by their grounds. The Enlarged Board of Appeal may thus take obiter dicta into account in examining whether two decisions satisfy the requirements of Article 112 (1) (b) EPC.

6. T 0424/03, Microsoft does deviate from a view expressed in T 1173/97, IBM, concerning whether a claim to a program on a computer-readable medium necessarily avoids exclusion from patentability under Article 52(2) EPC. However this is a legitimate development of the case law and there is no divergence which would make the referral of this point to the Enlarged Board of Appeal by the President admissible.

7. The Enlarged Board of Appeal cannot identify any other inconsistencies between the grounds of the decisions which the referral by the President alleges are divergent. The referral is therefore inadmissible under Article 112(1)(b) EPC.”

 As regards the relationship between excluded subject mater and inventive step, the Enlarged Board concluded: 

“Indeed if the Boards continue to follow the precepts of T 1173/97 IBM it follows that a claim to a computer implemented method or a computer program on a computer-readable storage medium will never fall within the exclusion of claimed subject-matter under Articles 52(2) and (3) EPC, just as a claim to a picture on a cup will also never fall under this exclusion. However, this does not mean that the list of subject-matters in Article 52(2) EPC (including in particular “programs for computers”) has no effect on such claims. An elaborate system for taking that effect into account in the assessment of whether there is an inventive step has been developed, as laid out in T 154/04, Duns. While it is not the task of the Enlarged Board in this Opinion to judge whether this system is correct, since none of the questions put relate directly to its use, it is evident from its frequent use in decisions of the Boards of Appeal that the list of “non-inventions” in Article 52(2) EPC can play a very important role in determining whether claimed subject-matter is inventive … It would appear that the case law, as summarised in T 154/04, has created a practicable system for delimiting the innovations for which a patent may be granted.” 

The Enlarged Board did not attempt ant definition of technical effect, but commented: 

“While the referral has not actually identified a divergence in the case law, there is at least the potential for confusion, arising from the assumption that any technical considerations are sufficient to confer technical character on claimed subject-matter, a position which was apparently adopted in some cases (e.g. T 769/92, Sohei, Headnote 1). However T 1173/97, IBM sets the barrier higher in the case of computer programs. It argues that all computer programs have technical effects, since for example when different programs are executed they cause different electrical currents to circulate in the computer they run on. However such technical effects are not sufficient to confer “technical character” on the programs; they must cause further technical effects. In the same way, it seems to this Board, although it may be said that all computer programming involves technical considerations since it is concerned with defining a method which can be carried out by a machine, that in itself is not enough to demonstrate that the program which results from the programming has technical character; the programmer must have had technical considerations beyond “merely” finding a computer algorithm to carry out some procedure.” 

The fine print of the opinion will attract obsessive attention from specialists in this area, but the bottom line for the time being is that the status quo will be maintained. European practitioners await the Bilski decision with, if anything, even more interest.

Federal Circuit Denies Apple’s Motion to Transfer Venue out of Texas

Patent

In re Apple (Fed. Cir. 2010)

In a split decision, a Federal Circuit panel has denied Apple’s petition for a writ of mandamus that had asked the court to transfer Apple’s litigation out of the Eastern District of Texas.   

Three weeks before filing suit, the patent holder formed “Personal Audio LLC” in Beaumont, Texas and then assigned the patent rights to the new company and transferred files relating to the patents to that location (which happen to be the office of its litigation counsel). Personal Audio LLC then sued Apple, Sirius XM, and others.

In its decision on mandamus, the Federal Circuit disagreed with the lower court that the Texas court had a particular interest in adjudicating the dispute because Personal Audio was a local company. Rather, the Federal Circuit noted that the “company’s presence in Texas appears to be both recent and ephemeral—its office is apparently the office of its Texas litigation counsel, and it appears not to have any employees in Texas.”

Still, the Federal Circuit refused to order a transfer because the defendants could not show that their chosen venue of Massachusetts was clearly better “particularly in light of the fact that none of the defendants is headquartered there.”

Change of venue DENIED.

The majority opinion was filed by Judges Mayer and Bryson per curiam. Judge Lourie dissented without opinion.

* * * * *

The company PatentFreedom recently reported that Apple faced more NPE patent lawsuits during 2004-2009 than any other company. [LINK]

Judge Michel: USPTO Should Receive $1 Billion Infusion of Cash

Patent

PatentLawPic987Chief Judge Paul Michel recently spoke to USPTO patent examiners on the topic of “American economic security” and the threat posed by “the outflow of jobs, talent, technology and production.”  Judge Michel argued that private investment in US R&D is the only politically feasible solution and that goal will be supported by a well operating patent system: “The answer is faster, sounder and clearer patents, plus faster, stronger enforcement.”

If more R&D is done here, [technologically talented individuals] will come here and stay. If not, foreign talent studying at our universities will all return home. Our own leading technologists will also go elsewhere, just as is now happening in firms such as Intel and Applied Materials, both of whom will soon open large new labs in China headed by their top American researchers.

What is wrong with the current patent system:

First, and foremost: delay. In some technologies it now takes 4-6 years even to get a patent. . . . That is because for two decades the patent office has been underfunded and losing ground. It operates entirely on user fees set by Congress long ago at levels that can no longer finance necessary operations. It lacks both enough examiners, especially experienced examiners, and modern computer systems. Imagine, the government’s own technology agency is using 30 year old computer technology! These are the reasons delays are so long. Even worse, because most applications must by law be published at 18 months, others, including foreign competitors, can pirate inventions for years before the patents issue, for until then patent owners have no rights.

The patent system is failing primarily because the patent office is failing. In a word, it is dysfunctional. Over 700,000 applications sit unread in a warehouse in Alexandria, Virginia, often for years. Although 400,000 are under examination, their progress is far too slow. And every year almost 400,000 more are filed. 

Using money to fix the problem:

. . . Although the PTO should remain financed by user fees, it I needs a transfusion of public money to overcome its dysfunction. It needs thousand of additional examiners, salary increases to retain experienced examiners, new computer systems and space to house an expanded work force. (At present, many employees, although lacking extensive experience, work at home where adequate supervision is more difficult and applicant interviews are problematic.) Thus, even if Congress raised fees, which it should, resolving the current crisis requires a large infusion of public money. And it is needed soon. Deferral will have corrosive consequences that cannot be undone. Therefore, I suggest an immediate capital investment of one billion dollars. It could be spent over the next several fiscal years, but it must be appropriated immediately. . . . Is my suggestion unrealistic? Maybe, but not if our nation followed proper priorities.

Would such a transfusion as a capital investment fix the patent office? Mostly. . . .

Read the text of Judge Michel’s Speech at the JPTOS Website.

Menell: Patent Authority of the International Trade Commission

Patent

Berkeley Law School professor Peter Menell has published a new essay in the Patently-O Patent Law Journal that discusses the Section 337 authority of the International Trade Commission (ITC).

The ITC now conducts more full patent adjudications on an annual basis than any district court in the nation. The ITC’s six Section 337 administrative law judges (ALJs) focus almost exclusively upon patent investigations, making the ITC the only specialized trial-level patent adjudication forum in the nation. Given the importance of international trade to high technology markets, the ability to exclude goods at the border provides a valuable strategic option for patent owners.

Consequently, all patent litigators and in-house patent counsel should be familiar with the ITC’s Section 337 authority. This article summarizes its key elements and calls attention to an upcoming conference – The ITC Comes to Silicon Valley (May 18, 2010) in San Jose – and the development of a comprehensive, up-to-date treatise: Section 337 Patent Investigation Management Guide.

The essay also includes a useful table comparing differences in rights and procedures between district court patent adjudication and ITC patent investigations.

Documents:    

Patent Grants Continue to Rise

Patent

Two-weeks ago, I reported on the rising number of patent grants at the PTO. That trend has continued.  The chart below shows the average number of patents issued per week through May 11, 2010.  In the past three weeks, the USPTO issued an average of 4,517 patents per week. That figure is more than 40% above the 2009 weekly average. 

PatentlyO046

The USPTO issues new patents each Tuesday morning.  Of the weeks with the most patent grants, eight of the top-ten weeks are from this year (2010).  The other two high-grant weeks were in 1999 while Todd Dickinson was director.

 

Vegas Trade Show Satisfies Minimum Contacts Test

Patent,

PatentLawPic986Patent Rights Protection Group v. Video Gaming Technologies (VGT), (Fed. Cir. 2010)

Patent Rights holds patent rights to several slot-machine patents and sued a host of companies for infringement. The Nevada-based district court dismissed the suits against VGT and SPEC for lack of personal jurisdiction. In particular, the district court held that personal jurisdiction would be “unreasonable.”

Although patent law is nationalized and litigation is handled in federal courts, the courts are only empowered to take action against defendant have sufficient contacts with the state where the court is located. This analysis of minimum contacts falls under the rubric of “personal jurisdiction” and has been well developed by the US Supreme Court in cases such as Burger King (1985) and International Shoe (1945). Here, the personal jurisdiction question is whether the defendants’ contacts with the Nevada are sufficient such that exertion of power by a Nevada-based court “would comport with ‘fair play and substantial justice.’ i.e., whether exercising jurisdiction would be reasonable.” (Nevada’s long-arm statute extends to the Constitutional limits.)

VGT and SPEC had only de minimis sales of their products in Nevada. However, both companies had attended several Las Vegas trade shows.

Writing for the unanimous court, Judge LINN [updated to correct typo] held that it would not be “prohibitively burdensome” for either defendant to defend this suit in Nevada. “Indeed, their admitted presence at numerous trade shows in Nevada indicates that, despite their arguments to the contrary, neither company faces a particularly onerous burden in defending itself in Nevada.” Here, the court concluded that exhibiting products at a Vegas trade show (“one of the world’s larger gaming markets”) was likely done with the prospect of commercial benefit and that use of a Nevada business opportunity satisfies the minimum contacts test.

On remand, the district court will likely consider further elements of the personal jurisdiction test (specific vs general jurisdiction) as well as venue.

Director Kappos Testimony to Congress

Patent,

On May 5, 2010, Director Kappos testified to the House Judiciary Committee. The prepared testimony included three specific USPTO goals:

  • By the year 2014, reduce the average time to first office action on the merits for patent applications to 10 months;
  • By the year 2015, reduce total average pendency for patent applications to 20 months; and
  • Create an IT infrastructure that permits end-to end electronic processing in patent and trademark IT systems. 

To reach these goals, the PTO is focusing on several specific initiatives:

International worksharing: The USPTO, EPO and JPO have agreed to use PCT search and examination results in their worksharing approach.  Director Kappos sees that option as having “the potential to dramatically increase the number of applications eligible for [Prosecution Highway] processing.”  The prosecution highway “concept is fairly straightforward.”

[W]hen an office determines that one or more claims are patentable in one application, the applicant may request fast-track examination of the same or similar claims in the second, related application filed with the second office. To have the request for fast-tracking accepted, the applicant must make available to the second office the relevant work of the first office as well as any necessary translations. By restricting the scope of claims presented to the second office, and by requiring the applicant to make the relevant work from the first office available to the second office, the PPH promotes a high degree of reutilization of first office work. The PPH also respects the principle of sovereignty noted above because each office maintains responsibility for the final determination of patentability in accordance with applicable law.

Hiring: The USPTO is looking to hire 1000 additional patent examiners over the next two years. The bulk of these examiners would preferably be experienced IP professionals but could be part of a “nationwide workforce.”   With the absence of funding, the PTO has hired only nine (9) examiners during FY2010 and 127 examiners have left their positions.

Funding: Director Kappos would hope for fee setting authority to allow for an “interim fee adjustment on patent fees to provide resources in the intermediate term; and an operating reserve to ensure adequate reserves to address multi-year budget plans and fluctuations in revenues.”

In his testimony, Damon Matteo, Chairman of the PPAC also indicated that “temporary” administrative fee-setting authority may well be the best first-step in patent office reform. 

We believe that to assure adequate funding levels for the long term, the USPTO needs authority to set and adjust fees administratively, so that it can properly establish and align fees in a timely, fair and consistent manner to recover the actual costs of USPTO operations and without going through the inherently long delays in the legislative process. This will afford the USPTO the opportunity to reform its funding model holistically to operate in a more businesslike fashion. After a period of time, or once the USPTO is on firmer fiscal footing, the fee-setting authority can be revisited.

Documents:

Patenting by Small-Entities

Patent

The number of small-shop innovators continues to dwindle. In a sample of recently issued patents,* only 20% claim “small entity” status. Of those, 30% (6% of the total) are held by the original inventors.** According to the PTO Rules, large universities and non-profits still qualify as for the small entity price-break so long as the patents-in-question have not be assigned or licensed to a non-qualifying entity. At least 12% of the small entity patents are assigned to universities or non-profits. These small entities include multi-billion-dollar operations including Battelle Energy Alliance, California Institute of Technology, Princeton University, and the Korean government funded ETRI. The remaining small entity patents are largely held by companies and partnerships such as Audible Magic, PixArt Imaging, and Alverix.

PatentlyO045US versus Foreign: Only 45% of the large-entity assignees are US based while 69% of the small-entity assignees are US based and 77% of the un-assigned patents include at least one US based inventor. (See Graph at Right).

  • * This data comes from a set of 1700 utility patents issued on April 27, 2010.
  • ** I.e., the USPTO has no assignment on record associated with the patent.

Donald Chisum: Ariad (2010) and the Overlooked Invention Priority Principle

Patent, , ,

In a new essay for the Patently-O Patent Law Journal, Donald Chisum considers the "invention priority principle" and its role in the written description analysis. 

There may be a solution: application of an established patent law priority principle. The principle focuses on a specific embodiment of a generically claimed invention as a constructive reduction to practice, that is, as a completion of the inventive process. Adopting this solution would preserve the written description of the invention's (WDIs) independence and applicability to original claims but would remove WDI as a standard for assessing the scope of a patent claim. WDI would continue to govern whether, at the time an applicant files an application, he or she has completed the inventive process, that is, "possesses" the invention. But only enablement would govern how broadly the applicant is entitled to claim that invention. It may be possible to implement this priority principle interpretation of Ariad without contradicting its clear holdings.

Cite as Donald S. Chisum, Written Description of the Invention: Ariad (2010) and the Overlooked Invention Priority Principle, 2010 Patently-O Patent L.J. 72.

Other Patently-O Patent Law Journal publications: 

Donald Chisum: Ariad (2010) and the Overlooked Invention Priority Principle

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In a new essay for the Patently-O Patent Law Journal, Donald Chisum considers the "invention priority principle" and its role in the written description analysis. 

There may be a solution: application of an established patent law priority principle. The principle focuses on a specific embodiment of a generically claimed invention as a constructive reduction to practice, that is, as a completion of the inventive process. Adopting this solution would preserve the written description of the invention's (WDIs) independence and applicability to original claims but would remove WDI as a standard for assessing the scope of a patent claim. WDI would continue to govern whether, at the time an applicant files an application, he or she has completed the inventive process, that is, "possesses" the invention. But only enablement would govern how broadly the applicant is entitled to claim that invention. It may be possible to implement this priority principle interpretation of Ariad without contradicting its clear holdings.

Cite as Donald S. Chisum, Written Description of the Invention: Ariad (2010) and the Overlooked Invention Priority Principle, 2010 Patently-O Patent L.J. 72.

Other Patently-O Patent Law Journal publications: 

Divisional of a Divisional: Avoid Terminal Disclaimers

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Boehringer Ingelheim International GMBH v. Barr Laboratories, Inc. (Fed. Cir. 2010) (denial of en banc rehearing)

In January 2010, the Federal Circuit expanded the scope of the safe-harbor created by 35 USC 121 against double patenting allegations. Namely, the court held that a divisional-of-a-divisional still qualifies for the safe harbor so long as the later-filed applications do not violate the Examiner’s original grouping suggestions.

Now, the court has denied generic drugmaker Mylan request for rehearing en banc. Mylan had presented two questions:

1.    Whether a divisional of a divisional patent application is a “result of a restriction requirement imposed on an original application, entitling a patentee to invoke 35 U.S.C. § 121’s safe harbor from invalidity due to double patenting, where the second divisional was filed voluntarily for strategic reasons and was not mandated by the original restriction requirement.”

2.    Whether a divisional application is “consonant” with a restriction requirement, entitling a patentee to invoke the safe harbor of 35 U.S.C. § 121, where the divisional disregards the lines drawn by the examiner in imposing the restriction requirement.

Judges Gajarsa and Dyk dissented from the en banc denial. In the dissent, Judge Gajarsa wrote:

Because the majority’s decision improperly expands the statutory safe-harbor provision of 35 U.S.C. § 121 beyond Congress’s intended scope, I respectfully dissent from the court’s denial of Mylan’s petition for rehearing en banc. While the Supreme Court has not construed § 121, the majority’s expansive opinion is inconsistent with our longstanding precedent, and will work a major change in our jurisprudence.

The purpose of § 121 is to prevent the inequity that resulted from an examiner’s improper restriction requirement (separating out supposedly patentably distinct inventions that were in fact the same or not patentably distinct), whereby a patentee’s compliance with an examiner’s incorrect restriction would result in the original application being used as a reference against the later divisional application and a rejection on double patenting grounds. See Pfizer, Inc. v. Teva Pharms. USA Inc., 518 F.3d 1353, 1361 (Fed. Cir. 2008); Studiengesellschaft Kohle mbH v. N. Petrochem. Co., 784 F.2d 351, 359 (Fed. Cir. 1986) (Newman, J., concurring). Thus, § 121 “effects a form of estoppel” against the PTO, “that shields the applicant from having to prove the correctness of the restriction requirement in order to preserve the validity of the second patent.” Studiengesellschaft, 784 F.2d at 361. In our past decisions, we have limited § 121 in accordance with its language and clear purpose to situations in which the patent applicant has been forced to divide his application by action of the PTO. We have interpreted the statute to include a requirement of consonance, requiring that the later application or applications follow the original examiner’s restriction requirement, and we have interpreted the statute to include a requirement that the later application or application be filed “as a result of” the original PTO restriction.

In addressing § 121, the majority opinion commits two legal errors. First, it significantly undermines this court’s “consonance” precedence by permitting a patentee to ignore the examiner’s demarcation of independent and distinct inventions in subsequent divisional applications. Second, it engages in an impermissible and expansive reading of § 121’s “as a result of” language. Either error in isolation would be worthy of en banc review; coupled together, the errors threaten to significantly broaden § 121’s safe-harbor provision in clear defiance of this court’s “strict test for application of § 121.” Geneva Pharms., Inc. v. GlaxoSmithKline PLC, 349 F.3d 1373, 1382 (Fed. Cir. 2003).

 

Gary Locke: Patent Office Needs Self-Control of Funding and Enhanced Post-Grant Review

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PatentLawPic985The following essay was written by Secretary of Commerce Gary Locke and originally published in Politico. Locke is the former Governor of Washington and former partner at Davis Wright Tremaine. As you may know, the US Patent & Trademark Office operates as a branch of the Department of Commerce. 

* * * * *

As Congress hurtles toward the midterm elections, there are two things everyone agrees Washington needs to keep working on: spurring job creation and promoting continuing economic recovery.

Fortunately, there’s legislation now before Congress that has bipartisan support, can boost our economy and doesn’t add a cent to our federal debt. This bill aims to fix the outdated patent system, which has left the U.S. Patent and Trademark Office with a backlog of 750,000 applications — a backlog that’s threatening America’s ability to innovate. 

And that’s a big problem, because innovation is the lifeblood of the U.S. economy. The introduction of new products and services accounts for three-quarters of America’s annual growth rate since World War II. This innovation is fueled by businesses, inventors and entrepreneurs who depend on patent protection to attract capital investment and to promote and protect their products and services in the global marketplace. Today, America’s patent system – and by extension our entire innovation system – isn’t working. As a result, we are jeopardizing our edge in the global economy.

America may still be a world leader in key metrics of economic success – like levels of entrepreneurship, R&D investment and IT infrastructure – but a report last year from the Information Technology and Innovation Foundation concluded that no advanced economy has done less than the United States to improve its competitive position over the past decade. President Barack Obama sees the urgency of this problem and has announced a formal National Innovation Strategy, which, among other things, calls for doubling the budgets of agencies like the National Science Foundation so they can better support the basic research that spawns new products and services.

But to unleash the full power of America’s innovators, we’ve got to repair an overloaded and inefficient patent system. The unacceptably long backlog at the patent office – in which the average time it takes to grant or deny a patent is more than 34 months – is a striking signal of the system’s dysfunction. Since taking over at the patent office last August, David Kappos has already made significant strides in reforming the workplace, improving productivity and boosting morale. These steps and others have been applauded by all sectors of the innovation community. But additional, desperately needed reforms require action by Congress. The Commerce Department just released a white paper that quantifies the effect America’s patent system has on the economy and job creation and describes the benefits of two key elements of pending patent reform legislation.

First, Congress will grant fee-setting authority to the patent office, which will enable it to adjust the actual costs of the services it provides. This could contribute significantly to the office’s ability to reduce the application backlog by 40 percent. Second, creating an enhanced post-grant review procedure within the office will provide an alternative to costly – and often lengthy – litigation. It could also provide greater marketplace certainty – at lower cost. This review procedure is expected to be 50-100 times less expensive than litigation.

The patent reform legislation being considered by both chambers will also improve patent quality, streamline the patent examination process, promote international harmonization of patent law and limit litigation expenses. All these provisions will foster innovation and contribute to long-term economic growth. As we move forward on reforming our patent laws, we need to remember that the ultimate goal is to create more American jobs that can provide dignity, security and a sense of hope for the future. After a decade fueled by speculation and short-term thinking, the United States needs to refocus on nurturing innovations that generate real value for society and spur sustainable job creation. It’s not the role of the federal government to predict or dictate exactly how this new economy will take shape. Our job is to create the right set of incentives, regulations and laws that allow innovators to experiment with new ideas, build new businesses and follow their dreams. Patent reform legislation is a key part of this strategy. To promote continued economic recovery, it is critical for Congress to create a business environment that fosters innovation and risk taking ‹ accelerating economic growth and job creation and expanding America’s ability to innovate. Now is the time to act. Congress should seize this opportunity and send patent reform legislation to the president’s desk. Gary Locke is the secretary of commerce.