USPTO Fees 2011: Justifying the Fee Increase

Patent,

It is clear that the USPTO needs funding to address its backlog of yet-to-be-examined patent applications and to revitalize its information technology infrastructure. An increase in funding is largely in the interest of the patent community. The primary downside is that most of the proposed increase will be paid by the patent community as well. Three forms of increased funding are currently on the table:

  1. Increase substantially all fees by 15%.
  2. Allow the USPTO to set its own fees.
  3. Allow the USPTO to retain and spend its collected fees even if they are over-budget

Fifteen Percent of What: Although a 15% increase in fees is significant. The current prosecution fees for a large entity total to $2,900. This includes Filing, Search, Examination, Publication, and Issue Fees. Many applicants pay additional fees for late responses, appeals, petitions and RCEs. The median fees paid for a large entity is probably closer to $4,000 and a 15% increase would be $600. For small-entities, the fees are reduced by 50%. Of course, the majority of the cost of patent prosecution is not found in USPTO fees, but rather in the cost of hiring patent attorneys & agents as well as the time spent by inventors and managers. For a large entity, the total cost of preparing an application and prosecuting the application through to issuance easily runs over $25,000. In that scenario, the $600 increase may be better seen as a 2.4% increase.

Trusting the USPTO: Some applicants may be worried that USPTO would rapidly increase fees if it were given the right to set its own fees. Perhaps the office would buy-into Tim Wilson’s $50,000 application fee proposal. I do not believe that fear is grounded in reality. Here, I point to three practical limits on the PTO’s power. First, as proposed, the fee increase would be limited to increases that allow the office to recoup its costs. Second, if the PTO raises a large excess amount in fees the extra revenue will almost certainly be taken by Congress. Knowing that, the PTO is unlikely to greatly increase fees. Finally, the current director David Kappos appears sympathetic to patent applicants and is unlikely to take actions that are truly adverse to that community as a whole.

Why not Cuts: The difficult case for the PTO is to explain why two-billion-dollars is not enough? (See tables below). I.e., should the needed money come from redirecting unhelpful spending rather than increasing revenue?

Redirection – An Office Full of Examiners: A particular thought that comes-to-mind is the potential that everyone on the patent-side who is qualified to be examining patent applications should be examining patent applications. This means that supervisors, technology center directors, quality-assurance specialists, legal advisors, international liaisons, patent attorneys, judges, petitions officers, and commissioners could all have examination dockets. Even if small, these folks are – for the most part – have a history of being productive examiners and would contribute to reducing the backlog. In addition, a refocus and reconnection on the core role of examination may also help the office both improve quality and its spirit.

The following two charts are taken from the USPTO FY2009 Annual Report:

Note: A note on my $25,000 prosecution budget above. That is my own anecdotal estimate. This includes (1) the time spent by in-house inventors and managers in writing-up the invention and selecting which inventions to patent along with patenting bonuses paid to the inventors; (2) attorney time in drafting and prosecuting the patent application; and (3) fees paid to the USPTO. Is this accurate?

USPTO FY2011 Budget: Part II

Patent
  • Note: This is a discussion of President Obama’s proposed budget for FY2011. It is unlikely that the proposal will be pass through Congress unchanged.
  • Read Part I: [Link]
  • USPTO Press Release: [LINK]

    Goals:

    • A significant reduction in patent pendency periods and the existing patent inventory backlog; improvement in patent quality; enhanced intellectual property (IP) protection and enforcement; global IP policy leadership; and investment in information technology (IT) infrastructure and tools to achieve a 21st Century system that permits end-to-end electronic processing in patents and trademark IT systems.
    • Achieve 3 percent annual efficiency gains in patents processing through the re-engineering of management and workflow processes.
    • Initiate a targeted hiring surge and hire 1,000 patent examiners annually during FY 2011 and FY 2012. This effort will target former patent examiners and IP professionals who will require minimal training and can be productive virtually from the start of their employment.
    • Further details on the USPTO’s five-year strategic plan will be released in the second quarter of 2010 as they become available.

      Fees:

    • The administration is proposing an interim fee increase on certain patent fees which is estimated to generate $224 million.
    • The administration continues to support granting the USPTO fee-setting authority as a significant part of a sustainable funding model that would allow the director to propose and set fees in a manner that better reflects the actual cost of USPTO services.
  • Just-an-Examiner: [LINK]
    • “[I]t will be interesting to see how the Office goes about finding 1,000 former examiners and IP professionals to hire. Like the Office’s targets for pendency and backlog reduction, it seems pretty ambitious. Still, there’s certainly nothing wrong with aiming high.”
  • Salary Rate for Examiners (Plus Overtime and Federal Government Benefits): Depending upon qualifications and prior experience, new patent examiners are typically hired at in the range of grades 7-11. [updated with 2010 salary information below]

Obama FY2011 Proposed Budget for the USPTO (Including at Least a 15% Increase in Fees)

Patent,
  • USPTO estimates $2.322 billion in revenue for FY2011. FY2009 USPTO revenue was $1.901 billion and FY2010 revenue is projected at $2.003 billion. 
  • The jump in expected revenue is largely based on a proposed 15% increase in user fees. According to the budget statements, the increase is “intended to be an interim measure.”  However, I would not expect fees to drop again any time soon.
  • Justifying this increase, the administration indicates that it has set a “high priority goal” of reducing “patent pendency for first action and for final actions from the end of 2009 levels of 25.8 and 34.6 months respectively by the end of 2011, as well as the patent backlog.”
  • USPTO would also be given full access to its fee collections up-to $100 million over-budget.
  • USPTO would also be given authority for FY2011 to increase fees beyond the 15% at its discretion.
  • A Wall Street Journal article cites Commerce Department officials as indicating that the increased funding will allow the PTO to “reinstate overtime and hire 1,000 new examiners.”  Director Kappos has also indicated that updates of the USPTO IT system is necessary. [Link]
  • The budget also estimates $36 million for the Court of Appeals for the Federal Circuit.
  • Read the Budget here.

 

Patently-O Bits and Bytes No. 317

Patent
  • Learning International IP: A relatively new patent-attorney asks the following question: “I find myself very unfamiliar with foreign patent practice. Could you recommend a book/other resource that discusses the intricacies of patent prosecution in foreign countries from the point-of-view of a US patent practitioner?” Suggestions?
  • Learning by Watching: Professor Beckerman-Rodau is spearheading an IP Podcast series available for free from Suffolk Law. [LINK]
  • Learning IP Theory: Three fairly new books recently arrived in the mail. All would be considered left leaning.

Patently-O Bits and Bytes No. 317

Patent
  • Learning International IP: A relatively new patent-attorney asks the following question: “I find myself very unfamiliar with foreign patent practice. Could you recommend a book/other resource that discusses the intricacies of patent prosecution in foreign countries from the point-of-view of a US patent practitioner?” Suggestions?
  • Learning by Watching: Professor Beckerman-Rodau is spearheading an IP Podcast series available for free from Suffolk Law. [LINK]
  • Learning IP Theory: Three fairly new books recently arrived in the mail. All would be considered left leaning.

Invalidity of the Extension of a Patent Term

Patent

Thousands of requests will be filed in the next couple of weeks asking the USPTO to recalculate the patent term adjustment (PTA) owed to recently issued US patents. [LINK] In a prior post, I suggested that the PTO’s approach of offering a second-window for recalculation could be seen as improperly extending the agency’s authority. [LINK] The PTO’s improper extension of authority to adjust PTA is unlikely to leave a patent invalid. However, it is possible that the extended term could be rendered invalid under 35 U.S.C. § 282.

Section 282 describes defense available to an accused patent infringer. The final portion of the statute creates a defense of “invalidity of the extension of a patent term” based on improper calculation under either Section 154(b) (PTA) or Section 156 (PTE) of the Patent Act.

[The following shall be a defense:] Invalidity of the extension of a patent term or any portion thereof . . . because of the material failure (1) by the applicant for the extension, or (2) by the Director, to comply with the requirements of such section.

The statute goes on to explain that failure to comply with the statutory requirements create a defense against actions involving infringement “during the period of the extension.”

Under this statute, the term extension can be left invalid based on the USPTO’s failure to follow the law outlined in 35 U.S.C. § 154(b). The 1999 statute has not been interpreted yet, but appears to require (i) material failure to comply with the requirements of Section 154(b) and (ii) that the accused infringement occur “during the period of the extension,” and that the result will be that the improperly calculated portion of the extension will be invalidated.

* * * * *

Extension of USPTO Authority?: Section 154(b) of the Patent Act details the steps for calculating a patent term adjustment and for challenging the USPTO’s determination. Section 154(b)(3)(B)(ii) requires that the PTO “provide the applicant one opportunity to request reconsideration.” (Emphasis added). A still dissatisfied patentee then has a right to file a civil action in the US District Court located in Washington DC within 180 days of the grant of the patent. Patent applicants with patents that issued in the past 6-months were all already given one opportunity to request reconsideration of the USPTO’s PTA decision. In its interim recalculation offer, the USPTO is providing applicants with a second opportunity to request reconsideration. The administrative law question is whether the USPTO has authority or offer the second opportunity. Regarding invalidation of the extension under Section 282, an accused infringer hoping to challenge the term extension would also need to prove that the PTO action is “material.”

* * * * *

The image above comes from James Scurlock’s Patent No. 7,397,731.

Filing a Patent on Behalf of a Non-Cooperating Inventor

Patent

PatentLawPic907Yale Preston v. Marathon Oil (D.Wyoming)

The trial date is approaching in the case of Preston v. Marathon Oil. Preston was a former employee of Marathon and the two are disputing ownership of patent rights.  Preston and Marathon each obtained a patent naming Preston as the inventor.  Marathon’s file-history is interesting because it includes a petition to accept an unsigned oath based on the inventor’s refusal to sign.

37 CFR 1.47(b) reads as follows:

Whenever all of the inventors refuse to execute an application for patent, or cannot be found or reached after diligent effort, a person to whom an inventor has assigned or agreed in writing to assign the invention, or who otherwise shows sufficient proprietary interest in the matter justifying such action, may make application for patent on behalf of and as agent for all the inventors. The oath or declaration in such an application must be accompanied by a petition including proof of the pertinent facts, a showing that such action is necessary to preserve the rights of the parties or to prevent irreparable damage, the fee set forth in § 1.17(g), and the last known address of all of the inventors. An inventor may subsequently join in the application by filing an oath or declaration complying with § 1.63.

The petition filed by Marathon includes: (1) a statement from Marathon’s attorneys that contacted Preston by Mail and by Telephone and that he indicated his refusal to sign; (2) a copy of the employment agreement that includes a promise to disclose and an assignment of IP rights. The petition was granted. [Petition.pdf (2643 KB)]

Two interesting tidbits: (1) Preston’s patent issued first, and the examiner of the Marathon Oil application issued a double-patenting rejection. Interestingly, it does not appear (from the file history) that Marathon ever filed a terminal disclaimer or otherwise discussed Preston’s patent. [The Preston patent was not disclosed by the Marathon, rather it was located by the Examiner in his search.]  (2) the employment agreement is important for the case. As he signed his agreement, Preston indicated that he held prior rights in a “CH4 Resonating Manifold” that would not belong to Marathon.  The agreement expressly states that Marathon agrees that those rights are “NOT the property of MARATHON.”  The question up for grabs is whether the invention at issue in this case is the same as the CH4 manifold disclosed in the agreement.

 

Patently-O Bits and Bytes No. 316

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Patently-O Bits and Bytes No. 316

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PTA Recalculation Submissions

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Although I have some problems with the USPTO’s claim of authority to act, prudent patentees will submit a PTA reconsideration form for patents issued since August 1, 2009 that might be owed additional patent term due to the Wyeth decision.

The recently distributed form (Titled a Request for Recalculation of Patent Term Adjustment in view of Wyeth) is exceedingly simple and requires only basic information regarding the patent and a signature. The applicant is not even required to indicate a belief that additional patent term is due. Forms are due on a rolling basis – always within 180-days of patent issuance. Thus, form should be immediately submitted for patents issued in early August, 2009.

Although PTA calculation is somewhat complex, the Wyeth change only impacts patents that meet the following criteria: (1) application actually filed on or after May 29, 2000 and (2) prosecution pendency of greater than three years. The vast majority of impacted cases will also include (3) a file history showing that the PTO delayed in examining the application during the first three years of pendency. The most likely PTO delay is that the Office waited more than 14-months before providing an initial examination response such as an office action rejection; restriction; or notice of allowance. Although only an educated guess, I suspect that the median additional term will be a bit under 1-year.

File Attachment: PTO Form SB-131 (Jan 2010).pdf (139 KB)

Interim Procedure for Requesting a (Free) Patent Term Adjustment (PTA) Recalculation from the PTO

Patent

In Wyeth v. Kappos, the Federal Circuit held that the USPTO has been miscalculating the Patent Term Adjustment (PTA) owed to patentees due to delays in patent prosecution. The USPTO has now announced an interim procedure for requesting recalculation of patent term.  According to the plan, the PTO will recalculate the patent term for free for any patent issued prior to March 2, 2010 so long as the request for reconsideration is submitted within 180 days of issue. (Patents Issued on August 4, 2009 will reach the 180 day mark on Sunday, January 31, 2010.)  The requested recalculation may only be for the purpose of correcting the overlap-calculation discussed in Wyeth. 

[T]he USPTO will be processing recalculation requests under an interim procedure that is available to a patentee whose patent issues prior to March 2, 2010, and who requests it no later than 180 days after the issue date. This procedure is available only for alleged errors in calculation that are specifically identified in Wyeth. A copy of the notice submitted to the Federal Register for publication and the form for patentees to use in requesting a recalculation of patent term is on the USPTO Web site at /media/docs/2010/01/pta_wyeth.pdf.

The USPTO created March 2, 2010 as a deadline because it expects to be correctly calculating PTA by that point. “The agency expects to complete by March 2, 2010, the software modification necessary to comply with the U.S. Court of Appeals for the Federal Circuit’s recent decision in Wyeth v. Kappos regarding the overlapping delay provision of 35 USC 154(b)(2)(A).”  If my undertanding is correct, the PTO intends to continue to issue patents with the incorrect PTA calculation up until that point.

Although it would be wise to double-check the PTO’s calculations, the applicant is not required to make the calculation prior to requesting reconsideration. Rather, according to the PTO, “the request for reconsideration need only state that reconsideration is being requested in view of the Federal Circuit’s decision in Wyeth.”

Potential Statutory Violation: Although I applaud the USPTO’s patentee friendly approach I am not convinced that the PTO has the power to take this action. Notably, 35 USC 154(b)(3)(B)(ii) requires that the PTO “provide the applicant one opportunity to request reconsideration.”  The subsequent procedure identified by statute is a civil action that must be filed in court within 180 days of the grant of the patent.  For patents that have already issued, the PTO has already offered the one opportunity to request reconsideration (see 37 CFR 1.705) and this waiver of the rules is providing a second opportunity for reconsideration.  The court that limited the PTO’s power in Tafas v. Dudas could also limit the agency’s power in this situation.  Even if the PTO is acting unlawfully, a patent receiving additional patent term due to the unlawful behavior will still likely be valid and enforceable under Aristocrat.

Potential Loss of Right to a Civil Action: Applicants should also beware that the 180–day-from-issuance deadline for filing a civil action to correct the PTA has not been waived. This means that the applicant may have no recourse if the PTO’s recalculation decision arrives after that 180–day window.

Subscribe: Daily E-Mail from Patently-O

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Inequitable Conduct Based on Contradictory Statements to the EPO (in a non-family member application)

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Therasense, Inc. (Abbott) v. Becton, Dickinson and Co. (Fed. Cir. 2010) (Case No. 2009-1511)

This detailed 67–page opinion includes several important issues. This post focuses on inequtiable conduct. The Federal Circuit recently released a parallel decision involving the same parties (but different patent) here. 

After a bench trial, Northern District of California Judge Alsup held Abbott’s patent unenforceable due to inequitable conduct during prosecution. (Patent No. 5,820,551). On appeal, the Federal Circuit has affirmed that decision — holding that the prosecuting attorneys had violated their duty of disclosure by failing to dislcose statements made by Abbott to the European Patent Office during a proceeding involving the European counterpart of another patent family (the ‘382 patent’ family) also owned by Abbott.  Although the court affirmed the finding of inequitable conduct, it offered the fig leaf that such a finding should be “rare.”  (Note: Therasense originally filed both patent applications and also made the statements to the EPO. That company was subsequently purchased by Abbott.)

Patent applicants (and their attorneys/agents) are required to disclose to the US Patent Office any information that a reasonable examiner would likely consider important in deciding whether to issue a patent.  Failing to submit the required information can lead to a finding of inequitable conduct if the information was both (1) material to patentability and (2) witheld because of an intent to deceive the Patent Office.  Inequitable conduct usually results in a patent being rendered totally unenforceable. “The penalty for inequitable conduct is severe, as an entire patent is rendered unenforceable.”

During prosecution, the examiner rejected the application based on Abbott’s own ‘382 patent.  In response, Abbott’s Director of Research submitted an affidavit attesting that the one skilled in the art would not consider the ‘382 patent to teach the invention as claimed in the ‘551 patent. [The claimed invention was a glucose-memter electrode strip without an intervening membrane layer — with the absense of the membrane being the distinguishing feature.]  Based on that representation, the Examiner allowed the patent to issue. Meanwhile, in Europe, Abbott made the statement that the stated distinction was only a “safety measure” and was “preferred” but not necessary. [“It is submitted that this disclosure is unequivocally clear. The protective membrane is optional, however, it is preferred when used on live blood.”]

Based on these facts, the Federal Circuit found the statements material:

To deprive an examiner of the EPO statements—statements directly contrary to Abbott’s representations to the PTO—on the grounds that they were not material would be to eviscerate the duty of disclosure. Moreover, if this could be regarded as a close case, which it is not, we have repeatedly emphasized that the duty of disclosure requires that the material in question be submitted to the examiner rather than withheld by the applicant.

Lawyer Argument Regarding Prior Art: In several cases, the Federal Circuit has held that contradictory representations made during the prosecution of other patent applications should not be considered material to patentability if made in the form of lawyer-argument. See Innogenetics. Here, the appellate panel distinguished those cases because they all involved US applications rather than statements made to different institutions.

However, all of the cases Abbott cites involve patentees who simply made representations to the PTO about prior art in order to secure the allowance of their patents.  None of these cases involved a situation in which contradictory arguments made in another forum were withheld from the PTO. They do not speak to the applicant’s obligation to advise the PTO of contrary representations made in another forum. Before the EPO, Abbott made statements that contradicted the representations Abbott made to the PTO regarding the ’382 patent. An applicant’s earlier statements about prior art, especially one’s own prior art, are material to the PTO when those statements directly contradict the applicant’s position regarding that prior art in the PTO. See 37 C.F.R. § 1.56(b)(2). In any event, the representations to the PTO were not merely lawyer argument; they were factual assertions as to the views of those skilled in the art, provided in affidavit form.

Intent: The Federal Circuit agreed that the lower court’s finding of subjective intent was “amply supported.”

Holding:

Because the district court’s findings that the EPO submissions were highly material to the prosecution of the ’551 patent and that Pope and Dr. Sanghera intended to deceive the PTO by withholding those submissions were not clearly erroneous, the district court did not abuse its discretion in holding the ’551 patent unenforceable due to inequitable conduct.

Judge Linn filed a dissenting opinion: Judge Linn argues (1) that there is an explanation for the statements that does not lead to them being directly contradictory and (2) that the individuals involved “produced a good faith explanation as to why they withheld the EPO submissions.”  Such a good faith explanation should defeat charges of inequitable conduct if it is plausible.

The question, thus, is not whether it is plausible that the information is immaterial—a question asked under the objective materiality prong—but rather, whether it is plausible that the individuals subjectively believed that the reference was immaterial at the time they withheld it—a question presented under the subjective intent prong.

 

 

What Does a Patent Examiner Do with 900+ References?

Patent

Recently issued patent number 7,651,688 is not too remarkable. Its three claims cover an “antibody composition” with a particular arrangement of “sugar chains.” The oddity is that the first 10-pages of the patent document are filled with a listing of over 900 references submitted by the applicant in a series of six information disclosure statements. (The examiner included an additional nine references based on her search of the art).

The most common type of reference submitted in this case were documents from the file-histories of other US patent applications owned by the same entity (Kyowa Hakko Kirin Pharma, Inc.). Many of the submitted references are actually from the file-histories of related-cases being examined by the same examiner. See table below:

881.    Non-Final OA issued Oct. 17, 2007 in U.S. Appl. No. 10/581,413.
882.    1.111 Amendment filed Apr. 17, 2008 in U.S. Appl. No. 10/581,413.
883.    Restriction Requirement issued Jul. 28, 2008 in U.S. Appl. No. 10/581,413.
884.    Final OA issued Dec. 11, 2008 in U.S. Appl. No. 10/581,413. 

The result here is that the file history includes 13,689 pages of non-patent or foreign prior art. Most of those documents were submitted after the applicant had already received a notice of allowance.

Based on my cursory reading of the file history, I do not see that the prosecuting firm (Sughrue) did anything improper or wrong in this case. To the contrary, based on recent inequitable conduct cases, the patentee is clearly hoping to avoid charges of inequitable conduct based on ‘hiding’ references. Of course, the applicant did not indicate which (or which parts) of the 900+ references are most relevant and everyone is clear that the examiner is not going to read all of the references. As one practitioner wrote to me: “The balance is way off between useful information in an IDS and covering-our-asses in regards to inequitable conduct. Something needs to give.”

I contacted Ken Burchfiel of Sughrue. He provided the following on-point commentary:

Burchfiel: I can’t comment on U.S. Patent 7,651,688, except to commend its excellence, and instead offer more general observations on the infectious doctrine of inequitable conduct in a time of “absolute plague” 22 years after Kingsdown.

In view of the Federal Circuit’s decisions in Dayco Prods., Inc. v. Total Containment, Inc., 329 F.3d 1358 (Fed. Cir. 2003) and McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897 (Fed. Cir. 2007), it is prudent to provide an examiner with citations to office actions in copending applications. Until the court or Congress acts to limit the ever-expanding scope of the meandering duty of disclosure, which now encompasses information that may be of marginal significance, reasonable practitioners have little choice but to follow the mandate of the Federal Circuit and identify Office Actions in other applications that could later be found to be material.  It may also be prudent to identify relevant foreign applications and office actions in an IDS, in view of Therasense, Inc. v. Becton, Dickinson & Co., No. 2008-1511 (Fed. Cir., Jan. 25, 2010). Although the prosecution history of a foreign application cannot be used to construe patent claims, it may now render them unenforceable. The extent of disclosure required in a given case is, of course, a judgment call that depends on many factors, including the indeterminate “reasonable examiner” standard applied by the Federal Circuit.

The question is not whether information cited in an IDS is helpful to the actual examiner, but rather whether it may later be deemed material to a “reasonable” examiner by a court.  While an actual examiner is required to follow the rules of practice, including the 1992 amendments to Rule 56 limiting the scope of “material” information, a “reasonable” examiner is not similarly bound under Digital Control, Inc. v. Charles Mach. Works, 437 F.3d 1309 (Fed. Cir. 2006).  It is not possible, as a practical matter, to determine the scope of information that may be later be deemed material to an unreasonable “reasonable” examiner (i.e., one who, unlike actual examiners, is not fettered by the rules of practice).

As the Federal Circuit again emphasized in Therasense, “if this could be regarded as a close case, which it is not, we have repeatedly emphasized that the duty of disclosure requires that the material in question be submitted to the examiner rather than withheld by the applicant. See LNP Eng’g Plastics, Inc. v. Miller Waste Mills, Inc., 275 F.3d 1347, 1361 (Fed. Cir. 2001) (“[W]hen a question of materiality is close, a patent applicant should err on the side of disclosure.”); LaBounty Mfg., Inc. v. U.S. Int’l Trade Comm’n, 958 F.2d 1066, 1076 (Fed. Cir. 1992) (“[A close case] makes it all the more necessary that the [reference] should [be] disclosed to the examiner. Close cases should be resolved by disclosure, not unilaterally by the applicant.”).” Whether or not this be divinest sense, it is nonetheless Therasense.

A patent solicitor’s life has never been an easy one. 

Notes:

  • Claim 1 reads as follows: An antibody composition comprising antibody molecules, wherein 100% of the antibody molecules comprising a Fc region comprising complex N-glycoside-linked sugar chains bound to the Fc region through N-acetylglucosamines of the reducing terminal of the sugar chains do not contain sugar chains with a fucose bound to the N-acetylglucosamines, wherein said antibody molecules bind to CD52.

Jury Wrong on Anticipation; But Claims are Obvious as a Matter of Law

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[Updated to correct an error]

PatentLawPic901Therasense, Inc. (Abbott) v. Becton, Dickinson and Co. (Fed. Cir. 2010) (Case No. 2009-1008)

The Abbott patent covers a glucose meter designed with an additional sensor that ensures that a sufficient blood sample is obtained prior to the measurement. (Patent No. 5,628,890). Abbott sued BD and Nova Biomed for infringement. At the close of trial, the jury returned a verdict that the patent was infringed but invalid. The jury indicated that the patent was invalid for “anticipation or obviousness” and also invalid for failing the written description requirement of Section 112.

Law of Anticipation: On appeal, the Federal Circuit first determined that the jury instructions on the law of anticipation were incorrect. Notably, the district court judge had told the jury that “for anticipation, it is sufficient if the single reference would have informed those skilled in the art that all of the claimed elements could have been arranged as in the claimed invention.”  (emphasis added). Of course, anticipation requires that the reference disclose the same elements in the same arrangement. 

The requirement that the prior art elements themselves be “arranged as in the claim” means that claims cannot be “treated . . . as mere catalogs of separate parts, in disregard of the part-to-part relationships set forth in the claims and that give the claims their meaning.” Quoting Lindemann Maschinenfabrik GMBH v. Am. Hoist & Derrick Co., 730 F.2d 1452, 1459 (Fed. Cir. 1984).

Harmless Error: Under Federal Circuit law, erroneous jury instructions will lead to vacatur unless the error “could not have changed the result.”  Here, the jury decided obviousness and anticipation together and the Federal Circuit found that the overwelming evidence of obviousness renders the error on anticipation “harmless.”

“[A]n erroneous instruction on the law of anticipation could not have changed the result in this case if claims 11 and 12 would have been obvious as a matter of law, such that no reasonable jury could have returned a verdict that the claims are not obvious.”

Obvious as a Matter of Law: The appellate panel held here that the asserted claims “would have been obvious over [the Nankai reference] as a matter of law.”  The court’s approach to his holding of obviousness will be important for future summary judgment motions.  In particular, Abbott’s downfall was its own broad claim language that encompassed the prior art.  One clear difference between the claims and the prior art was admitted by the patentee to be “insubstantial.”

Written Description: Because the claims were obvious, the court did not consider the written description appeal.

Cross Appeal: BD filed a cross-appeal in the case asking the court to overturn the holding of infringement. The Federal Circuit rejected that cross-appeal — holding that it lacked jurisdiction. Notably, a cross-appeal is only appropriate when “a party seeks to enlarge its won rights under the judgment or to lessen the rights of its adversary under the judgment.” Here, the cross-appeal was improper because a holding of non-infringement would not change the ultimate outcome of the case.

Note: The Federal Circuit has also decided the related case No. 2008-1511 (Therasense, Inc. v. Becton, Dickinson and Co.). That opinion focuses on obviousness and inequitable conduct.

Patently-O Bits and Bytes No. 315: Reexaminations

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  • Appealing Reexaminations: PatentLawPic899Rob Sterne has published a 25–page report on “Appeals from the Central Reexamination Unit.” For the 15 BPAI decisions in inter-partes reexaminations, Stern reports that only 15 inter partes reexaminations have reached a BPAI decision. Of those, the median case took 26.5 months to brief and an additional 6.2 months for the case to be decided. Sterne’s reexamination center provides regular updates on reexamination issues.
  • Reexamination Gridlock: Hal Wegner reports: “Gridlock at all levels” of the inter partes reexamination process is “choking inter partes reexamination.”
  • Stays of Litigation: David Donoghue reports on the N.D. Ill case of of Card Activation Techs. V. Bebe Stores, Inc., No. 09 C 406, Slip Op. (N.D. Ill. Nov. 20, 2009) (Gottschall, J.) (case stayed pending reexamination even though the asserted claims were not those being reexamined)
  • Reexamining Design Patents: Scott Daniels writes on his reexamination blog about reexamination of design patents. [Link]  Of the 12 design patent reexaminations requests, two requests were denied based on no SNQ, two patents have been confirmed as properly issued, the other eight are still pending.  Eleven of the twelve requests were submitted by third parties.
  • Webinar on Reexaminations: Managing IP is offering a free webinar on “Patent Reexamination as a Litigation Strategy” on Feb 24 at 1pm. The talk is led by Novak-Druce attorneys.
  • Reexamination and Litigations: Joe Mullin reports on his Prior Art blog that 60+ photo-sharing defendants may be off-the-hook based on the cancelling of FotoMedia’s patent claims in reexamination. [Link] I looked up the reexamination (No. 90/010,143) and found that the PTO has issued a final rejection about half of the patented claims.
  • Crouch on Reexaminations: I’ll be speaking on reexaminations at the IP Law Summit hosted by the marcus evans company at the Doral resort in Miami Florida March 25–27. See you there.

 

Obama: “There’s nothing wrong with other people using our technologies. We just want to make sure that it’s licensed and you’re getting paid.”

Patent

The following excerpt comes from President Obama’s recent townhall meeting in Ohio on Friday, January 22, 2010:

* * * * *

Q    I’m an inventor, and I hold U.S. patent number 7,397,731.

THE PRESIDENT:  Okay.

Q    And before I ask my question I’d like to make a sales pitch.  (Laughter.)  If you can use my patent in your next election, I think you can raise a ton of money worldwide.  You should take a look at it.

THE PRESIDENT:  All right, we’ll take a look.  All right.

Q    If you can’t use it, the government could use it, and I could build a multibillion-dollar business here in Ohio.  (Laughter.)

THE PRESIDENT:  All right, we’ll take a look at your patent.  Go ahead, what’s your question?

Q    Yes, okay, it has to do with international patent rights.  With all this free trade and trade barriers falling, it’s really hard for an individual like me with a global-scope patent to file all over the world and get patent protection everywhere, and having to go overseas to fight infringement.  So if you’re going to drop trade barriers, maybe you can extend my patent rights to the foreign countries.

THE PRESIDENT:  Well, this is a great question, and this is a huge problem.  (Applause.)  Look, our competitive advantage in the world is going to be people like this who are using their minds to create new products, new services.  But that only helps us and helps you build a multibillion-dollar company if somebody can’t just steal that idea and suddenly start making it in Indonesia or Malaysia or Bangladesh with very cheap workers. 

And one of the problems that we have had is insufficient protection for intellectual property rights.  That’s true in China; it’s true for everything from bootleg DVDs to very sophisticated software.  And there’s nothing wrong with other people using our technologies.  We just want to make sure that it’s licensed and you’re getting paid.

So I’ve given instructions to my trade offices — and we actually highlight this at the highest levels of foreign policy  — that these are issues that have to be addressed because that’s part of the reciprocity of making our markets open.  And so when I met with President Hu of China, this is a topic that, at dinner, I directly brought up with him.  And — but as you point out, it’s got to be sustained, because a lot of times they’ll say, yes, yes, yes, but then there’s no enforcement on their end.

And one of the things that we’re also doing is using our export arm of the U.S. government to help work with medium-sized businesses and small businesses, not just the big multinationals to protect their rights in some of these areas, because we need to boost exports. 

Can I just say, we just went through a decade where we were told that it didn’t matter, we’ll just — you just keep on importing, buying stuff from other countries, you just take out a home equity loan and max out your credit card, and everything is going to be okay.  And it looked, for a lot of people, like, well, the economy seems to be growing — but it was all built on a house of cards.  That’s what we now know.  And that’s why if we’re going to have a successful manufacturing sector, we’ve got to have successful exports.

When I went and took this trip to China, and took this trip to Asia, a lot of people said, “Well, why is he going to Asia?  He’s traveling overseas too much.  He needs to be coming back home and talking about jobs.”  I’m there because that’s where we’re going to find those jobs, is by increasing our exports to those countries, the same way they’ve been doing in our country. If we increased our exports — our share of exports by just 1 percent, that would mean hundreds of thousands of jobs here in the United States.  Five percent — maybe a million jobs, well-paying jobs.  So we’re going to have to pry those markets open.  Intellectual property is part of that process.

* * * * *

 The invention claimed by the 7,397,731 patent is pretty cool. It is a “perpetual day reminder calendar.” 

PatentLawPic896PatentLawPic897

The patent was prosecuted by the inventors and it is not surprising that the claims are written in some sort of modified Jepson language. Claim 1 reads as follows:

1. A perpetual day reminder calendar for illustrating day, date and month information, including:

a) a set of day indicating plates with day indica; b) a set of month indicating plates with month indica; c) a set of date indicating cubes with date indica; d) a display stand with locating guides in one of three possible configurations, top holding, center holding or bottom holding;

the improvement wherein said day indicating plates and said month indicating plates identically shaped to fit around said date indicating cubes in a manner providing an interlocking of, said plates and cubes and the shielding of unneeded indica allowing only the needed day, date and month indica to be viewed and the interlocking pieces forming a calendar stack having a unique locating interaction feature with said display stand whereby the perpetual day reminder calendar can be easily manipulated for the sequential displaying of day, date and month indica.

Restriction Requirements and Double Patenting

Patent

Boehringer Ingelheim Int’l v. Barr Labs and Mylan Pharma (Fed. Cir. 2010)

This decision holds a terminal disclaimer cannot be effective if filed after the expiration date of the earlier patent. The decision expands scope of the safe-harbor created by 35 USC 121 against double patenting allegations. Here, 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.

(Opinion by Judge Linn and Joined by Judge Prost) Boehringer owns several patents listed in the FDA’s Orange Book as covering the drug Mirapex (pramipexole) used to treat symptoms of Parkinson’s disease. Boehringer filed this lawsuit after the defendant generic-drug manufacturers submitted abbreviated new drug applications (ANDAs) to the FDA as part of their efforts to begin making generic versions of the Mirapex.

The Mirapex patent family began with a 1985 patent application. That family has branched-out into more than fifty world-wide patents, including three US patents. Interestingly, the patent that issued from the original application (the “earlier patent”) is not listed in the Orange Book while a later issued patent is listed. By the time of this lawsuit, the Mirapex patents had passed their ordinary 17–year term of enforceability. However, the term of the later issued patent had been extended by over 4–years based on FDA delay under 35 USC 156.

Late-Filed Terminal Disclaimer : Despite their similarity, Boehringer had not filed a terminal disclaimer in the latest-filed US application. On the last day of trial, Boehringer decided to go ahead and file a terminal disclaimer. In spite of that action, the district court still held Boehringer’s asserted patent invalid under the judicially created doctrine of obviousness-type double patenting. In its opinion, the district court rejected the terminal disclaimer as inoperative because it was filed after the original patent had expired.

On appeal, the Federal Circuit agreed that a terminal disclaimer is not effective if filed after the expiration of the earlier patent.

By failing to terminally disclaim a later patent prior to the expiration of an earlier related patent, a patentee enjoys an unjustified advantage—a purported time extension of the right to exclude from the date of the expiration of the earlier patent. The patentee cannot undo this unjustified timewise extension by retroactively disclaiming the term of the later patent because it has already enjoyed rights that it seeks to disclaim.

Safe harbor of Section 121: Section 121 of the Patent Act provides a safe-harbor for family–member patents that issue after a restriction requirement:

A patent issuing on an application with respect to which a requirement for restriction … has been made, or on an application filed as a result of such a requirement, shall not be used as a reference either in the Patent and Trademark Office or in the courts against a divisional application or against the original application or any patent issued on either of them…

On appeal, the Federal Circuit first held that Section 121 can apply to protect “a divisional of a divisional” as in this case. Here, the court agreed that the later application was filed “as a result of” a restriction requirement because the restriction requirement in the original application was the original cause of the multiple US patent filings. The court did indicate that this safe-harbor would have been lost if the later-filed application violated the claim groupings of the restriction requirement.

In a prior decision, the court held that Section 121 applies to protect patents against double patenting rejections. See Geneva Pharms, 349 F.3d 1373, 1378 (Fed. Cir. 2003) (“Section 121 intervenes to prevent a nonstatutory double patenting rejection”).

Thus, because of the protection of Section 121, Boehringer did not need to file a terminal disclaimer.

In dissent, Judge Dyk argued that Section 121 should not apply here because the applicant had not strictly following the groupings in the original restriction requirement. Notably, the original restriction requirement divided the claims into ten groups — each group representing a separate invention while the later application was filed with claims from four of the groups.

Calculating PTA: PTO to offer “guidance for expediting requests.”

Patent

The USPTO has announced it will not seek further review of the Wyeth v. Kappos decision. In that case, the Federal Circuit held that the USPTO has been under-calculating the Patent Term Adjustment (PTA) owed to patentees based on USPTO prosecution delays. In its announcement, the USPTO indicated that is “preparing guidance for expediting requests for recalculation of patent term adjustments by the USPTO in light of the Wyeth decision.”

Although I have not completed the calculations, the patents perhaps most-likely to have some additional patent-term due to the Wyeth decision are those whose prosecution history include both (1) a pendency of more than three years from filing until either the patent issues or the applicant files an RCE and (2) a delay of more than 14–months from the application filing to the mailing of the first examination notification.* Prior to Wyeth, the PTO treated the beyond-three-year-issuance delay as overlapping with the the beyond-14–month-notification delay.

In a sample of 674 patents issued in the past year and filed after May 2000, I found that 479 (71%) both (1) had a pendency (smaller of filing-to-RCE and filing-to-Issuance) of greater than three years and also (2) had not received a qualifying notification with 14–months. Although I cannot say this with certainty yet, I believe that most of these newly issued patents deserve additional patent term under the Wyeth decision.

Note :*Notifications that qualify as first examination notifications include a Notice of Allowance, Final or Non-Final Rejection, Restriction Requirement, and an Ex Parte Quayle Action. Pre-examination notices such as a notice of omitted items or notice of incomplete application typically do not satisfy the PTO’s duty of meeting the 14–month deadline.