(Published with permission from Stu’s Views).
Patent Continuation Changes: “No earlier than October 1, 2007”
The PTO provides the following notice: [LINK]
On July 9, 2007, OMB concluded its review of the Continuations and Claims rule changes. The final rules will be made public when they are published in the Federal Register, which is expected to be later this summer. The rules will become effective at least 60 days after publication in the Federal Register, and no earlier than October 1, 2007.
The IPO provides the following report:
PATENT CONTINUATION AND CLAIMS RULES EXPECTED TO BE IN EFFECT IN OCTOBER — At a conference in New York yesterday, a speaker from the USPTO said the new patent rules on continuation applications and numbers of claims are expected to be published in August and in effect in October. IPO believes the rules are likely to be less severe than those that were published for comment in 2006.
PATENT CONTINUATION AND CLAIMS RULES EXPECTED TO BE IN EFFECT IN OCTOBER — At a conference in New York yesterday, a speaker from the USPTO said the new patent rules on continuation applications and numbers of claims are expected to be published in August and in effect in October. IPO believes the rules are likely to be less severe than those that were published for comment in 2006.
According to an internal e-mail published on the Patent Hawk site: [LINK]
An internal USPTO team is currently working on details of implementing the rule changes. Examiners and managers will be given information and training on the new rules once they are published in the Federal Register. Additionally, management is currently discussing with POPA the appropriate process for negotiating any impacts the rules package may have.An internal USPTO team is currently working on details of implementing the rule changes. Examiners and managers will be given information and training on the new rules once they are published in the Federal Register. Additionally, management is currently discussing with POPA the appropriate process for negotiating any impacts the rules package may have.
When are CAFC Opinions Released?
This data is incedental to other research that I’m working-ona and may be important for investors. Each topo-level in the graph represents 2%. “Published Opinions” are precedential opinions. “Unpublished Opinions” include both non-precedential written opinions and decisions released without opinion.
Patently-O TidBits
- Please send me your write-ups and client-alerts regarding McKesson. I’m looking for your approach to the issues. dcrouch@gmail.com.
- Over the past 25 years approximately 350 CAFC case decisions include dissenting opinions. Judge Newman is clearly the most prolific dissenter both in terms of absolute numbers and relative rate. Judge Newman has penned 115 of the dissents — 33% of the total, and her dissent rate per year on the court (4+) is almost double the nearest other judge. Judge Moore may be the rising alternative voice. In less than a year of service, she has already filed two dissents. (Source – Lexis search).
- Aharonian v. Gutierrez continues rolling along. Patent commentator and activist Greg Aharonian along with David Pressman, David Lentini, and Steve Morsa filed suit against the Government earlier this month. The charge: Margaret Peterlin’s apointment as PTO deputy director was “illegal and an abuse of discretionary power.” In particular 35 U.S.C. 3(b) requires that the deputy directory have “a professional background and experience in patent or trademark law,” and there has been no showing that Peterlin had any such qualifications prior to taking the job. Of course, after serving for two months as deputy director, she now does have experience. Like Director Dudas and your Patently-O author, Ms Peterlin graduated from the University of Chicago Law School.
- The anonymous Patent Troll Tracker has an interesting post on the shift in patent filings from the Northern District of California to the Eastern District of Texas. 2006 was the first year that more patent cases were filed in the EDTX than in the NDCA. Projected 2007 numbers have EDTX with more than twice the number of patent cases as NDCA. [LINK].
- Patent Law Jobs — One way to track potential law jobs is through an RSS link. http://feeds.feedburner.com/PatentLawJobs.
- Patently-O on Facebook: Connect with Patently-O readers.
Over the past 25 years approximately 350 CAFC case decisions include dissenting opinions. Judge Newman is clearly the most prolific dissenter both in terms of absolute numbers and relative rate. Judge Newman has penned 115 of the dissents — 33% of the total, and her dissent rate per year on the court (4+) is almost double the nearest other judge. Judge Moore may be the rising alternative voice. In less than a year of service, she has already filed two dissents. (Source – Lexis search). Patented Method of Arbitration :
Cybersettle v. National Arbitration Forum (NAF) (Fed. Cir. 2007) (non-precedential)
Cybersettle owns the patent on a computerized dispute resolution method. Disputing parties make settlement bids into a computer. If there is a close-enough match between the parties, the case is settled. A party may pre-submit multiple bids to be used in consecutive bidding rounds.
The National Arbitrators Forum (NAF) is a private corporation that handles arbitration and was sued for infringement — apparently after conducting 100,000+ such resolutions. NAF lost its infringement suit, but appealed on claim construction.
Cybersettle’s claimed method includes the steps of “receiving a plurality of demands [and] a plurality of settlement offers.” The lower court, however, did not require the receipt of multiple offers and demands. Rather, the claim was construed to be satisfied if the system “has the capacity to receive multiple offers and demands, even if ony one demand and one offer are received.”
On appeal, the CAFC reversed, finding that a claimed method requires actual practice of the method — not simply the capability.
A patented method is a series of steps, each of which must be performed for infringement to occur. It is not enough that a claimed step be “capable” of being performed.
On remand, the district court will need to determine what portion of NAF’s infringing actions included multiple offers and demands.
In the course of their operation, the accused … systems would infringe (assuming all the other claim limitations were satisfied) only when they received multiple demands and multiple offers; proof that those systems were capable of receiving multiple demands and multiple offers is not proof that they ever performed the claimed methods.
Vacated and remanded.
Notes:
Are Administrative Patent Judges Unconstitutional?
In his recent essay [LINK], Professor John Duffy raises the shocking point that since 2000, the appointment process of BPAI Judges has been unconstitutional. Generally, administrative officers must be appointed by a cabinet level official. Under 35 U.S.C. 6, however, the PTO director appoints the board. This disconnect, created by the 1999 patent reform measures, creates a serious constitutional problem.
If Professor Duffy is right (1) the law must be changed; (2) recently appointed BPAI judges will need to be re-appointed in a proper manner; and (3) any pending BPAI appellant could raise the issue as a challenge to BPAI authority so long as the panel includes recently appointed judges.
In re Metoprolol Succinate Patent Litigation (Fed. Cir. 2007).
Astra holds the patent on Toprol-XL (Metoprolol succinate) and sued several generic ANDA filers. On summary judgment, a Missouri Federal court held Astra’s patent invalid for improper obvious-type double patenting and unenforceable. Astra appealed for inequitable conduct during prosecution.
Double-Patenting: A later patent claim will be invalid for obviousness-type double patenting if it is not patentably distinct from an earlier claim from a commonly-owned patent. This analysis involves construction of both sets of patent claims.
[T]he critical inquiry remains whether the claims in the [prior] application define an obvious variation of the invention claimed in the … patent [at issue].
Normally, obviousness-type double patenting is avoided by filing a terminal disclaimer. Here, however, a secret inventorship and ownership dispute prevented such action.
Invalidity affirmed.
Inequitable Conduct: On summary judgment, the district court also found the patent unenforceable based on Astra’s failure to notify the PTO of the inventorship dispute during prosecution. Inequitable conduct, however, is rarely found on summary judgment. Here, the CAFC saw potential holes in proof of intent — finding that the “district court erred in equating the presence of an incentive with an intent to deceive on summary judgment.”
Dissent: Judge Schall dissented
Declaratory Judgment Jurisdiction Denied in Biotech Research Patent Case
Benitec Australia v. Nucleonics (Fed. Cir. 2007)
Benitec’s infringement suit against Nucleonics was derailed by several factors. Perhaps most critically, the Supreme Court’s Merck v. Integra decision expanding the research exemption of 271(e)(1) left Benitec with no viable infringement claim. Benitec voluntarily dismissed its claims against the defendant Nucleonics and also issued a covenant not to sue for Nucleonics current activities. (Covenant submitted within its appeal opposition brief).
In the meantime, Nucleonics had filed declaratory judgment counterclaims — asserting invalidity and unenforceability. Nucleonics wants the patent invalidated to remove any investor concerns regarding future products. On appeal, the CAFC determined whether DJ jurisdiction still exists in this case.
The Supreme Court’s jurisdiction requires “a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune.
DJ jurisdiction clearly existed at the time of filing. However, when the controversy disappears, so does jurisdiction. Here, the CAFC found that the controversy was gone and that Nucleonics “future work” was too speculative and might not be infringing anyway.
We also recognize that Nucleonics wishes to receive the benefit of a ruling on the validity and scope of Benitec’s patent now, while Nucleonics undertakes any nascent animal work. There is currently, however, no “substantial controversy, between [Benitec and Nucleonics], of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune, 127 S. Ct. at 771. And there may never be. Although Nucleonics lost the appeal, it certainly won a major victory by forcing Benitec to issue a covenant not to sue.
Dismissal affirmed.
In Dissent, Judge Dyk would have allowed the DJ case to continue:
Supreme Court precedent requires that, if a patentee files an infringement lawsuit and the particular claim of infringement is mooted, a counterclaim for invalidity should not be dismissed unless the patentee demonstrates that there is no possibility of a future controversy with respect to invalidity. See Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 98 (1993). In my view, Benitec made no such showing.
Notes:
- Sitting by designation, Judge Whyte penned the opinion. This is only the second CAFC opinion where a judge sitting by designation cast the deciding vote, and is the only CAFC case where a judge sitting by designation penned an opinion and another judge dissented. The N.D. California IP Bar has often called for Judge Whyte’s appointment to the CAFC. This opinion my provide some guidance as to his potential jurisprudential conduct.
- Although formally a loser, Nucleonics’ appeal forced Benitec into issuing a covenant not to sue — a major litigation victory.
Patent Reform 2007
The LexisNexis Major Newspaper database includes most large market newspapers. The database was searched for articles discussing “patent reform.”
In today’s news, are the reports that the House Bill is out of committee. However, without major coalition building amendments, the legislation is unlikely to become law.
BPAI Pecedential: Obviousness of a Combination
Ex parte Catan (BPAI 2007).
Catan’s invention involves using a bioauthentication device (e.g., fingerprint scanner) to authorize credit-account orders. On appeal, the Board of Patent Appeals & Interferences (BPAI) affirmed the Examiner’s finding of obviousness based on a combination of references.
As we know, a combination of familiar elements used according to known methods is probably obvious unless it yields unpredictable results. Obviousness determinations at the PTO are, at least theoretically, made easier by giving claim terms “their broadest reasonable construction.” In Catan’s case, for instance, the claimed ‘consumer electronic device’ could reasonably include a combination of base and remote stations communicating over a wireless network. (no “local” requirement).
Two pieces of prior art were presented: Nakano disclosed everything except that a password was used instead of the bioauthentication device, and Harada disclosed a fingerprint scanner. A third reference, Dethloff, taught that bioauthentication can substitute for a password.
This really is an easy example of obviousness:
“The claim is to a structure already known in the prior art that is altered by the mere substitution of one known element for another element known in the field for the same function. The facts themselves show that there is no difference between the claimed subject matter and the prior art but for the combination itself.”
The Board goes-on to say that the linking-reference (Dethloff) was not necessary, but it makes the case against the applicant even tighter. Motivation for the combination is also found in Harada, which also discusses various types of authorization techniques.
Notes:
- This case would probably have been affirmed before KSR.
- Reasons for combining prior art must still be explained.
- Winners provide at least some “unpredictable results.” (What could this applicant have argued? – some potential credit users are fearful of losing their password and others are especially prone to forgetting their password. . . the invention opens protected credit transactions to a whole new segment of the population. A $20k study could probably support this theory…)
Patent Reform: Required Pre-Filing Search and Patentability Analysis
The PTO’s accelerated examination program (formerly petition to make special) requires that the applicant conduct a prior art search and provide an extensive discussion of how the submitted prior art relates to each claim. As mentioned in earlier Patently-O posts, I expected that the program somewhat of a prototype — if all goes well, the PTO may require a preliminary search and discussion of prior art findings for all cases.
The future is here: The recently amended Senate Bill includes orders for the PTO Director to require search reports and patentability analyses for all filed applications (except for those filed by “micro-entities”). Failure to submit a report would result in abandonment. A new 35 U.S.C. Section 123 would read as follows:
“The Director shall, by regulation, require that applicants submit a search report and other information and analysis relevant to patentability. An application shall be regarded as abandoned if the applicant fails to submit the required search report, information, and analysis in the manner and within the time period prescribed by the Director. Applicants from micro-entities, as defined in section 124 of this title, shall not be subject to the requirements of any regulations promulgated pursuant to this section.”
In the past, IPO President Marc Adler has suggested on his blog that patentees should conduct pre-filing searches. [LINK]. Of course. Mr. Adler’s comments suggest only a voluntary system.
Notes:
- Look for a salary increase for quality patent searchers.
- This amendment is found in the 2nd Manager’s Amendment.
Exam Question: Prior User Rights?
The currently pending patent reform bill would create an expanded prior user defense to patent infringement. Under the proposal, an accused infringer would not be liable for infringement if it had been commercially using the invention at least one year before the patent application filing date. The defense would extend to affiliates and assigns.
However, an invention that in commercial use more than one year before the filing date would usually be found unpatentable as anticipated. Can you provide example situations where prior user rights might be important?
Ex Parte Kubin: Overcoming the Deuel
Ex Parte Kubin (BPAI 2007) (Precedential)
Kubin’s patent claims are directed to a cDNA molecule (NAIL) that serves as an NK cell surface marker. During examination, the examiner found them obvious. On appeal to the Board of Patent Appeals and Interferences (BPAI or Board), the applicant constructed an argument based on In re Deuel (Fed. Cir. 1995), that its cDNA claims cannot be “made obvious by mere knowledge of a desired protein sequence and methods for generating the DNA that encodes that protein.” (Quoting Deuel).
The Board, however, affirmed the rejection, finding the claims invalid because the cDNA structure would have been “obvious to try.” This case likely eviscerates any strength still remaining in Deuel.
[T]he Supreme Court recently cast doubt on the viability of Deuel to the extent the Federal Circuit rejected an “obvious to try” test. Under KSR, it’s now apparent “obvious to try” may be an appropriate test in more situations than we previously contemplated. . . .
Thus, isolating NAIL cDNA was “the product not of innovation but of ordinary skill and common sense,” leading us to conclude NAIL cDNA is not patentable as it would have been obvious to isolate it.
Kubin’s claims were also challenged on enablement and written description because they claimed only 80% identity with the described DNA sequence.
On enablement, the Board noted a parallel from its obvious to try analysis. Although there are certainly caveats, the Board appears to have held that a compound that is obvious to try is necessarily enabled because it would not require undue experimentation to make and use the invention.
The amount of experimentation to practice the full scope of the claimed invention might have been extensive, but it would have been routine. The techniques necessary to do so were well known to those skilled in the art.
Written Description: On the other hand, the Board found that “appellants did not describe the invention [] sufficiently to show they had possession of the claimed genus of nucleic acids.”
Rejections affirmed on obviousness and written description.
Notes:
- This is one of two precedential BPAI opinions for 2007.
- The application appears to be owned by Immunex, a company now owned by Amgen after a $17B purchase.
35 U.S.C. 101: Patentable Subject Matter
In his most recent “top-ten” paper — Hal Wegner identifies four pending appeals that challenge the court’s current broad patentable subject jurisprudence:
- In re Nuijten (SN 09/211,928);
- In re Comiskey (SN 09/461,742);
- In re Bilski (SN 08/833,892);
- In re Ferguson (SN 09/387,823)
It is quite possible that something from this set of cases will eventually produce a Supreme Court decision. In 2006, the Supreme Court initially granted certiorari on the issue of subject matter patentability in Metabolite v. LabCorp. That case was later dismissed without decision (as improvidently granted). However, a block of justices appear ready to apply new subject matter limits once the right case comes along.
In Nuijten, the PTO refused to issue a patent on a novel type of signal unless the patentee included a limitation directed to a specific mode of transmission (e.g., smoke signal, electromagnetic, etc.). Nuijten argues that bares signals should be patentable subject matter under Section 101. That case was argued in February 2007, and a decision is expected soon. IPO’s brief supports Nuijten and broad application of patentable subject matter.
In Comiskey, the CAFC requested supplemental briefing on patentable subject matter issues. The claims involve a method of handling arbitration (that does not require any machine assistance). Section 101 was not raised by the Examiner, Board, or PTO Solicitor, but was raised sua sponte by the CAFC. During the appeal, the PTO representative indicated that Comiskey was successful in the current appeal (on obviousness) that the PTO would likely raise 101 issues on remand.
Bilski similarly involves claims to a method of managing risk, but is not tied to any particular form of technology – such as an electronic computer. AIPLA’s amicus brief supports Bilski and a broad interpretation of patentable subject matter. Briefing is now complete, but arguments have not been scheduled.
Ferguson is still in the briefing stage. (Ferguson’s opening brief, filed last week, was rejected as non-compliant). Although not yet public, Ferguson’s claims apparently claims a method “of marketing a product.” Fish & Richardson is handling the appeal.
Notes:
Do Patents Discourage Innovation?
Two former Boston University Law School Colleagues occupied New York Times headlines on Sunday in a discussion of the economics of patent law. Michael Meurer and Jim Bessen are both economists and both law professors. Over the past few years, the pair has compiled a tremendous amount of economic data regarding patents and companies who patent.
Meurer & Bessen’s bottom line: On average, the patent system is bad for innovation. They agree innovator firms often profit from their own patents. However, the pair’s data shows that the innovator firms are also the ones most likely to be targeted by other patent holders. (litigation, licensing, etc.) In today’s system, they find, the disincentives created by other people’s patents outweighs the incentives to build your own portfolio. I.e., on average, the patent system discourages innovation. (Patents do a much better job in pharmaceuticals and much worse job in IT.)
Meurer & Bessen do not suggest dismantling the patent system — rather, they believe that a number serious reform measures are needed to shift the balance back to a positive state where patents incentivize innovation.
Their reform proposals call for clear predictable patent boundaries — something that every patent practitioner knows is a serious problem. Unfortunately, the current reform proposals hardly even touch this major issue.
Their book, Do Patents Work?, will be out in 2008 (Princeton). For now, you can find snippits of the research at the following links:
Reasons for Allowance Do Matter
PharmaStem Therapeutics, Inc. v. Viacell, Inc. (Fed. Cir. 2007)(Read Part I of our analysis)
In addition to regular examination, the asserted patents had also been reexamined by examiners at the PTO. Later, during litigation, several already cited references were used by courts as invalidation tools.
Patents are given a presumption of validity. When previously considered references are asserted in an invalidity defense, the presumption of validity is even stronger. Courts reason that such a challenge “bears the added burden of overcoming the deference that is due to a qualified government agency presumed to have done its job.”
Here, however, the CAFC gave little weight to the Examiner’s review of references after finding a misstatement in the Examiner’s reasons for allowance.
The examiner … summarized her analysis of the prior art by stating that none of the cited references “addresses the presence of hematopoietic stem cells in umbilical cord or placental blood, that these cells may successfully be cryopreserved, or that, as a collection from a single human at birth, these cells may comprise an amount that is sufficient to effect hematopoietic reconstitution of a human adult.” That explanation is flawed for three reasons. First, as we have explained, the prior art references and the admissions in the specification address the presence of hematopoietic stem cells in cord blood, even though the references may not conclusively prove their presence. Second, Koike established that cord blood could be cryopreserved without substantial losses in the population of progenitor cells; the inventors contributed nothing more with respect to cryopreservation, as their mouse experiments were not performed with cryopreserved blood. Third, while the joint specification states that the amount of cord blood obtained at the time of birth would often be sufficient to transplant an adult, the inventors reached that conclusion simply by comparing the known properties of bone marrow against the results of routine testing of their own cord blood samples.
Although left ambiguous, it appears that the flaws in the Examiner’s final analysis gave the courts reason to take an entirely fresh look at the references in question.
Patently-O TidBits
Three blogs I (re)started reading today:
Patently-O Jobs continues to grow rapidly. 100,000 views in less than two weeks. Most popular categories:
- – US – MidAtlantic and South
- – US – Northeast
- – US – Silicon Valley & SF
- Emp – Corporate (in-house)
- Emp – Law Firm
- Tech – Biotech
- Tech – EE / CompSci
- Tech – Mech / Aero
- Work – Paralegal / Legal Secretary
- Work – Patent Agent
- Work – Patent Litigation
- Work – Patent Prosecution
Continuation Changes: Where we stand and What to Do
Current status of the USPTO’s changes to continuation and claiming practice:
- Rules Approved: Two sets of final rules have been approved by the Bush administration (OMB).
- Preliminary Rules Softened?: The preliminary rules published by the PTO limited the number of continuations that could be filed based on any given invention (continuation limitations) and also limited the number of claims per application that would be examined (claim limitations). Unsourced leaks from within the PTO indicate that the final approved rules are somewhat softened from those originally released. The exact content of the final rules will not likely be available until the PTO publishes them in the Federal Register.
- Potential Rules: Hal Wegner and others have indicated that the new rules will potentially limit continuations for new applications to one RCE and two continuations. Further continuations would likely be available after showing cause. For applications already filed, the PTO may allow three continuations. Claim may be limited to twenty-five total claims, five of them independent.
- Timing: The PTO apparently has the green-light to move forward. The rules can become effective within 30–days of publication in the Federal Register. My expectation is that the publication will occur in the range of Aug-Oct and the effective date will be in the range of Sept-Nov.
- Currently Pending Applications: It is almost certain that currently pending applications will fall within the continuation rules. The currently pending applications will likely be allowed a third continuation. However, there are some indications (rumors) that recently filed applications (that have not yet received an office action) will be limited to two continuations. Any continuations filed after the rule change will fall within the claim-number limitations.
- What to do now?: Many companies have reportedly already filed continuation applications in the hope of avoiding some of rule-change sting. That approach appears prudent – especially for valuable cases where multiple continuations have already been filed. You may want to talk with David Boundy (DBoundy@Cantor.com) about fighting the rules and Kevin Noonan (noonan@mbhb.com) about how your company should handle the rule changes. It appears that neither the IPO or AIPLA are actively opposing the rule changes.
Best Book for Learning Patent Law Practice?
A skilled and motivated paralegal or assistant can more than double the effectiveness of a patent prosecution office. A Patently-O reader and new prosecution paralegal recently submitted the following question:
Hi, I’m currently working as a Paralegal in an Intellectual Property in-house legal department. Can you please tell me what will be the best book to learn patent prosecution from start to finish? I want to know dates, categories, subject matter (i.e., issued, published, granted and so forth).
Suggestions for our reader? Are there particular conferences or workshops best suited for paralegals and assistants?
OMB approves proposed changes to continuation practice.
The ORIA has concluded its review of the PTO proposed rules with approval . . .finding them “consistent with change.”
Links:
=====
| AGENCY: DOC-PTO | RIN: 0651-AB93 |
| TITLE: Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications Containing Patentably Indistinct Claims | |
| STAGE: Final Rule | ECONOMICALLY SIGNIFICANT: No |
| RECEIVED DATE: 04/10/2007 | LEGAL DEADLINE: None |
| ** COMPLETED: 07/09/2007 | COMPLETED ACTION: Consistent with Change |
| AGENCY: DOC-PTO | RIN: 0651-AB94 |
| TITLE: Changes to Practice for the Examination of Claims in Patent Applications | |
| STAGE: Final Rule | ECONOMICALLY SIGNIFICANT: No |
| RECEIVED DATE: 04/10/2007 | LEGAL DEADLINE: None |
| ** COMPLETED: 07/09/2007 | COMPLETED ACTION: Consistent with Change |
Notes: Thanks to Brad Pedersen for the tip.