The PTO has established an extensive set of new rules for accelerated examination and the associated petition to make special (PTMS). The new rules require much more from the applicant, but also lead to “a final decision by the examiner within 12 months from the application filing date.”
On Thursday, November 2nd at 1:00 Chicago Time, the PTO will hold a one-hour live web-cast to provide information on the process and its “benefits.”
David French recently sent me an e-mail that got me thinking about the rise in foreign-originated patents in the US patent system.
In most countries, the majority of newly issued patents are foreign originated. David notes that in Canada, for instance, “consistently has had over 90% foreign participation in its patent system for over 50 years.”
Although locals have a majority here in the US, foreign-originated patents are approaching the 50% mark and are quickly on the rise. I suspect that our strong tradition of local innovation and patenting is a large driver in the political economy of the US patent system. Because US patent owners are usually located in the US, there is political support for strong patent rights. Will this support decrease as the percentage of foreign-owners rises?
Notes:
The PTO is been conducting a quality survey of examination. Here are some sample questions:
6. Consider all rejections you have received over the past 3 months. How often do you think the rejections made under the following statutes were reasonable in terms of being technically, legally, and logically sound with respect to:
35 U.S.C. 101 Rejections (Rarely – . . . – Always)
35 U.S.C. 102 Rejections (Rarely – . . . – Always)
35 U.S.C. 103 Rejections (Rarely – . . . – Always)
35 U.S.C.112 Rejections, P1 (Rarely – . . . – Always)
35 U.S.C. 112 Rejections, P2 (Rarely – . . . – Always)7. In the past 3 months, how would you rate overall examination quality.
Very Poor
Poor
Fair
Good
Excellent10. What should the USPTO focus on to improve examination quality? Please be specific.
We will look forward to some interesting results. Since 103 is hot, lets do our own survey.
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Review-in-short by Mark Lemley,
William H. Neukom Professor of Law, Stanford University
Errors and Omissions
A novel by Paul Goldstein,
Stella W. and Ira S. Lillick Professor of Law, Stanford University
$17 from Amazon
A legal thriller about copyright law? And not even about trial, but about rights clearance in order to get errors and omissions insurance? Not likely. But my colleague Paul Goldstein‘s new novel, "Errors and Omissions," grabs your attention from the first page and never lets it go. He manages to work murder, chases, love, McCarthyism, the Hollywood blacklist, and a trip to Europe into the otherwise mundane life of a down-on-his-luck copyright lawyer. Along the way, he keeps us entertained with a quick and enjoyable read.
I am reliably informed that Paul’s next novel will be a thriller about patent law, featuring a Markman hearing. Talk about raising the bar . . .
Links:
Qualcomm v. Nokia (Fed. Cir. 2006).
A 2001 license agreement between Nokia and Qualcomm includes an arbitration clause. The agreement apparently does not cover all of Nokia’s products, and in 2005, and Qualcomm sued Nokia for patent infringement. The parties disputed whether the arbitration clause should apply here. Writing for a two-judge majority, Judge Prost explained that the parties “clearly and unmistakably” intended that the patent questions be arbitrated instead of a court as evidenced by the agreement’s incorporation of the AAA rules.
On remand, the district court will send the dispute to arbitration unless the arguments supporting arbitrability of the issues would be “wholly groundless.”
Notes:
Halliburton v. M-I LLC (E.D. Tex., Oct 18, 2006).
Halliburton decided to take advantage of the E.D. Texas patent excitement and sued M-I for infringing its patents directed to a method of drilling a borehole without losing “fragile gel” drilling fluid.
On motion, the district court granted summary judgment of invalidity based on indefiniteness. In particular, the court could not find any way to give meaning to the claim term “fragile gel.”
Datamize makes clear that adequate support in the specification can make a purely subjective claim term definite. However, when, as here, the specification provides only a subjective definition for a subjective claim term, there is no “objective anchor” by which skilled artisans can identify the bounds of the claims.
Notes:
Using a random sample of issued patents examined by the “business method” art units, I counted the number of issued patents that had received non-final and final rejections and also those where the applicant had filed a notice of appeal. The results show that about 95% of business method patents were subject to non-final rejections as compared with about 80% of patents taken from the general population. The differences between the groups for final rejections and appeal notice filings are even greater. The conclusion here is the same as in Part-IV: Business method patent applications receive a higher level of resistance than do other technologies.
This study focuses on business methods, but I’m gathering data for other areas. Any guesses of which technologies have relatively high (or low) rates of rejection before issuance?
Notes:
Evidence Based Prosecution:
The entries of Public PAIR are riddled with errors and discrepancies. However, it is still true that more PAIR entries in a file usually indicates that there were more filings by the applicant and more resistance from the PTO.
The Data: The above graph compares data from a random sample of 7,000+ issued patents with patent numbers ranging from 6,000,000 to 6,999,999 (General Population) with issued patents from the same range that were examined within Art Unit 3600 (a sample of 954 patents). I counted the number of PAIR entries for each patent and used that data to calculate histogram information. Data-points represent range-buckets — e.g,. 0–4 PAIR entries, 5–9 PAIR entries, …
The Results: The prosecution histories of Business Method patents include significantly more entries. [33.4 entries for average BM patents as opposed to 27.0 for average GP patents].
As I have discussed before, business method patents are slow to make it through the patent office. One reason for the delay is a large queue in applications awaiting initial examination. However, this data preliminarily confirms that another reason for delay in Business Method is that the PTO is putting up a relatively higher level of resistance. Anecdotally, this resistance is seen in the “second pair of eyes” review and harder fights on Section 101 issues. The PTO might counter that many business method patents are poorly drafted, thus making the process more difficult.
Notes:
Evidence Based Prosecution:
The phrase “Patent Term Adjustment” elicits two divergent reactions from patent prosecution specialists. PTA is wonderful because it provides a strong counterbalance to USPTO delays. On the other hand, PTA rules are complicated and it is easy for a practitioner to unintentionally lose-time.
In general, the PTA is an attempt to retain a patent term of approximately 17–years from issuance. Under the rules, the statutory 20–year term is increased for certain PTO-related delays and is decreased for other Applicant-related delays.
Scott Kamholz of Foley Hoag has written a great guide to PTA entitled “Patent Term Adjustment for Fun and Profit.” The guide was originally published this Fall in IP Today, but is now available on Patently-O: File Attachment: PTA for Fun and Profit.pdf (147 KB).
Highlights of the article include:
At some point, this may become moot as the PTO is considering simplifying the PTA.
Medrad v. Tyco (Fed. Cir. 2006).
In October 2005, I discussed the district court case involving Medrad. In that case, the district court held that a Section 251 Reissue can only be used to correct an error in the specification, drawings or claims and cannot be used to correct a procedural error that is not reflected in the patent grant itself. During prosecution, the patentee had filed a second reissue to correct a mistake made during the prosecution of the first reissue. (The patentee failed to file a supplemental reissue declaration in compliance with PTO Rule 1.175). The lower court found that correction of that mistake did not fall within the guidelines of Section 251.
On appeal the CAFC sided with the patentee by giving a broad meaning to the statutory phrase “[invalid] by reason of the patentee claiming more or less than he had a right to claim in the patent.” In particular, the unanimous appellate panel found that the phrase does not literally mean “claim more or less” but rather that the phrase “encompass[es] any error that causes a patentee to claim more or less than he had a right to claim.” Thus, a reissue can apparently be filed based on any error that would result in invalid claims.
Notes:
Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue.
Patent Misuse: Plaintiffs who are fighting-off patent misuse allegations should take a look at Professor David McGowan’s recent article where he argues that under Illinois Tool Works, courts may limit tying-misuse remedies to compensate the actual victims of the misuse.
Courts should not invoke the drastic no-enforcement-at-all remedy unless they also find that an infringement plaintiff has a high degree of market power or a dangerous probability of obtaining it in the market for the tied product, and that enforcement of the patent against parties other than the infringement defendant would maintain that power or aid in acquiring it.
For defendants, you should be prepared with evidence (and perhaps pleadings) that show how the patentee’s misuse was particularly harmful to you.
Law Jobs: The guys at the Legal Job Board LegalMojo may have missed this one: The U.S. Judicial Conference approved a new United States Magistrate Judge position for Marshall, Texas. Full public notice for the position; PDF version of application form for the position. The deadline for submitting applications is Friday, October 20, 2006.
The CAFC has now explicitly opened the door to fee-based regulation at the USPTO.
Figueroa v. U.S. (Fed. Cir. 2006).
Fighting a lost cause, Figueroa sued the U.S. government using PTO fees to fund other federal programs (fee diversion). From FY 1991 to FY 2004, for instance, the PTO collected about $11.1 billion in fee revenue and only spent about $10.6 billion. The remaining $545 million was returned to the general fund.
Figueroa alleged that the PTO fees “exceeded congress’s power under the Patent Clause” of the Constitution and was also an un-apportioned (and thus unlawful) direct tax on intellectual property.
Using a rational-basis test, the two-judge majority found that Congress had plenty of reasons for charging the fees that it did. Most notably, the court found that an acceptable basis for high fees would be to provide incentives against certain types of patent prosecution activities.
[E]ven if fees exceeded the existing and predicted costs of operating the patent system, Congress could also rationally decide to set fees above what is needed to meet the funding needs of the PTO in order to deter the filing and prosecution of certain types of patent applications. The Supreme Court has recognized that Congress may legitimately impose taxes or fees in order to discourage undesirable behavior.
In particular, the court noted that high fees could be used to discourage the filing of applications associated with vanity patents, likely invalid patents, non-commercial uses, and patents designed to inhibit competition.
This gives constitutional backing to the fee-based regulation at the PTO, such as charging large fees for additional claims or continuations. In a recent letter to Jon Dudas, the IPO opposes any “collaborative” or “platinum plated” examinations because those “would discriminate against [patentees] with limited resources, draw the examining staff away from traditional examination, and create different classes of patents in the eyes of the courts.” [IPO Letter]
Links:
For those of you who do not want to take the computer-based registration exam, the USPTO has announced that it will hold three days of paper-based registration exams on July 16, 20, and 30, 2007.
Although registration materials are due by April 9, 2007, you should apply early before the exam is sold-out.
Bolstered by a recent district court win in Sony v. Dudas, the PTO has declared that it will no longer reexamine all claims of a patent as a matter of course. Rather, the PTO will only reexamine claims for which “a) reexamination was requested, and b) a substantial new question of patentability (SNQ) was raised.”
Documents
Last month, TiVo won its patent case against EchoStar. The district court judge issued a permanent injunction and refused to stay the injunction pending appeal. In an emergency action, the CAFC immediately issued a temporary stay. Now, the CAFC has reportedly determined that the stay will remain in force until the appeal is concluded. [Can someone forward the order to dcrouch@gmail.com]. [Background]
Aero v. Intex and Wal-Mart (Fed. Cir. 2006)
Aero has patented an air mattress inflation control system that it advertises using the registered mark “ONE TOUCH.” A jury found that Intex (and Wal-Mart) were infringing both the patent and the trademark. The judge awarded $5.80 million for willful patent infringement ($2.95 in compensation, doubled for willfulness) and $1 million for the trademark infringement.
On appeal, the CAFC looked at the damage award and found some double-counting.
This case presents the question of whether Aero’s recovery of both patent and trademark infringement damages represents an impermissible double recovery.
Under Federal Circuit, double recovery for the “same injury” is inappropriate.
At trial, Aero had used similar evidence of Intex sales to show damages for both the patent and trademark claims. Because Aero did not show any other harm to its trademark apart from the sales of the patented product, the CAFC found that the injury was identical, and thus cancelled the trademark recovery.
The case is remanded to the district court for entry of judgment in Aero’s favor in the principal amount of $5.9 million. [Still enough for a good night’s sleep]
Software Patents: A better calendar — If you are interested in Academic Intellectual Property Conferences, Mike Madison hosts the master calendar here: http://madisonian.net/conferences/
DyStar v. Patrick Co. (Fed. Cir. 2006).
DyStar’s patent discloses a process for dyeing textiles with catalytically hydrogenated leuco indigo. After a trial, the jury found that Patrick infringed claims 1–4, that the patent was not invalid, and that $90,000 of damages should be awarded.
Patrick appealed the lower court’s denial of a new trial on obviousness grounds. A new trial should not awarded when “a jury, viewing the evidence in the light most favorable to [DyStar], could have properly reached [its validity] conclusion.” The CAFC reviewed the denial for abuse of discretion. (Level of review based on Fourth Circuit law).
As is often the case, all the elements of DyStar’s invention were already known in the art — the question was whether there was some obvious motivation to combine the prior art together.
Suggestion to Combine: In recent weeks, we have seen a common thread in CAFC jurisprudence indicating that “the suggestion test is not a rigid categorical rule.” Rather, the suggestion to combine references can be found from “any number of sources, including common knowledge, the prior art as a whole, or the nature of the problem itself.”
It is difficult to see how our suggestion test could be seen as rigid and categorical given the myriad cases over several decades in which panels of this court have applied the suggestion test flexibly. Obviousness is a complicated subject requiring sophisticated analysis, and no single case lays out all facets of the legal test. DyStar’s argument and the above-cited commentary highlight the danger inherent in focusing on isolated dicta rather than gleaning the law of a particular area from careful reading of the full text of a group of related precedents for all they say that is dispositive and for what they hold. When parties like Dystar do not engage in such careful, candid, and complete legal analysis, much confusion about the law arises and, through time, can be compounded.
Holding: Claims are obvious
In a footnote, the Court defends its KSR decision — a decision currently being briefed at the Supreme Court.
In KSR, we vacated a district court’s grant of summary judgment of invalidity for obviousness. The district court found a motivation to combine not in the references but “largely on the nature of the problem to be solved”, which we did not deem erroneous. Teleflex, Inc. v. KSR Int’l Co., 119 Fed. App’x 282, 287 (Fed. Cir. 2005) (unpublished). Rather, we vacated because the court did not explain sufficiently its rationale, and failed to make “findings as to the specific understanding or principle within the knowledge of a skilled artisan that would have motivated one with no knowledge of [the] invention to make the combination in the manner claimed.” Id. at 288 (citation omitted).
In an impressive history (that is begging for a full analysis), the CAFC sets out the full scope of the flexibility of the suggestion test and notes how the test is well grounded in Supreme Court jurisprudence and has always been flexible. This is one for the casebooks.
Three patent attorneys, Steve Nipper, Doug Sorocco, and Matt Buchanan have teamed up again — this time with some legal recruiting specialists to form the new job board LegalMojo.
The site will likely have a heavy emphasis on IP needs, although the board is open for all types of legal jobs. Even before coming on-line, the “rethinkers” lined up an impressive group of potential offerings.
The price for listing jobs is quite low, so I would expect that many small firms and in-house jobs will be listed in the future. Check it out.
Notes