The America Invents Act (AIA) of 2011 authorized the creation of a set of administrative trials (AIA Trials), including Inter Partes Review (IPR) proceedings, Post Grant Review (PGR) proceedings and transitional Covered Business Method Review (CBM) proceedings. In each of these proceedings, anyone can file a petition to challenge an issued patent, and, after instituting the trial, the Patent Trial and Appeal Board (PTAB) will decide whether the challenged claims should be confirmed or cancelled.
In 2006, David Grober won an academy award for the best technical achievement of the year for his “perfect horizon” camera stabilization head. The camera head is designed to compensate for motion during land, air, and sea operations of a camera. Grober’s patent No. 6,611,662 covers the camera head and is the subject of this appeal.
This case is like many that involve parallel legal proceedings. Grober filed an infringement action in 2004, Mako then filed an inter partes reexamination request – asking the USPTO to take a fresh look at the patent. The district court stayed the litigation until 2006. At that time, the court became antsy and reopened the case. After claim construction, the district court ruled that the accused products did not infringe the asserted claims and dismissed. Later, during the course of the appeal, the USPTO finally decided the reexamination by confirming the patentability of the asserted claims.
The primary issue on appeal is the construction of the claim term “payload platform.” The district court narrowly construed the term as limited to a “horizontal surface” and that consequently led to a non-infringement holding. To reach its conclusion, the district court highlighted Grober’s statements made to the PTO in the pending reexamination.
In reviewing the claim construction de novo, the appellate panel agreed that statements made in an ongoing, pending reeexamination were relevant to the claim construction. See Krippelz v. Ford (Fed. Cir. 2012). In this case, however, the Federal Circuit held that the reexamination statements were not direct enough to constitute prosecution disclaimer.
Grober’s statements were not an unambiguous disavowal that clearly and unmistakably disclaims claim scope or meaning. In this instance, the reexamination history did not define or limit, let alone clearly and unmistakably disclaim, claim scope.
The appellate court’s approach here looked particularly to the words used by to the patentee in the reexamination to identify any actual limitations or disclaimers and refused to read-between-the-lines to find implied disclaimers. In this sense, the decision supports the long-held prosecution strategy of keeping the prosecution history file thin.
The Federal Circuit then offered its own broader construction of the term and remanded the case for reconsideration.
Comment: Although Grober may have escaped, this case highlights one of many ways that a parallel reexamination can serve as a trap for a plaintiff-patentee. These traps go well beyond the straightforward risk of having claims cancelled or narrowed.
The America Invents Act (AIA) expands the opportunity for third-party pre-issuance submissions in patent cases. Beginning September 16 of this year (2012), anyone will be permitted to submit published documents ('printed publications') that are relevant to the examination of a pending application along with a concise explanation of the importance of the documents submitted.
In a recently issued set of final rules, the USPTO outlines the procedures that it has put in place to handle the new filings. Changes To Implement the Preissuance Submissions by Third Parties Provision of the Leahy-Smith America Invents Act, 77 F.R. 42150 (2012).
Targeted preissuance submissions offer an extremely inexpensive mechanism for limiting competitor patent scope. The process has little downside (in most cases) but does require additional competitor monitoring. The effectiveness of the process has not been tested. Although the process has major limitations, I believe that it will serve as an effective tool in the hands of skilled practitioners. I have spoken with several attorneys who are already preparing their preissuance submissions to be filed in late September.
Key points:
Implementation: Although the pre-grant submissions cannot be filed before September 16, once that date passes, they may be filed in applications that were already on file with the USPTO. I know of some individuals who are already preparing materials for pre-grant submissions against competitor applications. Presumably they will file those sometime on or after September 16, 2012.
Deadlines: During the legislative process, the PTO supported these third-party submissions, but offered some concern that late-stage submissions could create problems for both patent applicants and for the USPTO examination process. Thus, for most cases the preissuance submission must be filed before the first office action rejection is mailed. In cases where there is no office action rejection or where the PTO works quickly, submissions will be allowed if within an alternative deadline of within six-months of publication. The PTO will not consider any submissions submitted after the notice of allowance.
Requirements: Submissions may be done anonymously and electronically, but must include (1) A list identifying the items being submitted; (2) a concise description of the relevance of each item listed; (3) a legible copy of each non-U.S. patent document listed; (4) an English language translation of any non-English language item listed; (5) a statement by the party making the submission that the submission complies with the statute and the rule; and (6) the required fee ($0 if fewer than three-documents submitted).
Results: The patent examiner is required to consider compliant third-party submissions in preparation for the next office action. The submitted documents will be listed on the face of the patent as considered.
How to make preissuance submissions more effective?: Some may have a more nuanced or longer-term strategy, but the usual realistic goal of a third-party submission is to limit the scope of a competitor's pending application. Barring retaliatory competitor action, the only downside is that a broad patent may still issue with a prosecution history reflecting that the examiner considered the submitted documents. No estoppel is created by the submissions. The identical argument will not be available during a later post grant review and may be more difficult to prove at trial than it would have been if never considered at the USPTO.
Quality Art: The best preissuance submissions will begin with on-point prior art. Examiners will not likely be tolerant of submissions that lack prima facie credibility.
Concise and Well Drafted: There is a large risk of examiners ignoring submissions that appear as a large stack of dense documents. The concise explanation should be designed to quickly lead examiners to a rejection based upon the submitted documents.
Explaining Known Art: Rather than submitting new prior art, applicants may re-submit art already in the file along with an explanation of how the art should be applied.
Reputation: Certain practitioners and entities will earn reputations as filing credible/incredible.
Protect Potential Space: Remember that the patent applicant is still likely to receive a patent. The pre-issuance submission is useful for limiting and defining patent scope. The record will reflect that the patent definitely does not cover X. With the normal unpredictability of claim construction, this defining role result can be quite helpful down the road if the patent is ever litigated. Practicing entities should use the process to clear a path for their own current and potential technology usage. As discussed below, a third party may be satisfied with the applicant adding a definition to a claim term rather than actually amending the claim.
Internal Prior Art: Remember that e-mails and other correspondence can potentially serve as printed publications under the patent laws. (See caselaw on 35 USC 102(a) & 102(b)).
Other Questions of Patentability: The statute calls for the submission of documents “of potential relevance to the examination” and is certainly not restricted to issues of novelty and nonobviousness. The rules do not allow an applicant to simply submit an argument without an underlying published document. For a definiteness issue, a dictionary definition may serve as the hook. For a new-matter question, the document could be the related parent application. For a patentable subject matter issue, the document might be Mayo v. Prometheus.
Arguments Serving as Published Evidence: A third-party challenging enablement might want to hire an expert to study the application; publish an expert report; and then submit the report (along with a concise explanation) following these new procedures. This approach appears to fit within the statute that allows the submission of “any … printed publication of potential relevance.” However, in its notice of final rules, the USPTO has indicated that it will not accept materials created and published merely for the purpose of challenging the pending application in question. The USPTO appears to understand that the statute is broadly written and thus does not directly prohibit the filing of such documents. The Office instead concludes that the submission would be rejected because the required concise explanation of such a document “would likely be deemed an improper attempt by the third party to impermissibly participate in the examination of the application because the relevance of the document being described is its discussion of the patentability of the application.” In this sense, the Office seems to be setting up a conflict between these new submission procedures found in 35 USC 122(e) and the prohibition on protests and pre-grant oppositions left unamended in 35 USC 122(c).
I believe that the USPTO is probably wrong on its analysis of the law here — in many (if not most) cases, this type of evidence should be allowed under the law. The statute does not provide a particular mechanism for challenging the PTO's refusal to consider these submissions, but the Office is unlikely be convinced on petition without resorting to the filing of a federal case. As an aside, the filing of a non-compliant submission will likely trigger the applicant's duty of disclosure. In that case, the applicant will likely re-file the submission as part of an information disclosure statement.
Note: Some of these ideas came from reading Hal Wegner's useful report on Third Party Submissions: The Final Rule.
Bunzl and Bettcher are in a longstanding battle over the exclusive rights to make and sell a rotary knife blade used in meat processing. The patents include Bettcher’s Patent Nos. 7,000,325 and 8,074,363 and the pending lawsuits include three district court cases and an inter partes reexamination.
The ‘325 infringement lawsuit and the parallel inter partes reexamination were filed in 2008. Bunzl recently filed a declaratory judgment action on the newly issued ‘363 patent.
Bettcher is winning the reexamination. The USPTO Board of Appeals recently re–affirmed the examiner’s decision to confirm the patentability of the pending claims. Bunzl initially won the infringement lawsuit, but after being partially reversed on appeal, that case appears to be headed for a new trial in the near future.
In light of the pending infringement trial, Bunzl asked the Federal Circuit to stay the reexamination appeal proceedings so that the whole case could be appealed at once. In a short non-precedential opinion, Judge Newman has rejected that plea. She writes:
The power of the Court to stay proceedings is incidental to its inherent power to control the disposition of the cases on its docket. See Landis v. North Am. Co., 299 U.S. 248, 254 (1936). Here, we cannot say Bunzl has shown that staying proceedings for such a lengthy period of time is warranted.
Thus, the cases will continue in parallel. The appellate briefs will likely be due before the trial and jury verdict. The appellate decision will then likely issue around the same time as the judge’s post-verdict order on the inevitable motions. There is a likelihood that the results from the two bodies will be inconsistent. However, our system has a fairly consistent approach to determining the hierarchy of decision in patent cases.
Parallel patent proceedings within the US have created a whole new set of litigation strategies and difficulties. Of course, those strategies will change once again in the coming years as we implement the new post grant review proceedings of the AIA.
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Note: In this order, Judge Newman was the sole decision maker acting in her role as motions judge for the month.
Jar Chen Wang‘s company Wincell sells the TwistCar and owns patent No. 6,722,674. PlaSmart sells the similar product – PlasmaCar. The toy cars look virtually identical to one another and operate the same way – twisting the handlebars make them go.
Wang threatened, PlaSmart sued for DJ and then filed for inter partes reexamination in 2008. As with all reexaminations, the issue is whether the prior art renders the claimed invention unpatentable. The BPAI found several of the claims patentable. On appeal, however, the Federal Circuit has reversed.
USPTO Board factual findings are reviewed for substantial evidence. This is a low standard that results in an affirmance so long as more than a scintilla of evidence supports the Board’s conclusions. Legal conclusions made by the Board are reviewed de novo. Thus, as you might imagine,
Obviousness is somewhat tricky – the ultimate conclusion of obviousness is a question of law. However, that conclusion must be based upon factual predicates outlined in Graham v. John Deere Co., 383 U.S. 1 (1966).In KSR, the Supreme Court wrote that “[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). That statement seems to be one applied as part of the final question of obviousness that would also be reviewed de novo on appeal.
Factual versus Legal Conclusions: The language of the opinion here is somewhat unclear, but the Federal Circuit appears to have accepted all of the BPAI’s factual findings regarding the scope and content of the prior art; the level of skill in the art; and the differences between the claimed invention and the prior art. However, the court rejected the BPAI’s ultimate conclusion obvious – holding that the “minor distinctions” identified by the Board were insufficient to distinguish the claimed invention from the prior art. Another way to look at the case is that the court rejected the Board’s factual conclusion that the differences between the claimed invention and the prior art were major.
This case highlights the trouble that I have in our obviousness jurisprudence. In most cases, the Graham analysis does not do a very good job of leading to an answer of the obviousness question. Thus, even after determining the scope and content of the prior art; the differences between the claimed invention and the prior art; the level of ordinary skill in the prior art; and any secondary factors, the court (or PTO) still has a large amount of analysis/discretion in determining whether those factors lead to a conclusion of obviousness.
Guest post by Sarah Burstein, who will joining the faculty of University of Oklahoma College of Law this August. Her research focuses on design patents, an important piece in the smartphone wars. – Jason
Apple, Inc. v. Samsung Electronics Co., Ltd. (Fed. Cir. 2012) Download 12-1105
Panel: Bryson (author), O’Malley (concurring in part and dissenting in part), Prost
On May 14th, the Federal Circuit issued its first opinion in the world-wide, multi-front patent war between Apple and Samsung. In this opinion, the Federal Circuit considered the district court’s denial of Apple’s motion for a preliminary injunction based on infringement of three design patents and one utility patent, affirming in part and vacating in part. The opinion provides notable holdings in the areas of irreparable harm and nonobviousness.
In the motion, Apple argued that Samsung’s Galaxy S 4G and Infuse 4G smartphones infringed U.S. Des. Patent No. 618,677 (“the D’677 patent”) and U.S. Des. Patent No. 593,087 (“the D’087 patent”) and that Samsung’s Galaxy Tab 10.1 tablet computer infringed U.S. Des. Patent No. 504,889 (“the D’889 patent”). Apple also argued that all three of the devices—along with Samsung’s Droid Charge phones—infringed U.S. Patent No. 7,469,381 (“the ’381 patent”), which claims the iPad and iPhone “bounce” feature. The district court denied the motion based on, among other things, its findings that: (1) Samsung had raised substantial questions regarding the validity of the D’087 and D’889 patents; and (2) although the D’677 and ’381 patents were likely valid and infringed, Apple had failed to provide sufficient evidence on the issue of irreparable harm.
On appeal, the Federal Circuit affirmed the denial of preliminary injunctive relief with respect to the D’677, D’087, and ’381 patents based on a lack of irreparable harm. The Federal Circuit concluded that the district court had not abused its discretion in finding no likelihood of irreparable harm with respect to the D’677 and ’381 patents. And although the Federal Circuit rejected the district court’s conclusion that the D’087 was likely anticipated, it still found no abuse of discretion in the denial of the preliminary injunction “[b]ecause the irreparable harm analysis is identical for both smartphone design patents.”
On the issue of irreparable harm, the Federal Circuit rejected Apple’s argument that the district court erred in requiring Apple to demonstrate a nexus between the claimed infringement and the alleged harm. According to the Federal Circuit: “If the patented feature does not drive the demand for the product, sales would be lost even if the offending feature were absent from the accused product. Thus, a likelihood of irreparable harm cannot be shown if sales would be lost regardless of the infringing conduct.” On appeal, Apple had argued that the district court had erred in rejecting Apple’s dilution theory of irreparable harm. The Federal Circuit disagreed, noting that “[t]he district court's opinion thus makes clear that it did not categorically reject Apple's ‘design erosion’ and ‘brand dilution’ theories, but instead rejected those theories for lack of evidence.” However, the Federal Circuit agreed with Apple that it “would have been improper” for the district court to completely reject “design dilution as a theory of irreparable harm.” The Federal Circuit did not explain why it “would have been improper” or provide any further explanation.
The Federal Circuit did, however, vacate the denial of preliminary injunctive relief with respect to the D’889 patent. The district court had found that the D’889 patent was likely obvious, using a 1994 tablet design (the “Fidler tablet”) as the primary reference. In the design patent context, any finding of obviousness must be supported by a primary reference—i.e., there must be “something in existence” that has “basically the same” appearance as the claimed design. If a primary reference is found, then the analysis proceeds. But if there is no primary reference, the inquiry ends—the design cannot be obvious. The Federal Circuit disagreed with the district court, holding that the Fidler tablet was not a proper primary reference. The Federal Circuit stated that “[a] side-by-side comparison of the two designs shows substantial differences in the overall visual appearance between the patented design and the Fidler reference,” pointing to the following illustration:
Without a primary reference, the district court’s finding that Apple was unlikely to succeed on the merits could not stand. And the district court had found that Apple had demonstrated a likelihood of irreparable injury with respect to the D’889 patent. However, because the district court had not made any findings on two of the preliminary injunction factors—the balance of harms and the public interest—the Federal Circuit remanded this portion of the case for further proceedings.
In her partial dissent, Judge O’Malley disagreed that the case should be remanded for further proceedings. According to Judge O’Malley, the district court’s discussion of these factors with respect to the other smartphone patents supported the entry of an injunction against the Galaxy Tab 10.1. Judge O’Malley also expressed concern that the remand would create undue delay, stating that “courts have an obligation to grant injunctive relief to protect against theft of property—including intellectual property—where the moving party has demonstrated that all of the predicates for that relief exist.”
Comment: The Federal Circuit’s conclusion regarding the Fidler tablet was surprising. Only a few years ago, a leading commentator observed that “[a]s a practical matter, [the requirement that the designs have ‘basically the same’ design characteristics] means that the primary . . . reference in a §103 design case needs to illustrate perhaps 75-80% of the patented design.” Perry J. Saidman, What Is the Point of the Point of Novelty Test for Design PatentInfringement?, 90 J. Pat. & Trademark Off. Soc’y 401, 419 (2008). Using that rule of thumb—or really, any ordinary meaning of the phrase “basically the same”—the Fidler tablet would easily qualify as a primary reference. Of course, that would not mean that the D’889 patent was obvious; indeed, there does not seem to be (at least from the public portion of the record) any persuasive evidence that an ordinary designer would have been motivated to modify the Fidler tablet in the manner shown in the D’889 patent. But this strict reading of the “basically the same” requirement may make it more difficult to prove obviousness in future design patent cases. And while it’s too early to declare a trend, it is worth noting that the Federal Circuit affirmed a rather strict reading of this requirement last year in Vanguard Identification Systems, Inc. v. Kappos (a case I discussed in a recent article).
The other especially striking portion of this opinion is the Federal Circuit’s unquestioning acceptance of Apple’s “design dilution” theory of irreparable harm. This sort of express equation of the harm caused by design patent infringement with the harm caused by trademark dilution is unprecedented in design patent case law (although not in the academic literature) and Apple’s theory deserves more attention and consideration than the Federal Circuit appears to have given it in this case.
In his new book Infrastructure: The Social Value of Shared Resources(OUP 2012), Brett Frischmann explores how infrastructural resources contribute to social welfare. He defines a set of resources — infrastructure — in terms of the manner in which they create value and then examines the conditions under which such resources ought to be managed as a commons. He develops a framework for understanding the demand for infrastructure and the advantages and disadvantages of managing infrastructure in a nondiscriminatory manner. Prof. Frischmann then applies this framework to a variety of infrastructural resources — roads, telecommunications networks, the environment, and, of particular interest to readers of this blog, cultural resources including those which are protected by patent and copyright law.
I'm going to focus my comments on Frischmann's theory of intellectual infrastructure and how it relates to the structure of intellectual property law. Just a few days after the release of Infrastructure, the Supreme Court handed down its decision in Mayo Collaborative Services v. Prometheus Laboratories. That case presented the question whether certain diagnostic claims were within the scope of patentable subject matter under section 101 of the Patent Act. The Court held that they were not, in a manner that is strikingly consistent with Frischmann's theory. Hence the title of my post. But Frischmann's theory may also go a long way toward bringing some order to an area of patent law that has long been confused.
Let's start with the concept of intellectual infrastructure. Frischmann explains that intellectual or cultural resources can be infrastructural in the same manner as physical goods. So long as the resource is a "nonrival input into a wide variety of outputs" (275), it satisfies the characteristics of infrastructure that Frischmann so richly describes. In turn, that suggests that the case for managing the resource as a commons is strong. Frischmann then explains how this concept applies to ideas. Ideas, he writes, often are infrastructure (subject to a number of complications that I'll put to the side). So in his view, intellectual property should protect implementations of ideas but not the ideas themselves (286). To sort one from the other, Frischmann turns to the concept of abstraction in copyright law and argues that patent law should follow a similar path.
Now consider Prometheus. The inventors in that case discovered a correlation between the effectiveness of a drug and the amount of certain metabolites of that drug in a patient's blood. Their patent claimed a method of optimizing the dosage of the drug based on that correlation. The method was simple: (1) administer the drug; (2) determine the amount of metabolites in the patient's blood; (3) make an inference about drug dosage based on the correlation. Doctrinally, the question before the Court was whether this amounted to a claim on a "natural law" – the correlation between drug dosage and metabolism that happens in the human body – which would be unpatentable under a long-standing exception to the scope of patentable subject matter, or a patentable application of that law.
Substitute "idea" for "natural law" and the analogy to Frischmann's analysis becomes clear. Indeed, there is no reason why a "natural law" cannot be an "idea" as Frischmann describes it. A natural law is the articulation of a principle; whether that principle is an infrastructural idea turns on its characteristics, not its origins. In Prometheus, the Court, with Justice Breyer authoring the unanimous decision, held that the patent claimed the natural law itself and not an application of that law. The Court held that the the patent claims did not "add enough to their statements of the correlations . . . to qualify as patent-eligible processes that apply" those correlations (slip op. 8). The "administering" and "determining" steps, in the Court's view, comprised "well-understood, routine, conventional activity already engaged in by the scientific community" and so were "not sufficient to transform unpatentable natural correlations into patentable application of those regularities" (slip op. 11). Or, in Frischmann's terms, the patent claims did not amount to an implementation of an idea; they claimed the idea itself.
The rationale underlying the Court's decision also resonates with Frischmann's argument. Justice Breyer cast the decision in expressly functional terms. The danger, he wrote, is that because natural laws are "the basic tools of scientific and technological work," patents on natural laws "foreclose[] more future invention than the underlying discovery could reasonably justify" (slip op. 17). So too, the rationale for managing infrastructural resources as commons turns on the demand-side benefits: the spillovers and externalities that non-rival consumption of infrastructure resources enables. In this way, Prometheus is quite consistent with Frischmann's injunction against propertizing ideas.
Frischmann's theory also suggests some provocative solutions to problems that have long plagued the doctrine of patentable subject matter. Section 101 of the Patent Act defines as patentable any "new and useful process, machine, manufacture, or composition of matter." But the Supreme Court has long carved out from those categories several broad exceptions. They are usually described by the terms "laws of nature, natural phenomena, and abstract ideas," but at times appear also to encompass "products of nature," "mental processes," "mathematical formulae," "algorithms," and the like. Infrastructure may offer a unifying principle for choosing to exclude these things from the scope of patentable subject matter. Frischmann writes that "[t]he Supreme Court should stop referring to abstract ideas" in its patentable subject matter jurisprudence and should instead "make clear that ideas are not patentable" (300). Viewed through the lens of infrastructure, Prometheus is a step in this direction. The correlations at issue in that case were actually quite narrow. At the very least, they were not "abstract" in the sense that the "concept of hedging risk" found to be unpatentable in Bilski v. Kappos was abstract. Yet the correlations in Prometheus and the concept of hedging in Bilski are both ideas. And they are ideas that have the characteristics of infrastructure — nonrival inputs into a wide range of outputs. The Court's functional analysis suggests that the problem in both cases was that granting exclusive rights to ideas that have the characteristics of infrastructure might foreclose future innovation.
I would go even further. The next big patentable subject matter case is likely going to be the Public Patent Foundation's ongoing challenge to gene patents held by Myriad Genetics. Doctrinally, the question raised in that case — whether the patents claim "products of nature" – is different than the question whether a patent claims an idea. But to the extent that genes can be characterized as infrastructure — and I think there is a reasonable case that they can be — the functional analysis described above should apply. The exclusion of products of nature from the scope of patentable subject matter may therefore be consistent with the exclusion of ideas from the scope of patentable subject matter.
It has also been a matter of debate among academics and practitioners whether and to what extent the inquiry into patentable subject matter serves a function different from other requirements of patentability like novelty or nonobviousness. To the extent that infrastructural resources ought to lie beyond the scope of patent protection for functional reasons, the patentable subject matter screen will capture this insight in a way that other patentability doctrines will not. But this is a topic for further exploration.
Frischmann's book is an important contribution across a wide range of fields. It is a terrific achievement and I think its influence will continue to grow as we grapple with the implications of its analysis.
Guest Post by Jeremy Sheff. In view of the pending Monsanto case, I asked Professor Sheff to provide some of his thoughts on the patenting of self-replicating technologies – DC. This essay is cross-posted on PrawfsBlawg.
Self-replicating technologies, once the subject of theory and fantasy, are now upon us. The original self-replicating machine—the living organism—has already been harnessed by biotechnology engineers and, more to the point, their lawyers. The next wave of self-replicating technologies, be they nanomedical robots or organic computers, are not far behind. Rather than triggering a “grey goo” apocalypse, these technologies are, at present, raising far more prosaic issues of intellectual property and antitrust law.
Those issues have now apparently caught the attention of the Supreme Court. A few weeks ago, the Court called for the views of the solicitor general on the certiorari petition in the case of Bowman v. Monsanto. This is the latest in a series of cases in which the Federal Circuit has addressed the application of the doctrine of patent exhaustion to the genetic engineering technology embodied in Monsanto's "Roundup-Ready" herbicide-resistant seeds. Seeds are the prototypical self-replicating technology, and a number of similar herbicide-resistant crops are in the pipeline of the largest agribusiness concerns. In each of the Roundup-Ready cases, a farmer has argued that Monsanto's patent rights do not extend to the second generation of soybeans grown from a patented first-generation seed. In each case, the Federal Circuit found for Monsanto and against the farmers.
Patent exhaustion (or "first sale") doctrine serves as a limit on patent rights, and provides that once a patentee has made an authorized sale of an embodiment of its patented invention, its patent rights with respect to that embodiment are exhausted, and the purchaser is free to use or re-sell the embodiment as it sees fit. Like analogous doctrines in copyright and trademark, it is motivated by competition concerns. Its aim is to enable the creation of downstream or secondary markets in patented articles, and to prevent patentees from using their intellectual property rights to gain market power in markets other than the market for the patented technology. When the Supreme Court last spoke on the issue, it rebuked the Federal Circuit for giving these pro-competitive policies insufficient weight. It seems to be considering an encore in the Roundup-Ready cases. For reasons I'll explain after the jump, I think that would be a mistake.
The Federal Circuit's analysis of patent exhaustion in the Roundup-Ready cases is admittedly not a model of the judicial craft. Framing the issue as a formal question whether a second-generation soybean is a different "article" than the first generation seed from which it grew, the court's main justification for its result was the bare assertion that any alternative result would "eviscerate" Monsanto's patent. But this is a question-begging explanation, and there are other, better reasons why a patentee's sale of a single embodiment of its self-replicating technology ought not to exhaust patent rights with respect to the second, third, or nth generation of the technology that is propagated from that first embodiment. Moreover, these reasons are consistent not only with the reasons for granting patent rights in the first place, but with the pro-competitive principles that justify limiting those rights through exhaustion doctrine.
To get at these reasons, I propose a thought exercise. Let's imagine that the Roundup-Ready cases came out the other way–that purchasers of Roundup-Ready seed from Monsanto were free, as a matter of patent law, to use all subsequent generations of soybeans grown from those first purchased seeds however they saw fit. What would we expect the Monsantos of the world to do? How do we believe their behavior might be influenced by this new legal framework?
One possible answer to this question is: not at all. It may be that the additional revenues to be derived from selling additional embodiments of a self-replicating technology to the same customer are trivial (perhaps due to the structure of demand), and that the prospect of any one customer re-selling a subsequent generation of the technology to another potential customer of the patentee is remote. Nanomedicine, particularly personalized nanomedicine, may one day prove that this is a possible result. But in the agriculture context, it strikes me as unlikely.
Where the technology at issue is an input for the production of a commodity, and the demand for that technology is broad and essentially undifferentiated, I would expect that the possibility of re-sale of nth generation seeds by the patentee's customers would significantly eat into the patentee's revenue stream, potentially making it impossible for the patentee to recoup the investment in research and development required to develop the technology in the first place. This is the classic free-rider problem that patent law is supposed to prevent: we preserve the incentive to engage in costly research and development by giving the inventor a limited-time monopoly. Other scholars have noted that this free-rider rationale is particularly salient for inherently self-disclosing inventions (inventions that are easy to copy once they have been introduced to the public). I would add that self-replication exacerbates the problem of self-disclosure: the patentee selling an embodiment of its invention would not only be teaching competitors how to practice the invention, it would in essence be building their factories as well.
So there are sound justifications grounded in the innovation policies underlying patent law for the Federal Circuit's rulings in the Roundup-Ready cases. But of course, patent exhaustion doctrine is concerned not only with innovation policy, but also with competition policy. This brings me back to my earlier question: how would we expect the Monsantos of the world to react to the free-rider problem if patent law did not protect them against competition from nth generation copies of their own first-generation products? I can imagine two possible strategies a technologist might pursue to circumvent the free-rider problem: contract and secrecy. And I think both of these alternatives are inferior to the patent solution crafted by the Federal Circuit on competition grounds.
Take the contract approach, which has been explicitly advocated by Yee Wah Chin, one of the attorneys representing the interests of Monsanto's farmer customers. To avoid the problem of free-riders Monsanto might, for example, restrict sales of its seeds to customers who sign a license agreement in which the customers undertake to monitor the uses of nth generation embodiments. So, a farmer might have to agree to sell his soybean crop only to buyers who have their own license agreement with Monsanto, or to Monsanto itself. Or Monsanto could include field-of-use restrictions in its licenses, as Ms. Chin proposes: "Monsanto could have licensed seedmakers to sell seed embodying Monsanto technology on condition that the second-generation seed be either consumed or sold to buyers who agree to either consume the seed or isolate that seed from other seed and sell the seed only for consumption."
This does not strike me as a pro-competitive result, for a few reasons. First, it incentivizes Monsanto to extend its influence into downstream markets–such as the market for commodity soybeans and their derivative products–in ways that it would have little incentive for under the Federal Circuit's approach. This downstream market creep is precisely the type of expansion of patent rights that exhaustion doctrine is supposed to prevent, out of fear that the patentee's interests are not likely to be consistent with the efficient functioning of those downstream markets. Second, and perhaps more importantly, forcing Monsanto to look to contract rights to protect its investment in research and development shifts the costs of monitoring and enforcing the Roundup-Ready patents from Monsanto itself onto its customers, who are likely to face higher monitoring costs.
We must remember, Monsanto's customers are largely farmers, who lack Monsanto's economies of scale, its greater expertise with its own technology, and its understanding of the functioning of the markets for that technology. Moreover, shifting enforcement responsibility from the patentee to its customers is likely to create agency costs where they would not otherwise exist. A farmer who is paying Monsanto a premium for Roundup-Ready seeds probably has far weaker incentives to vigorously monitor for violation of Monsanto's license terms than does Monsanto itself, which is reaping the premium. Finally, in the event that a customer breaches these monitoring obligations, either maliciously or negligently, Monsanto's technology could fall into the hands of a competitor who is not in privity of contract with Monsanto and thus (absent any unfair competition type of claim) would be free to use the nth generation seed (in which Monsanto's patent rights are exhausted) to compete with Monsanto. An individual farmer is likely to be judgment-proof in the face of the claims Monsanto might make should such a competitive threat emerge outside the reach of its licensing provisions, which once again leads us to the original problem: how would we expect Monsanto to respond to this risk of free-riding?
This brings me to the last alternative to the Federal Circuit's solution in the Roundup-Ready cases: secrecy. Monsanto might seek to prevent free-riding by refusing to release its technology to public view, and relying on trade secret protection to protect against free-riding. But in order to preserve its secret (a prerequisite of trade secret protection), Monsanto would have to ensure that nothing it released into the market disclosed its genetic technology. As I noted above, self-replication can be seen as a heightened form of self-disclosure, and so this type of secrecy would be fairly hard to maintain. Indeed, I think the only plausible way of doing so would be to pursue a course of comprehensive vertical integration. Monsanto would not only have to be in the business of propagating seeds, but also in the business of cultivating and harvesting soybeans, and processing them into useful products (oil, animal feed, industrial adhesives, tofu, you name it) that do not reveal the genetic material at the core of Monsanto's invention. Even if this were technically possible (a big if), the effect on all sorts of markets, both for inputs and outputs of the soybean market, is likely to be catastrophically anti-competitive. Where the alternative is such drastic shocks to competition in the market for, e.g., miso paste, soy-fed livestock, and arable land, the Federal Circuit's decisions in the Roundup-Ready cases start to look surprisingly pro-competitive.
The big question in my mind, then, is not whether the Federal Circuit's reached the right result in the Roundup-Ready cases. Given the factual setting of those cases, I think the answer to that question is a relatively uncontroversial yes. The real question, to me, is whether the same holds true for self-replicating technologies other than seeds for agricultural commodities. I already noted above one type of self-replicating technology–personalized nanomedicine–that may not present the same incentives for patentees, their customers, and their competitors, as do herbicide-resistant soybeans. Given how little we can presume to know about the future development of other self-replicating technologies, it is likely unwise to try to set a rule today to govern the rights of downstream users for all such technologies that may arise tomorrow. And for this reason alone, it may be worth getting some discussion of the issue from the Supreme Court, which seems particularly sensitive (almost to a fault) to the hazards of establishing brittle legal rules to govern the unknown future of technology. If the analysis that emerges is more substantive and functionally-minded than the under-argued, formalist analysis of the Federal Circuit (admittedly, another big if), I would be happy to see the Court take the case, if only to put the type of issues I've discussed in this post on the table.
The threshold standard for initiating an inter partes reexamination was changed on September 16, 2011 – the enactment date of the America Invents Act. The revised law eliminates the old “substantial new question of patentability” standard and now requires “a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request.” This reasonable likelihood of prevailing (RLP) standard must now be met before the USPTO can initiate an inter partes reexamination.
In my initial review of the change, I wrote that the new standard is “stricter” than the old. Certainly, a reasonable likelihood of success is more difficult to prove than simply raising a substantial question. However, I must add an important caveat — the old standard required that the substantial question be “new” while the revised standard does not have such a limitation.
In a recent petition decision, the USPTO confirmed this analysis — indicating that the a reexamination request under the RLP standard can be based entirely upon issues previously addressed by the Office. In other words, “the determination of whether the question presented in the request are new is no longer a prerequisite of the determination of whether to order inter partes reexamination.” (Quoting from the petition decision) The USPTO wrote:
Whether the issue being brought forth for consideration has been addressed in a previous Office proceeding does not preclude reexamination under the current standard for ordering inter partes reexamination. Under 35 U.S.C. 312, the Office has the discretion to reconsider issues that have been addressed in the past, provided the estoppel provisions of 35 U.S.C. 317 do not apply.
In a footnote, the decision noted that the question of whether the raised objections to patentability are “new” is simply “not relevant to deciding this petition.”
Robert Frame had argued on behalf of petitioner that the new RLP standard should be interpreted as SNQ+. Frame pointed to the House Report on the AIA that stated:
The threshold for initiating an inter partes review is elevated from ‘significant new question of patentability’ -a standard that currently allows 95% of all requests to be granted — to a standard requiring petitioners to present information showing that their challenge has a reasonable likelihood of success.
As discussed above, that approach was rejected by the USPTO (CRU).
The patent being reexamined is No. 8,028,491 and covers a particular type of tactile warning surface units used to warn visually impaired individuals of a hazard (such as a curb). The design allows the surface units to be wet-set (in concrete) and also replaceable. This type of device is required in many situations in order to comply with requirements of the ADA.
In 2011, the patent holder (ADA Solutions) filed suit against several alleged infringers. On that same day, several of the accused infringers filed this reexamination request. (The parties are litigating other patents as well).
In re PepperBall Tech. (Fed. Cir. 2012) (non-precedential opinion)
In a non-precedential opinion, the Federal Circuit has affirmed a BPAI reexamination determination that PepperBall's patents are invalid as obvious. In reading the opinion, Hal Wegner wrote that the case serves as a "good teaching example of what will often be a futile appeal in future Inter Partes Review proceedings under the 'substantial evidence' standard of review." I agree with Hal that the low substantial evidence threshold required to sustain BPAI factual findings will make those difficult to overturn on appeal. However, as I discuss below, this case fails to be a good teaching example becaues it conflates review of the Board's factual findings with what should be de novo review of the ultimate question of obviousness.
The conclusion of obviousness (or non-obviousness) is a question of law that is reviewed de novo on appeal. However, substantial deference is given to the underlying factual determinations made by the Board. Those factual determinations will be upheld on appeal so long as supported by "substantial evidence." Thus, even if the appellate panel does not agree with the Board's factual finding, it can (and must) uphold the Board's factual finding so long as there is "more than a scintilla" of evidence in support. Although the Federal Circuit correctly recited the doctrine, my reading of the decision is that the court improperly applied the law and instead gave deference to the Board's legal conclusion of obviousness. In the end this may well be harmless error so long as the ultimate conclusion of obviousness is actually correct.
PepperBall Tech's invention relates to paintballs filled with peppery powder. A key feature of some claims was that the paintballs are only partially filled – 60% to 95% full. When stuffed over 95%, the powder clumps up and does not form a nice cloud around the victim's eyes. One prior art reference suggested adding weight to paintballs to optimize flight path. The Board held that the prior art's weight agent "was similar to PepperBall's modifying the fill percentage [and therefore] that it would have been obvious to modify the fill levels in a projectile within the recited range…"
On appeal, the Federal Circuit voiced some reticence with the Board's analysis – writing that "[t]his court in the first instance might not have reached the same conclusion as the Board on the similarity of PepperBall's differing fill levels and [the prior art's] weighting agent" because of the differing purposes explained above. The court went on to state that it, nevertheless, "does find substantial evidence to support the Board's finding of obviousness." That conclusion was based upon the court's own separate factual finding that the claimed range of 60% to 95% was "so broad in this context that a person of ordinary skill in the art likely would have tried fill levels within this range during routine experimentation."
The problem here, is that the Board's finding of obviousness is not supposed to be reviewed for substantial evidence, but instead reconsidered de novo on appeal. In the appeal, factual findings such as the similarity between the invention and the prior art need merely be supported by substantial evidence, but the appellate court must apply the much higher de novo standard when looking at the ultimate question of whether the invention obviousness. In reality, I have little faith in the current structure for determining obviousness. However, we do at least have a defined structure and procedure that the appellate court should follow.
This post addresses the Federal Circuit’s March 5, 2012, precedential opinion In re Staats, Appeal No. 2010-1443, in which Judge Dyk writes for the majority. In short, the Federal Circuit holds that it is bound by In re Doll, 419 F.2d 925 (CCPA 1970), and that both 35 U.S.C. § 251 and Doll permit the filing of a continuing reissue application to broaden patented claims beyond the statutory two-year period—even when the continuation claims are broadened—in a manner unrelated to any broadening aspect identified within the two-year period. For a more in-depth discussion of 140 years of reissue case law, legislative history, and statutory shaping pertaining to broadening reissue practice, including an analysis of the facts and oral arguments in Staats leading up to the opinion, please see the author’s publication Checking the Staats: How Long is Too Long to Give Adequate Public Notice in Broadening Reissue Patent Applications?, 2011 Duke L. & Tech. Rev. 009 available at http://www.law.duke.edu/journals/dltr/articles/2011dltr009.
One of the most straightforward ways patent owners can expand the limited monopoly of a patent is by seeking increased claim scope by one or more broadening reissue patent applications. While patent owners may narrow the scope of patent claims at any time during the life of the patent, they may only broaden claim scope for a limited period of time after issuance of the patent. See MPEP § 1412.03, discussing implementation of 35 U.S.C. § 251. Despite this relatively clear statutory provision in § 251, however, an expansive body of case law has construed the provision, dating back well over a century.
The Staats opinion had the potential to become the most definitive statement in broadening reissue practice in almost twenty years. Passing on such a wonderful opportunity, the CAFC instead blandly upheld Doll and bluntly invited the USPTO to seek en banc review. In fact, Judge Dyk’s majority opinion states, “If the PTO believes we should overrule Doll, that is a matter that must be presented to the en banc court.” Slip Op. at 11. Judge O’Malley’s concurring opinion, which concurs in the opinion’s judgment but not its reasoning, states, “To the extent the majority opinion is no more than a begrudging nod to Doll‘s precedential effect with an invitation to reconsider that decision, the majority opinion is wrong.” Slip Op. at 12 (concurrence at 1).
The Staats case presents a collision between two robust statutory interpretations and two equally weighty sets of policy considerations. On the one hand, the public-notice function cited by both the USPTO and the Board—and regarded as a hallmark of the protections in § 251—is crucial. The public has the right to know what is claimed and disclaimed in a patent, and one could argue that patentees should not be permitted to reshape their inventions throughout the life of the patent simply by lodging a “placeholder” broadening reissue application within two years of patent issuance, from which any number of potentially disparate continuing reissue applications could be filed. Allowing such activity without adequate safeguards could result in a scenario in which a competitor could potentially spend an obscene amount of money based on the perceived bounds of the limited monopoly granted by a particular patent, only to face an infringement action years later after the boundaries of the limited monopoly have shifted. Likewise, such activity may make it difficult for a competitor to assess whether it has freedom to operate in a particular technology—again because of shifting boundaries of the limited monopoly. Consistent with this perspective, the USPTO’s position in Staats held firm against effectively giving an applicant a license to unforeseeably shift from one invention to another through reissue well beyond the two-year statutory period. See Ex parteStaats, No. 2009-007162, 2010 WL 1725728, at *9 (BPAI Apr. 26, 2010).
On the other hand, as argued by Apple in the Staats appeal to the Board, the CCPA in Doll held that the intervening rights provided by 35 U.S.C. § 252 are potentially sufficient to counterbalance damage to public notice done by broadening reissues. Having initial public notice within two years of patent issuance should adequately balance the needs of patentees and the public. See Brief of Appellant-Petitioner, In re Staats, No. 2010-1443 (Fed. Cir. Dec. 16, 2010), 2010 U.S. Fed. Cir. Briefs LEXIS 1111, at *9–11. That is, there is a clear quid pro quo—in exchange for a reissued patent, the patentee must “surrender” the original patent. Furthermore, given the recent transparency in publication and prosecution practice for pending applications and reissue applications at the USPTO, applicants already surrender a great deal of secrecy before issuance of a patent or reissue patent. Any broadening reissue patent claims would, of course, require support by the patent specification or other claims, which could have effectively been part of public knowledge for years before the broadening. Therefore, one can argue that nothing would serve to hamper a competitor from developing a competing and noninfringing product with improvements in the years it would undoubtedly take for the USPTO to wade through applications, reissues, and continuations of those reissues.
Thus, a classic property-rights question looms large in the field of patent law: where do the rights of inventors end and the rights of the public begin? The rights of inventors to modify the scope of their claimed inventions, even after the patent issues, can directly conflict with the concepts of public notice and the public domain. The Patent Act currently permits broadening of claims so long as a reissue application showing intent to broaden is filed within two years of the original patent issue. Over the years, however, this relatively straightforward statutory provision has sparked a spate of disputes over its meaning and application.
Despite these disputes, the CAFC reaffirmed Doll, and Judge O’Malley’s concurrence expanded on its reasoning:
The MPEP and PTO Rule 175 are, moreover, consistent with all relevant case law interpreting § 251. As the majority notes, Doll concluded that § 251’s time limits are applicable only to the first broadening reissue application and do not, accordingly, bar further broadening changes thereafter. [In re Doll] 419 F.2d. at 928. This court has twice reaffirmed that reading of § 251, moreover. See In re Graff, 111 F.3d 874, 877 (Fed. Cir. 1997) (“The court in Doll simply held that the reissue applicant, in the course of prosecution of the reissue application, was not barred from making further broadening changes in the claims.”); In re Fotland, 779 F.2d 31, 34 (Fed. Cir. 1985) (“In Doll the Court of Customs and Patent Appeals held that when a broadening reissue application was on file within the two year period, the claims could be further broadened after the two year period.”). As the majority opinion makes clear, the PTO’s efforts to distinguish those cases so as to avoid the need to comply with their holdings stretch credulity. (Slip. Op. at 15, concurrence at 4.)
Even with the benefit of the last forty years of reissue case law—including Doll, In re Fotland (779 F.2d 31 (Fed. Cir. 1985)), Buell v. Beckestrom (22 USPQ2d 1128 (BPAI 1992)), In re Graff (111 F.3d 874 (Fed. Cir. 1997)), and now Staats—broadening reissue practice will likely remain a headache for patent attorneys. For the time being, though, we have a pill for that headache. Without any changes from a possible en banc review, broadening reissue patent practice permits a scenario where, as Apple argued, the possible or eventual scope of the initial broadening need not be fully laid out in the first reissue application filed within the two-year statutory window, as long as the initial intent to broaden appears within that window. See Ex parteStaats, No. 2009-007162, 2010 WL 1725728, at *2 (BPAI Apr. 26, 2010). Tipping the scales slightly away from robust public notice, Staats (vis-à-vis Doll) essentially tells us that “any intent” to broaden within two years of patent issuance permits any broadening in a later—and properly filed—continuation or divisional reissue application. Whether this is the best remedy for a fairly persistent headache remains to be seen.
1This post represents the thoughts and opinions of the author alone and not those of Finnegan LLP. It is intended to convey general information only and should not be construed as a legal opinion or as legal advice.
Pioneer Hi-Bred International, Inc. ("Pioneer") v. Monsanto Technology LLC ("Monsanto") (Fed. Cir. 2012)
Both Pioneer and Monsanto claim to have invented the genetically modified variety of Zea Mays corn. In 1988, Pioneer filed its patent application and received U.S. Patent No. 6,258,999 in 2001 with a simple broad claim:
1. A fertile transgenic Zea mays plant comprised of stably incorporated foreign DNA, wherein said foreign DNA consists of DNA that is not from a corn plant and that is not comprised of a T-DNA border.
Monsanto filed its related GM Zea mays patent application in 2005 but asserted priority back to a 1990 filing date. The Board declared an interference in 2009 and assigned Pioneer as the senior party based upon its earlier filing date.
Both parties filed motions to the Board asking that the respective priority claims be denied. The board sided with Monsanto – finding that Monsanto's patent claim drafted in 2005 properly claimed priority to the 1990 filing document but that Pioneer's patented claim was not sufficiently disclosed in its 1988 application. That ruling made Monsanto the new senior party. On appeal, the Federal Circuit has affirmed.
Interference Claim Filing Date: On appeal, Pioneer argued that Monsanto's late-filed patent claim was time-barred by 35 U.S.C. § 135(b)(1). Under the statute, an interference can only be declared if the junior party makes a claim "prior to one year from the date on which the [senior party's] patent was granted." Here, the Federal Circuit affirmed the BPAI's ruling that Monsanto's patent claim submitted in 2005 was not time-barred even though it was filed four years after Pioneer's patent. That odd conclusion is based upon the [factual] conclusion that the 2005 was "sufficiently congruent" to patent claims filed by Monsanto before the critical date, even though no prior claim included all of the limitations found in the 2005 claim.
Burden of Proving/Disproving Priority: The second point on appeal focused on whether Pioneer's patent could properly claimed priority to its 1998 filing. Pioneer argued that the BPAI had improperly shifted the burden onto Pioneer for justifying an early priority date rather than forcing Monsanto to prove that Pioneer's patent claim was not entitled to the early filing-date priority. On appeal, the Federal Circuit agreed that Monsanto had the burden of showing why Pioneer should be deprived of its interference priority. However, the court agreed with the Board that Monsanto had met that burden by demonstrating that Pioneer's original application lacked any express reference to an embodiment in which the foreign DNA did not comprise a T-DNA border.
Deference: The case is perhaps most interesting for the clear deference that the appellate panel gives to the USPTO Board of Patent Appeals and Interferences – repeatedly focusing on whether the board committed reversible error rather than jumping to the underlying question of whether the Board made the correct decision. The Supreme Court's decision in Dickinson v. Zurko requires substantial deference be given for BPAI factual findings, although questions of law are still reviewed de novo.
Notes:
How this Relates to Marine Polymer: For this statute, the court provides a broad interpretation of the word "claim" that is not bound to the actual and literal text of the claim that is the subject of the interference. It is a parallel approach that led Judge Dyk to his conclusion in Marine Polymer that arguments made during prosecution change the scope of the claim and therefore should count as "amendments" under 35 U.S.C. 252. The issue of claim amendments under is important for reexaminations and reissue patents because those post-grant amendments (when "substantial") lead to absolute intervening rights for anyone using the invention prior to the amendments. The Federal Circuit has agreed to rehear the Marine Polymer case en banc later this year.
Factual: In the text is bracket the word "factual" because it is not clear to me whether the conclusion of sufficiently congruent claims is a factual question regarding the scope of invention or a question of law based upon claim construction.
The USPTO will be accepting application for their patent externship until February 29. Last year there were about 200 students who participated in the program. The program will last anywhere from 8-10 weeks and is at the USPTO headquarters in Alexandria, Virginia. This is a great opportunity for anyone who wants to work in the patent field. [Link]
Chisum Patent Academy
The Chisum Patent Academy will hold its next Intensive Patent Law Training Seminar in New York City on Feb. 22-24, 2012. Topics to be addressed include the America Invents Act of 2011, recent nonobviousness decisions, inequitable conduct post-Therasense, and the continuing schism in the Federal Circuit over patent claim construction. The Chisum Patent Academy offers what CLE providers and patent bar review courses simply can’t: premium-quality patent law education in a unique seminar-style setting. Co-taught by leading patent law scholars Donald Chisum and Janice Mueller, the intensive three-day seminars are limited to ten (10) participants and conducted in roundtable, interactive style. [Link]
Patent Jobs:
Stoel Rives is searching for an associate attorney with 3-5 years of experience in patent prosecution and an EE background to work at their Salt Lake City office. [Link]
Weaver Austin Villeneuve & Sampson is seeking a patent attorney with 3-5 years of experience and a background in EE to work at their Oakland office. [Link]
Schwegman, Lundberg & Woessner is looking for patent attorneys with 2+ years of experience or 5+ years of experience if telecommuting. [Link]
Holland & Knight is searching for 2 IP litigation associates with 4-6 years of experience to work at their Boston or Chicago offices. [Link]
Howard & Howard is seeking IP associates with 4-8 years of experience of patent prep experience to work at their Royal Oak, Michigan office. [Link]
Armstrong Teasdale is looking for patent attorneys with 2-6 years of experience to work in one of their offices. [Link]
Pramudji Law Group is searching for a patent agent/attorney/engineer with at least 2 years of patent experience to work at their Houston office. [Link]
Shook, Hardy & Bacon is seeking a litigation associate with 3-4 years of litigation experience work in their Kansas City office. [Link]
Paul Hastings is searching for a patent litigation associate with a computer science degree and experience with patent litigation to work in their Atlanta office. [Link]
Krieg DeVault is looking for an IP associate with 3-7 years of experience to work in their Indianapolis office. [Link]
UTC Power is searching for an IP paralegal with 2-4 years of IP experience to work at their South Windsor, Connecticut location. [Link]
Fennemore Craig is seeking an experienced patent attorney to work in their Phoenix or Denver office. [Link]
Gore Medical Products is searching for an IP technical specialist to work at their Flagstaff location. [Link]
Wells St. John PS is looking for a patent attorney with 4+ years of experience in all aspects of IP practice to work at their Spokane office. [Link]
Sutherland is seeking a patent associate/agent with 2-5 years of experience and a degree in chemical engineering to work at their Atlanta office. [Link]
Upcoming Events:
IBC Legal’s 20th Annual Biotech & Pharmaceutical Patenting Conference 2012 will be held on February 21-22 in Munich, Germany. Get advice and analysis from a diverse team of international life science and IP experts on recent case law and developments, patent filing, patent life cycles, SPCs, patent infringement, EC Bolar implementation and more! Patently-O readers get a 10% discount when registering with this link. [Link]
Fitch, Even, Tabin & Flannery LLP will present a free one-hour CLE webinar, “Patent Reexaminations in Parallel with Litigation,” on February 22, 2012 at 12 noon EST. Joseph E. Shipley will discuss the factors that should be considered in deciding whether to seek reexamination as an alternative or adjunct to litigating patent validity in the federal courts. Topics will include what can and cannot be achieved in reexamination, current statistics on outcome, associated risks and costs, time frames, and reexamination options and alternatives. The upcoming new USPTO procedures–Post-Grant Review and Inter Partes Review–will also be covered. [Link]
The 7th Annual Conference on EU Pharma Law & Regulation will be held on February 22-23 in London. The conference will bring together eminent in-house counsel from the world’s largest pharma and biotech companies, top legal practitioners and regulatory experts in an outstanding speaker panel. (Patently-O readers register with PO 10 for a discount). [Link]
Maurer School of Law Center for IP Research will hold a CLE Fundamentals of Federal Circuit Advocacy event on February 23. Greg Castanias will lead a discussion of patent appeals before the Federal Circuit. Also appearing: Center for Intellectual Property Research senior advisor Donald Knebel, Prof. Mark D. Janis, and former Federal Circuit clerk Allison Kerndt. [Link]
The Florida Bar 3rd Annual IP Law Symposium will be held on March 1-2 on Orlando. The IP Symposium will address recent developments and important issues in IP law, including: Perspectives on the America Invents Act, Copyright Law and the First Sale Doctrine, Third Party Liability in IP, Enforcing IP on the Internet, Latest Developments in Patent, Trademark, and Copyright Law, and Recent Developments at the TTAB. Guest speakers include; Anne Gilson LaLonde, Scott Bain, John Welch, and many others. [Link]
Section 101 Gatekeepers: Finding the Patentable Subject Matter Line in a Judicial Sandstorm, webinar will be hosted by AIPLA on March 7. The webinar will be presented by Professor Christopher Holman and attorney Robert H. Fischer. [Link]
LES (USA & Canada) 2012 Winter Meeting will be held March 12-14 in Anaheim, CA. The meeting will focus on cutting-edge issues in the high tech space with overlapping content in related industries, including clean tech, nanotech, and medical devices. Featured speakers include Honorable Randall Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit; Catherine Casserly, CEO, Creative Commons; and Patrick Ennis, Head of Global Technology, Intellectual Ventures. Patently-O readers save $100 with code PO1. [Link]
C5’s 22 Forum on Biotech Patenting conference will take place March 14-15 in Munich, Germany. The conferencebrings together experienced in-house counsel from both innovator and generic pharma and biotech companies and their expert legal advisors from various jurisdictions across the globe. Session will cover the patentability of gene sequence patents in Europe and the US, current developments on biotech products and patent considerations for bio-deposits, and many other sessions. (Patently-O readers register with PO 10 for a discount). [Link]
American Conference Institute’s FDA Boot Camp conference is scheduled for March 20-21 in New York, NY. ACI’s FDA Boot Camp has been designed to give products or patent litigators, as well as patent prosecutors, industry in-house counsel, and life sciences investment and securities experts, a strong working knowledge of coreFDA competencies. (Patently-O readers register with PO 200 for a discount). [Link]
American Conference Institute’s PTO Procedures Under the America Invents Act conference is scheduled for March 26-27 in New York, NY. This conference will serve as a practical and tactical guide for PTO practice post-Patent Reform. (Patently-O readers register with PO 200 for a discount). [Link]
The European Generic Medicines Association is hosting the 10th EGA International Symposium regarding Biosimilar Medicines on April 19-20 in London. Greenblum & Bernstein is providing a pre-symposium workshop on April 19, 2012 titled: Biosimilars In America: IP Strategy and Due Diligence. The workshop will explore the mechanics of the Biologics Act with an emphasis on how the Act relates to the involved intellectual property and how the intellectual property may impact the biosimilar applicant’s strategy for entering the market. [Link]
The USPTO will be accepting application for their patent externship until February 29. Last year there were about 200 students who participated in the program. The program will last anywhere from 8-10 weeks and is at the USPTO headquarters in Alexandria, Virginia. This is a great opportunity for anyone who wants to work in the patent field. [Link]
Chisum Patent Academy
The Chisum Patent Academy will hold its next Intensive Patent Law Training Seminar in New York City on Feb. 22-24, 2012. Topics to be addressed include the America Invents Act of 2011, recent nonobviousness decisions, inequitable conduct post-Therasense, and the continuing schism in the Federal Circuit over patent claim construction. The Chisum Patent Academy offers what CLE providers and patent bar review courses simply can’t: premium-quality patent law education in a unique seminar-style setting. Co-taught by leading patent law scholars Donald Chisum and Janice Mueller, the intensive three-day seminars are limited to ten (10) participants and conducted in roundtable, interactive style. [Link]
Patent Jobs:
Stoel Rives is searching for an associate attorney with 3-5 years of experience in patent prosecution and an EE background to work at their Salt Lake City office. [Link]
Weaver Austin Villeneuve & Sampson is seeking a patent attorney with 3-5 years of experience and a background in EE to work at their Oakland office. [Link]
Schwegman, Lundberg & Woessner is looking for patent attorneys with 2+ years of experience or 5+ years of experience if telecommuting. [Link]
Holland & Knight is searching for 2 IP litigation associates with 4-6 years of experience to work at their Boston or Chicago offices. [Link]
Howard & Howard is seeking IP associates with 4-8 years of experience of patent prep experience to work at their Royal Oak, Michigan office. [Link]
Armstrong Teasdale is looking for patent attorneys with 2-6 years of experience to work in one of their offices. [Link]
Pramudji Law Group is searching for a patent agent/attorney/engineer with at least 2 years of patent experience to work at their Houston office. [Link]
Shook, Hardy & Bacon is seeking a litigation associate with 3-4 years of litigation experience work in their Kansas City office. [Link]
Paul Hastings is searching for a patent litigation associate with a computer science degree and experience with patent litigation to work in their Atlanta office. [Link]
Krieg DeVault is looking for an IP associate with 3-7 years of experience to work in their Indianapolis office. [Link]
UTC Power is searching for an IP paralegal with 2-4 years of IP experience to work at their South Windsor, Connecticut location. [Link]
Fennemore Craig is seeking an experienced patent attorney to work in their Phoenix or Denver office. [Link]
Gore Medical Products is searching for an IP technical specialist to work at their Flagstaff location. [Link]
Wells St. John PS is looking for a patent attorney with 4+ years of experience in all aspects of IP practice to work at their Spokane office. [Link]
Sutherland is seeking a patent associate/agent with 2-5 years of experience and a degree in chemical engineering to work at their Atlanta office. [Link]
Upcoming Events:
IBC Legal’s 20th Annual Biotech & Pharmaceutical Patenting Conference 2012 will be held on February 21-22 in Munich, Germany. Get advice and analysis from a diverse team of international life science and IP experts on recent case law and developments, patent filing, patent life cycles, SPCs, patent infringement, EC Bolar implementation and more! Patently-O readers get a 10% discount when registering with this link. [Link]
Fitch, Even, Tabin & Flannery LLP will present a free one-hour CLE webinar, “Patent Reexaminations in Parallel with Litigation,” on February 22, 2012 at 12 noon EST. Joseph E. Shipley will discuss the factors that should be considered in deciding whether to seek reexamination as an alternative or adjunct to litigating patent validity in the federal courts. Topics will include what can and cannot be achieved in reexamination, current statistics on outcome, associated risks and costs, time frames, and reexamination options and alternatives. The upcoming new USPTO procedures–Post-Grant Review and Inter Partes Review–will also be covered. [Link]
The 7th Annual Conference on EU Pharma Law & Regulation will be held on February 22-23 in London. The conference will bring together eminent in-house counsel from the world’s largest pharma and biotech companies, top legal practitioners and regulatory experts in an outstanding speaker panel. (Patently-O readers register with PO 10 for a discount). [Link]
Maurer School of Law Center for IP Research will hold a CLE Fundamentals of Federal Circuit Advocacy event on February 23. Greg Castanias will lead a discussion of patent appeals before the Federal Circuit. Also appearing: Center for Intellectual Property Research senior advisor Donald Knebel, Prof. Mark D. Janis, and former Federal Circuit clerk Allison Kerndt. [Link]
The Florida Bar 3rd Annual IP Law Symposium will be held on March 1-2 on Orlando. The IP Symposium will address recent developments and important issues in IP law, including: Perspectives on the America Invents Act, Copyright Law and the First Sale Doctrine, Third Party Liability in IP, Enforcing IP on the Internet, Latest Developments in Patent, Trademark, and Copyright Law, and Recent Developments at the TTAB. Guest speakers include; Anne Gilson LaLonde, Scott Bain, John Welch, and many others. [Link]
Section 101 Gatekeepers: Finding the Patentable Subject Matter Line in a Judicial Sandstorm, webinar will be hosted by AIPLA on March 7. The webinar will be presented by Professor Christopher Holman and attorney Robert H. Fischer. [Link]
LES (USA & Canada) 2012 Winter Meeting will be held March 12-14 in Anaheim, CA. The meeting will focus on cutting-edge issues in the high tech space with overlapping content in related industries, including clean tech, nanotech, and medical devices. Featured speakers include Honorable Randall Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit; Catherine Casserly, CEO, Creative Commons; and Patrick Ennis, Head of Global Technology, Intellectual Ventures. Patently-O readers save $100 with code PO1. [Link]
C5’s 22 Forum on Biotech Patenting conference will take place March 14-15 in Munich, Germany. The conferencebrings together experienced in-house counsel from both innovator and generic pharma and biotech companies and their expert legal advisors from various jurisdictions across the globe. Session will cover the patentability of gene sequence patents in Europe and the US, current developments on biotech products and patent considerations for bio-deposits, and many other sessions. (Patently-O readers register with PO 10 for a discount). [Link]
American Conference Institute’s FDA Boot Camp conference is scheduled for March 20-21 in New York, NY. ACI’s FDA Boot Camp has been designed to give products or patent litigators, as well as patent prosecutors, industry in-house counsel, and life sciences investment and securities experts, a strong working knowledge of coreFDA competencies. (Patently-O readers register with PO 200 for a discount). [Link]
American Conference Institute’s PTO Procedures Under the America Invents Act conference is scheduled for March 26-27 in New York, NY. This conference will serve as a practical and tactical guide for PTO practice post-Patent Reform. (Patently-O readers register with PO 200 for a discount). [Link]
The European Generic Medicines Association is hosting the 10th EGA International Symposium regarding Biosimilar Medicines on April 19-20 in London. Greenblum & Bernstein is providing a pre-symposium workshop on April 19, 2012 titled: Biosimilars In America: IP Strategy and Due Diligence. The workshop will explore the mechanics of the Biologics Act with an emphasis on how the Act relates to the involved intellectual property and how the intellectual property may impact the biosimilar applicant’s strategy for entering the market. [Link]
Proposed Filing Fee for Petition for Post-Grant Opposition or Covered Business Method Patent Review: $35,800 to review up to 20 claims, $44,750 to request review of 21 to 30 claims, $53,700 to request review of 31 to 40 claims, $71,600 to request review of 41 to 50 claims, $89,500 to request review of 51 to 60 claims, and an additional $35,800 to request review of additional groups of 10 claims.
Proposed Filing Fee for a Petition for Inter Partes Review: $27,200 to review up to 20 claims, $34,000 to request review of 21 to 30 claims, $40,800 to request review of 31 to 40 claims, $54,400 to request review of 41 to 50 claims, $68,000 to request review of 51 to 60 claims, and an additional $27,200 to request review of additional groups of 10 claims.
Proposed Filing Fee for a Petition for Ex Parte Reexamination: $17,760.
Proposed Fees for Supplemental Examination: Filing Fee of $7,000; Examination Fee of $20,000.
Petition for Derivation: $400.
Third Party Submission of Prior Art in Pending Cases: $0 for up to three references with notation; $180 for up to ten.
Guest Post by Jon E. Wright and Joseph E. Mutschelknaus of Sterne Kessler Goldstein & Fox, PLLC1
On September 16, 2011, the America Invents Act (“AIA”) changed the threshold standard for initiating inter partes reexamination. The new standard requires a requester to demonstrate that:
[T]he information presented in the request shows that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request.
America Invents Act – Sec. 6(c)(3)(A)(i)-(ii). We refer to the new standard as the “RLP” standard. The RLP standard is significant because it matches the future standard for initiating inter partes review under the AIA.
This post addresses the new RLP standard. First, we review case law surrounding the “reasonable likelihood” standard as it exists in other contexts such as preliminary injunctions. Next, based on our analysis of every single post-AIA inter partes reexamination the PTO has acted upon, we analyze how the Office has been applying the new RLP standard in reexamination orders. Finally, we consider how inter partes reexamination requests (and future petitions for inter partes review) should be structured for the best chance at meeting the RLP threshold.
The “Reasonable Likelihood” Standard
Patent practitioners are familiar with the “reasonable likelihood” standard in the context of preliminary injunctions. For a court to grant a preliminary injunction, a patentee must demonstrate four factors, one of which is a “reasonable likelihood of success on the merits.” Ranbaxy Pharm., Inc. v. Apotex, Inc., 350 F.3d 1235,1239 (Fed. Cir. 2003). This standard may be instructive in learning how the Office will deal with the new RLP standard for current inter partes reexamination requests and inter partes review petitions later this year.
According to the Federal Circuit, the reasonable likelihood of success standard for preliminary injunctions must be made “in light of the presumptions and burdens that will inhere at trial on the merits….” Id. In the context of inter partes patentability proceedings at the Office, claims do not enjoy the presumption of validity that they do before a district court. Rather, the standard of proof before the Office is the “preponderance of evidence” standard. MPEP § 706.I. The same is true for the new inter partes review proceedings. See AIA § 316(e). Therefore, Requesters (or Petitioners) must demonstrate a “reasonable likelihood” that they can invalidate at least one claim of the patent for which reexamination is sought under the preponderance of the evidence standard.
But what does this really mean? In the context of preliminary injunction proceedings, the Federal Circuit has stressed that “[a]t this preliminary stage, the trial court does not resolve the validity question….” New England Braiding Co., Inc. v. A.W. Chesterton Co., 970 F.2d 878, 882-83 (Fed. Cir. 1992). Rather, the decision maker “must … make an assessment of the persuasiveness of the challenger’s evidence, recognizing that it is doing so without all evidence that may come out at trial.” Id. This is just as true in inter partes reexamination (or review) because both parties to the proceeding are permitted to submit additional evidence in support of their positions, at least during the first round of replies and comments.
Moreover, in addition to recognizing that it may not have all the facts, the decision maker must also assess the persuasiveness of the evidence. This may include making credibility determinations. As the Federal Circuit stated in New England Braiding, “[a] credibility determination is well within the court’s province when ruling on a preliminary injunction motion.” Id.
If the preliminary injunction standard for determining a reasonable likelihood of success on the merits is any guide, we can thus surmise the following with respect to requests for inter partes reexamination (or future petitions for inter partes review):
The request or petition must be based on “evidence,” which at the initial stage will likely be limited to prior art patents or printed publications;
The request or petition must reviewed by the Office under the “preponderance of evidence” standard, with the burden placed on the requester or petitioner;
The request or petition need not conclusively demonstrate unpatentability;
The Examiner (or Board) may properly make credibility determinations; and
The Examiner (or Board) must make an assessment of the persuasiveness of the evidence and accompanying argument set forth by the requester or petitioner, recognizing that it does not have all the evidence.
As shown next, the Office appears to be adhering to these standards.
The Office’s Application of the RLP Standard
As of the date of this post, the Office has acted on forty-two (42) requests for inter partes reexamination that were filed on or after September 16, 2011. The authors analyzed each one to determine how the Office is implementing the new RLP standard. Anecdotal evidence suggests that the Central Reexamination Unit is still struggling with the new standard. But nonetheless, several observations can be made from these orders.
First, despite the change, early data suggests that the Office continues to be granting reexaminations at about the same rate under the new RLP standard as it was under the old “substantial new question” or “SNQ” standard. In fiscal year 2011, for example, the Office granted 342 inter partes reexamination requests out of 366 total decisions. That accounts for a 93% grant rate under the old SNQ standard. Of the 42 orders issued under the new RLP standard, 38 have been granted (at least in part), putting the current grant rate under the RLP standard at about 90%. Thus, while the sample set is still limited, the Office appears to be granting reexamination requests at about the same rate under the RLP standard as it had been under the SNQ standard. This runs contrary to the general belief among practitioners that the RLP standard would be stricter than the SNQ standard.
Second, in finding an RLP, the Office appears to be focusing on the persuasiveness of the requester’s evidence on the merits. The Office is also correctly placing the burden of establishing the reasonable likelihood prevail on the requester. In cases where RLPs are denied, the Office frequently uses language like, “Requester has failed to show the claim step is taught by the reference.” (See, e.g., 95/001,809, p. 6.) At the same time, the Office is not shying away from addressing the underlying legal issues presented in the request, such as claim construction. For example, in several cases, the Office explicitly construed claim terms, and then made a finding that the cited references do not teach claims under that construction. (See, e.g., 95/001,785, 95/001,792.) Thus, in establishing whether there is an RLP, the Office is considering the merits of the cited prior art against the claims on both factual and legal bases.
Third, while the importance of the art’s strength against the claims may have increased with the RLP standard, the importance of the art’s “newness” may have decreased. Under the SNQ standard, the Office would almost always take into account the prosecution history and discuss whether the cited prior art was presented a new light. In contrast, of the forty-two (42) orders issued under the RLP standard, only three (3) make any discussion of the prosecution history or cumulativeness of the art. And in no case did this appear to be dispositive. This is consistent with the AIA, which made the newness requirement effectively discretionary on the Office. See AIA codified at 35 U.S.C. § 325 (“In determining whether to … order a proceeding under [the inter partes reexamination/review chapter], the Director may take into account whether, and reject the … request because, the same or substantially the same prior art or arguments were previously were presented to the Office.”) (emphasis added). In sum, the weight given to the art’s newness appears to be waning.
Practice Tips
Given the above observations, drafting a strong, persuasive request supported by quality prior art references remains paramount under the new RLP standard, just as it was under the old SNQ standard. But in view of the Office’s tendency to now focus more intently on the merits of the individual rejections under the new standard, requesters may want to provide and justify claim constructions in their initial requests. Also, requesters may want to consider including expert declarations with their request, especially if the art upon which the reexamination is based is complicated and would benefit from expert clarification or explanation. Keep in mind, though, that reexaminations must still be based on patents and prior-art publications, not expert declarations.
At the same time, requesters may need less discussion in their requests of how their art is noncumulative or new with respect to what the Office has already considered. This could result in structural change to reexamination requests. For example, prior inter partes reexamination requests usually included two separate questions, one developing and showing the SNQ and a second section with the proposed rejections—i.e., the manner and pertinency of applying the prior-art references. Now, with the increased focus on the substantive merits of the proposed rejections and the decreased focus on newness or cumulativeness of the art, the second section becomes the most important section. Indeed, a fully developed set of proposed rejections would seem to be sufficient in proving up the RLP standard.
In sum, the authors believe it was a good idea for Congress to immediately implement the RPL standard for inter partes reexaminations. It gives patent practitioners a taste of what is to come for inter partes review under the AIA, and the ability to prepare for that change. It also appears as if the Office is adopting evaluation standards similar to those used the context of preliminary injunctions. We hope this post provide some new insight into the RLP standard—a standard with which we will have to live for the foreseeable future.
1Jon Wright is a Director and Joe Mutschelknaus is an Associate at Sterne Kessler Goldstein & Fox, PLLC www.skgf.com. The views expressed herein are the authors’ alone and should not be attributed to the firm or its clients.
Edited on 2/2/2012 to reflect that it was Congress's decision to immediately implement the RPL standard.
Yesterday, the United States Patent and Trademark Office announced the proposed rules for supplemental examinations and proposed revisions to ex parte reexamination fees. These proposals detail the supplemental examination process, including the information that requesters must submit, as well as the substantial fees that will be associated with post-grant review in the future. The PTO will accept comments on the proposed rules until March 26, 2012.
The request must be filed by the patent owner. Only the patent owner will be permitted to participate in the supplemental examination or any reexamination ordered as a result. (§ 1.601)
Each supplemental examination request may identify up to ten items of information to be considered, reconsidered, or corrected. Multiple supplemental examination requests may be filed at one time. (§ 1.605)
The cost for filing a supplemental examination request is steep: $5,180 for the initial request plus $16,120 for the ex parte re-examination fee. (§ 1.20(k)) Both must be paid at the time of initial request, and the $16,120 will be refunded if no re-examination is ordered in the supplemental examination certificate. (§ 1.26(c)) In addition, there are substantial fees associated with documents over 20 pages, as well as with petitions filed in connection with the proceeding.
The supplemental examination request must include ((§ 1.610(b)):
a cover sheet;
an identification of the patent for which supplemental examination is requested;
a list of each item of information and its publication date, if applicable;
a list identifying any other prior or concurrent post patent Office proceedings involving the patent to be examined;
an identification of each aspect of the patent to be examined;
an identification of each issue raised by each item of information;
a separate, detailed explanation for each identified issue;
an explanation of how each item of information is relevant to each aspect of the patent to be examined and of how each item of information raises each identified informaiton;
a copy of each item of information; and
summary of the relevant portions of any submitted document, other than the request, that is over 50 pages in length.
The full requirement for item 8 is:
(8) A separate, detailed explanation for each identified issue, discussing how each item of information is relevant to each aspect of the patent identified for examination, and how each item of information raises each issue identified for examination, including:
(i) Where an identified issue involves the application of 35 U.S.C. 101 (other than double patenting) or 35 U.S.C. 112, an explanation discussing the support in the specification for each limitation of each claim identified for examination with respect to this issue; and
(ii) Where an identified issue involves the application of 35 U.S.C. 102, 35 U.S.C. 103, or double patenting, an explanation of how each limitation of each claim identified for examination with respect to this issue is met, or is not met, by each item of information. The detailed explanation may also include an explanation of how the claims distinguish over the items of information.
(Proposed § 1.610(b)(8)). Note that if the PTO concludes that an examination request is not in compliance with the content requirements, it will not be entitled to the original filing date. Rather, the filing date will be the date the corrected request is received. (§ 1.610(d),(e)) This appears to mean that the PTO's three-month deadline for issuing a supplemental examination certificate will not begin until the corrected request is received and the safe-harbor provisions of 35 U.S.C. 257 may not be triggered even if a request is filed should the PTO conclude that requirement 8, for example, is not met.
The proposed cost to file an ex parte reexamination will increase from the current $2,520 to $17,750. Given both this increase and the substantial cost to file a supplemental examination request, I'm skeptical of the PTO's prediction that it will receive about 800 ex parte examination requests and 1,430 supplemental examination requests annually. The latter number, especially, seems to be based on some highly dubious assumptions.
Microsoft and LG singed a patent agreement that provides coverage under Microsoft's patent portfolio for LG's tablets, mobile phones and other products that runs on the Android Platform. Microsoft claims that more than 70% of all Android smartphones sold in the US are now receiving coverage under Microsoft's patent portfolio. It has been estimated that more than 700,000 Android based devices are sold every day and analyst have predicted that the number will reach 2.5 million devices per day. [Link] Microsoft most likely receives anywhere from $5-$15 dollars per device sold, meaning Microsoft makes $2.45 million-$7.35 million every day from Android operated phones. [Link]
Wal-Mart and Entrepreneurs
Wal-Mart has launched a "Get on the Shelf" contest to find the next new thing to put on their shelves. The contest is limited to categories that Wal-Mart carries, which makes the contest open to all kind of entrepreneurs. There will be 3 winners picked and their items will be sold on Walmart.com, with the grand prize winner being featured on the site's home page and stocked n select Wal-Mart stores. The public will vote for their favorite products, similar to other contest such as American Idol. [Link]
National Medal of Technology and Innovation
The PTO is seeking nominations for the 2012 National Medal of Technology and Innovation. The medal is presented by the President and is the highest award for technological achievement in the US. The medal is awarded to individuals, teams of up to 4, or companies for their contribution to America's economic, environmental, and social well-being. [Link]
Patent Jobs:
Cardinal Intellectual Property is seeking a patent search attorney to work at their Evanston, Illinois location. [Link]
Roberts Mlotkowski Safran & Cole is looking for a patent attorney with 2-4 years of experience and a degree in EE to work at their McLean, Virginia office. [Link]
Cardinal Intellectual Property is searching for patent search professional to work remotely. [Link]
DIRECTV is seeking a senior patent analysis counsel with 6+ years of experience to work at their El Segundo, California location. [Link]
Dority & Manning is seeking patent attorneys with 1-4 years of experience and a BSEE or BSME to work at their Greenville, SC office. [Link]
The Sughrue Firm is searching for patent agents with 1-2 years of experience and backgrounds in computer science of software to work in their Silicon Valley office. [Link]
Whirlpool is seeking a patent agent with a minimum of 2 years of experience and a BS in engineering to work at their Saint Joseph, Michigan location. [Link]
Hiscock & Barclay is seeking patent agents/attorneys with a minimum of 3-5 years of experience to work at their New York offices. [Link]
Steptoe & Johnson is searching for IP associates with a minimum of 4 years of experience in patent litigation and a technical background to work in their DC or Chicago offices. [Link]
Edell, Shapiro & Finnan is looking for a patent attorney with 2+ years of experience and a degree in EE or physics to work at their Rockville, Maryland office. [Link]
Michael Best & Friedrich is seeking a biotech associate with 5+ years of experience and a Ph.D. to work at their Madison, Milwaukee or Chicago office. [Link]
Intellectual Ventures and Invention Law Group is looking for a Chief Policy Counsel with 15+ years of experience to work at their Bellevue, Washington location. [Link]
Telesign is seeking a IP analyst with 2+ years of experience to work at their Marina Del Rey, California location. [Link]
Upcoming Events:
The American Bar Association Section of Intellectual Property Law, Young Lawyers Division, ABA-IPL Young Lawyers Action Group and the ABA Center for Continuing Legal Education will sponsor a webinar on January 20 at 1 p.m. Eastern time. The webinar, Prosecution Strategies: Tackling USPTO Obviousness Rejections will explore how the KSR standards have been applied in various technology areas and provide guidance for effective avenues of argument based on the technology area. Speakers include: Janet Hendrickson, Gregory Hillyer, Michelle O'Brien, and Zachary Stern. [Link]
American University Washington College of Law Administrative Law Reviewwill be hosting an afternoon symposium on January 25 on the creation and administration of a new trial-like review procedure, more commonly known as post-grant patent opposition, at the U.S. Patent and Trademark Office, titled Regulating Innovation: How the Patent and Trademark Office Intends to Create Adjudication From Scratch. The symposium will explore the rulemaking that will be required of the agency, the implementation of the post-grant review process, and industry reaction to the proposed changes.
International IP- Is the IP World Flat? Santa Clara Computer & High Tech Law Journal is hosting its annual symposium January 27 on SCU Campus. The symposium will include the following 4 panels: (1) International Patent Harmonization; (2) Non Practicing Entities: Going Global; (3) The Rise of Chinese IP; and (4) Comparative e-Privacy Regimes. Speakers include: David Abrams, Colleen Chien, Nancy Kremers, Francois Gilbert and many others. Also, PatentlyO's Dennis Crouch will be a Speaker discussing International Patent Harmonization. [Link]
The American Conference Institute (ACI) The Comprehensive Guide to Patent Reform For Life Science Companies, conference is scheduled for January 31- February 1 in New York. (Patently-O readers register with PO 200 for a discount). [Link]
AIPLA webinar, Selecting the Right Expert to Put on (or Poke Holes in) a Patentee's Case, will be held on February 1. The webinar will focus on the process of selecting a damage expert, recent cases that may influence the decision and some of the ways that a damage expert can assist with evaluating poking holes in the opposing expert's analysis. The webinar will be presented by Gillian Thackray and Philip Green. [Link]
The DC Bar's IP Section will host an event, Section 337 IP Investigations at the ITC: Lessons for District Court Practitioners, on February 2. The event will discuss what practitioners need to know before appearing at the ITC. Speakers include ITC Commissioner Shara Aranoff, ITC Judges Theodore Essex and Robert Rogers, Jr., Attorney Advisor to Commissioner Michael Diehl, Christine Lehman, Marcia Sundeen, Maureen Browne, and Jaime Underwood. [Link]
The Intellectual Property Law Section of the Utah State Bar is hosting its annual IP Summit in Salt Lake City, Utah, on February 17, 2012, at the Little America Hotel. This full day event includes two tracks of topics in various areas of IP law, lunch, and a networking reception. Confirmed speakers include Ted McAleer, Executive Director of USTAR; Robin Zhao, Jeekai & Partners; Hon. Dee V Benson, US Dist. Ct for the Dist. of Utah; Hon. Ted Stewart, US Dist. Ct for the Dist. of Utah; Hon. Virginia Kendall, US Dist. Ct for Northern Dist. of Illinois; Paul Marchegiani, NBC; Howard Michael, Brinks Hofer Gilson & Lione; Jeff Gee, Symantec; and Richard Chang, ICON. [Link]
The 7th Annual Conference on EU Pharma Law & Regulation will be held on February 22-23 on London. The conference will bring together eminent in-house counsel from the world's largest pharma and biotech companies, top legal practitioners and regulatory experts in an outstanding speaker panel. (Patently-O readers register with PO 10 for a discount). [Link]
LES (USA & Canada) 2012 Winter Meeting will be held March 12-14 in Anaheim, CA. The meeting will focus on cutting-edge issues in the high tech space with overlapping content in related industries, including clean tech, nanotech, and medical devices. Featured speakers include Honorable Randall Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit; Catherine Casserly, CEO, Creative Commons; and Patrick Ennis, Head of Global Technology, Intellectual Ventures. Save $100 before January 31. [Link]
Microsoft and LG singed a patent agreement that provides coverage under Microsoft's patent portfolio for LG's tablets, mobile phones and other products that runs on the Android Platform. Microsoft claims that more than 70% of all Android smartphones sold in the US are now receiving coverage under Microsoft's patent portfolio. It has been estimated that more than 700,000 Android based devices are sold every day and analyst have predicted that the number will reach 2.5 million devices per day. [Link] Microsoft most likely receives anywhere from $5-$15 dollars per device sold, meaning Microsoft makes $2.45 million-$7.35 million every day from Android operated phones. [Link]
Wal-Mart and Entrepreneurs
Wal-Mart has launched a "Get on the Shelf" contest to find the next new thing to put on their shelves. The contest is limited to categories that Wal-Mart carries, which makes the contest open to all kind of entrepreneurs. There will be 3 winners picked and their items will be sold on Walmart.com, with the grand prize winner being featured on the site's home page and stocked n select Wal-Mart stores. The public will vote for their favorite products, similar to other contest such as American Idol. [Link]
National Medal of Technology and Innovation
The PTO is seeking nominations for the 2012 National Medal of Technology and Innovation. The medal is presented by the President and is the highest award for technological achievement in the US. The medal is awarded to individuals, teams of up to 4, or companies for their contribution to America's economic, environmental, and social well-being. [Link]
Patent Jobs:
Cardinal Intellectual Property is seeking a patent search attorney to work at their Evanston, Illinois location. [Link]
Roberts Mlotkowski Safran & Cole is looking for a patent attorney with 2-4 years of experience and a degree in EE to work at their McLean, Virginia office. [Link]
Cardinal Intellectual Property is searching for patent search professional to work remotely. [Link]
DIRECTV is seeking a senior patent analysis counsel with 6+ years of experience to work at their El Segundo, California location. [Link]
Dority & Manning is seeking patent attorneys with 1-4 years of experience and a BSEE or BSME to work at their Greenville, SC office. [Link]
The Sughrue Firm is searching for patent agents with 1-2 years of experience and backgrounds in computer science of software to work in their Silicon Valley office. [Link]
Whirlpool is seeking a patent agent with a minimum of 2 years of experience and a BS in engineering to work at their Saint Joseph, Michigan location. [Link]
Hiscock & Barclay is seeking patent agents/attorneys with a minimum of 3-5 years of experience to work at their New York offices. [Link]
Steptoe & Johnson is searching for IP associates with a minimum of 4 years of experience in patent litigation and a technical background to work in their DC or Chicago offices. [Link]
Edell, Shapiro & Finnan is looking for a patent attorney with 2+ years of experience and a degree in EE or physics to work at their Rockville, Maryland office. [Link]
Michael Best & Friedrich is seeking a biotech associate with 5+ years of experience and a Ph.D. to work at their Madison, Milwaukee or Chicago office. [Link]
Intellectual Ventures and Invention Law Group is looking for a Chief Policy Counsel with 15+ years of experience to work at their Bellevue, Washington location. [Link]
Telesign is seeking a IP analyst with 2+ years of experience to work at their Marina Del Rey, California location. [Link]
Upcoming Events:
The American Bar Association Section of Intellectual Property Law, Young Lawyers Division, ABA-IPL Young Lawyers Action Group and the ABA Center for Continuing Legal Education will sponsor a webinar on January 20 at 1 p.m. Eastern time. The webinar, Prosecution Strategies: Tackling USPTO Obviousness Rejections will explore how the KSR standards have been applied in various technology areas and provide guidance for effective avenues of argument based on the technology area. Speakers include: Janet Hendrickson, Gregory Hillyer, Michelle O'Brien, and Zachary Stern. [Link]
American University Washington College of Law Administrative Law Reviewwill be hosting an afternoon symposium on January 25 on the creation and administration of a new trial-like review procedure, more commonly known as post-grant patent opposition, at the U.S. Patent and Trademark Office, titled Regulating Innovation: How the Patent and Trademark Office Intends to Create Adjudication From Scratch. The symposium will explore the rulemaking that will be required of the agency, the implementation of the post-grant review process, and industry reaction to the proposed changes.
International IP- Is the IP World Flat? Santa Clara Computer & High Tech Law Journal is hosting its annual symposium January 27 on SCU Campus. The symposium will include the following 4 panels: (1) International Patent Harmonization; (2) Non Practicing Entities: Going Global; (3) The Rise of Chinese IP; and (4) Comparative e-Privacy Regimes. Speakers include: David Abrams, Colleen Chien, Nancy Kremers, Francois Gilbert and many others. Also, PatentlyO's Dennis Crouch will be a Speaker discussing International Patent Harmonization. [Link]
The American Conference Institute (ACI) The Comprehensive Guide to Patent Reform For Life Science Companies, conference is scheduled for January 31- February 1 in New York. (Patently-O readers register with PO 200 for a discount). [Link]
AIPLA webinar, Selecting the Right Expert to Put on (or Poke Holes in) a Patentee's Case, will be held on February 1. The webinar will focus on the process of selecting a damage expert, recent cases that may influence the decision and some of the ways that a damage expert can assist with evaluating poking holes in the opposing expert's analysis. The webinar will be presented by Gillian Thackray and Philip Green. [Link]
The DC Bar's IP Section will host an event, Section 337 IP Investigations at the ITC: Lessons for District Court Practitioners, on February 2. The event will discuss what practitioners need to know before appearing at the ITC. Speakers include ITC Commissioner Shara Aranoff, ITC Judges Theodore Essex and Robert Rogers, Jr., Attorney Advisor to Commissioner Michael Diehl, Christine Lehman, Marcia Sundeen, Maureen Browne, and Jaime Underwood. [Link]
The Intellectual Property Law Section of the Utah State Bar is hosting its annual IP Summit in Salt Lake City, Utah, on February 17, 2012, at the Little America Hotel. This full day event includes two tracks of topics in various areas of IP law, lunch, and a networking reception. Confirmed speakers include Ted McAleer, Executive Director of USTAR; Robin Zhao, Jeekai & Partners; Hon. Dee V Benson, US Dist. Ct for the Dist. of Utah; Hon. Ted Stewart, US Dist. Ct for the Dist. of Utah; Hon. Virginia Kendall, US Dist. Ct for Northern Dist. of Illinois; Paul Marchegiani, NBC; Howard Michael, Brinks Hofer Gilson & Lione; Jeff Gee, Symantec; and Richard Chang, ICON. [Link]
The 7th Annual Conference on EU Pharma Law & Regulation will be held on February 22-23 on London. The conference will bring together eminent in-house counsel from the world's largest pharma and biotech companies, top legal practitioners and regulatory experts in an outstanding speaker panel. (Patently-O readers register with PO 10 for a discount). [Link]
LES (USA & Canada) 2012 Winter Meeting will be held March 12-14 in Anaheim, CA. The meeting will focus on cutting-edge issues in the high tech space with overlapping content in related industries, including clean tech, nanotech, and medical devices. Featured speakers include Honorable Randall Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit; Catherine Casserly, CEO, Creative Commons; and Patrick Ennis, Head of Global Technology, Intellectual Ventures. Save $100 before January 31. [Link]
On January 5 the PTO proposed a new 37 CFR §1.290 in the Federal Register for third party pre-issuance submissions of prior art in patent applications of others. The new rule is needed to implement the new statutory provision – 35 U.S.C. §122(e) – found in Section 8 of the AIA [Leahy Smith America Invents Act]. 35 U.S.C. §122(e) will be effective as of September 16, 2012, and will be usable against any pending applications [including reissues but not reexaminations] filed before or after that date. It will permit anyone to submit patents, published patent applications, or other printed publications, to the USPTO for consideration and inclusion in the record of a patent application as long as the submission includes a "concise statement of relevance" and meets some other paperwork requirements, which need not be discussed here since they will be clearly spelled out in the final PTO rules. As discussed below, §122(e) includes a significant expansion of the time period for submitting prior art documents to be put into someone else's pending application. The statute also expands what you can say about the documents (accompanying explanations and arguments) well beyond the present limitations found in 37 CFR §1.99. The submission process will remain cheap and simple, but it will still present the same conundrums as to whether or not you should use it?
In the same Federal Register is the proposed PTO rulemaking for amending 37 CFR §1.501 to accommodate the amendment of 35 U.S.C. §301. This amendment will slightly expand what information anyone can submit to the USPTO for inclusion in an already issued patent file when accompanied by a written explanation regarding the "pertinency and manner of applying" the information to at least one patent claim. That expand [new] information which can be put into an issued patent file will include written statements made by the patent owner before a Federal court or the Office regarding the scope of any claim of the patent. But the Office's use of such written statements will be limited to determining the meaning of a patent claim in reexamination proceedings and post grant review proceedings. This provision is also effective on September 16, 2012.
The Present Situation [PRE AIA]
First keep in mind that the PTO considers it to be actionable unethical conduct to put any papers into anyone else's ex parte [normal] patent application file unless there is an express statutory basis for doing so. Furthermore, papers attempted to be filed in a reexamination in which you are not a party [other than just the initial request papers for an ex parte reexamination], will not be entered. Adverse prior art submissions for anything in the PTO are quite restricted.
37 CFR §1.291 "Protests by the public against pending applications" and 37 CFR §1.292 "Public use proceedings" have existed for many years, but have been rarely used, and I suspect that few PTO practitioners or PTO personnel have ever seen one. Some senior PTO officials I asked at a CLE meeting several years ago doubted if there had been more than a handful per year. The rare Rule 292 proceedings are mostly used in connection with a parallel interference. Rule 291's potential usage was significantly restricted when the statute providing for U.S. 18 month application publications went into effect, ending Rule 291 "protest" filing opportunities after an application publication date.
The PTO at that time also put severe rule constraints that were not statutorily required into a 37 CFR §1.99 limiting what could be submitted and when. Rule 99 has a short time limit of only two months following the application publication date. Rule 99 also expressly states at (d) that a "submission under this section shall not include any explanation of the patents or publications, or any other information. The Office will not enter such explanation or information if included in a submission under this section." There is also a limit of 10 submitted documents. The PTO even threatened to reject submitted prior art patent copies if they were merely marked or high-lined to show the examiner where the relevant teaching or disclosure was buried in the patent! It seemed obvious to me at that time that the PTO did not really want to be bothered with any extra examiner work from third party prior art submissions. [The AIA has now at least made it clear that that is not quite what Congress has in mind.] An English language translation must be provided for all relevant portions of any listed non-English language document to be considered by the examiner, and that requirement will continue under the proposed new rules. Some patent attorneys reportedly consider it preferable to just send prior art to an applicant's patent attorney by registered mail and rely on the inequitable conduct concerns of that patent attorney to get that patent attorney to file the prior art the application, or to set up an IC defense if they do not.
35 U.S.C. §301 above [with its original 37 CFR §1.501] was enacted years ago accompanying the first [ex parte] reexamination system. It is simply to allow people to place prior art in an issued patent file without having to initiate a reexamination, so that the art might hopefully be considered if anyone subsequently requested a reexamination. It is understood that §301 has rarely been used, and I am not aware of any PTO statistics to the contrary, even though §301 says that it can be done anonymously. My very limited experience was that the PTO clerical staff did not know what to do with the [rare] §301 submittal and it was not placed in the patent file until we made follow-up efforts. [A copy of the PTO submittal mailed to the patent owner was helpful for a licensing discussion, but I wouldn't count on that happening often.]
What's New?
New 35 U.S.C.122(e)(1) and its proposed new rule 37 CFR §1.290 will greatly expand when you can legally put prior art into someone else's pending application file. As shown below, that is awkwardly expressed as "before the earlier of .. or the later of" three events in an application. But clearly it will normally be available for a much longer time period than the mere 2 months after a patent application is published of present Rule 99. It may be submittable for several years for applications not yet having a first office action with a claim rejection, as long as there is as yet no notice of allowance. Nor can the present unreasonable Rule 99 prevention of any explanations or comments on the submitted art remain, since "a concise description of the asserted relevance of each submitted document" is specifically required by this new statute:
(e) Preissuance Submissions by Third Parties-
(1) IN GENERAL- Any third party may submit for consideration and inclusion in the record of a patent application, any patent, published patent application, or other printed publication of potential relevance to the examination of the application, if such submission is made in writing before the earlier of–
(A) the date a notice of allowance under section 151 is given or mailed in the application for patent; or
(B) the later of–
(i) 6 months after the date on which the application for patent is first published under section 122 by the Office, or
(ii) the date of the first rejection under section 132 of any claim by the examiner during the examination of the application for patent.
(2) OTHER REQUIREMENTS- Any submission under paragraph (1) shall–
(A) set forth a concise description of the asserted relevance of each submitted document;
(B) be accompanied by such fee as the Director may prescribe; and
(C) include a statement by the person making such submission affirming that the submission was made in compliance with this section.
As noted, the proposed amended 37 CFR §1.501 for the AIA amendment of 35 U.S.C. §301 will just slightly add totheinformation can be submitted to the PTO to merely put into an issued patent file. That information can now comprise or include written statements made by the patent owner before a Federal court or the Office regarding the scope of any claim of the patent, and that information can supposedly be used in subsequent actual reexaminations. However, even if that made sense tactically or strategically in some situation, perhaps in anticipation of a potential ex parte reexamination initiated by the patent owner itself, I fail to see how that kind of material can affect that many reexaminations? The Fed. Cir. requirement that claim scope in a reexamination apply a "broadest reasonable interpretation" test is not the same as claim interpretation in patent litigation.
But Do You Really Want To Do It & How Likely Is the Overall Usage?
How likely is it that this somewhat increased opportunity to cite prior art in applications or patent files of others will be used? That depends largely on whether you think doing so is really a good idea or not. That obviously includes guessing how likely is a regular examiner in normal ex parte patent examination [not a reexamination] going to consider and apply that prior art to reject claims? A prior statistical study published by Prof. Crouch on his Patently-O blog of a low examiner usage rate of prior art cited by the applicants themselves is not encouraging. But perhaps a novel third party submission is more likely to get an examiner's attention and claim rejections than routine applicant IDS dumps?
Even if that effectiveness was predictable, there is clearly a serious risk in third party submissions of art into applications of others under any system. It will case the application owner to think that someone else thinks their patent application is important enough be worth attacking its claim scope. That is logically going to cause the patent application owner to put extra effort into getting that application allowed, with broad and variable scope claims, including possible RCE's and appeals if necessary, and possibly filing and keeping divisionals and continuations pending. Furthermore, the claims can be amended to distinguish the third party cited art without incurring "intervening rights" as would be the case in a reexamination. While the third parties citing the prior art do not face dangerous estoppels [as in inter partes reexaminations or PGR] they do risk greatly strengthening the enforceability of the resultant patent against that or similar prior art if not all potentially infringed claims are finally rejected.
The rare use of any of the present third party prior art submission systems does not suggest their likely future use, [unlike the increasing use of reexaminations]. The PTO has apparently never kept statistics on the number of prior art filings in other peoples patent applications under present 37 CFR 1.99 (in force since 2000), or otherwise. But I was cognizant of a docketing operation that was handling thousands of pending patent applications, and only one such third party prior art submission was ever identified as being filed against any of those thousands of U.S. applications [excluding those in interferences] and it was not successful in getting any claims rejected.
Perhaps there will be somewhat higher usage and success rates for the new 35 U.S.C.122(e)(1) and 37 CFR §1.290 because it will allow attached explanations of the relevance of the cited art. But until that is demonstrated, the conservative tendency of patent attorneys to save prior art defenses until they think they can be used more effectively later, especially in an inter partes reexamination [where the patent owner cannot make completely unchallenged ex parte arguments against the cited art] seems likely to prevail.
There is of course an academic myth, supported by some companies presumably for its PR value, that was at play in the lead-up to these AIA changes. Namely a strange inherent assumption that large numbers of the public have nothing better to do with their time and money than to undertake the tens of thousands of prior art searches and claim-relevant submissions that would be needed to have any significant effect on patent examination quality for the more than 500,000 patent applications a year, even though they are not aware of any that could ever threaten any of their products. A mere couple of hundred patent applications were provided with prior art submissions under a pilot "Peer to Patent" system, despite all its publicity, of which only a minority resulted in claims being rejected using the submitted prior art.
As usual, I would appreciate comments from others with relevant information on these subjects.
In this post, I discuss the process that the PTO follows in investigating allegations of attorney or agent misconduct. In addition, I review two recent disciplinary decisions. Both involve the submission of information disclosure statement. In one case, the attorney improperly submitted documents subject to a litigation protective order. In the other case, the attorney improperly submitted prior art documents without properly reading and reviewing the documents.
In the recent proposed rule on the statute of limitations for USPTO disciplinary proceedings, new Office of Enrollment and Discipline director William Covey provided a nice summary of the process that his office uses to investigate allegations of improper conduct by registered patent practitioners.
Generally speaking, there are four steps taken by the OED Director prior to the filing of a Sec. 11.32 disciplinary complaint against a practitioner:
Preliminary screening of the allegations made against the practitioner, see Sec. 11.22(d);
requesting of information from the practitioner about his or her alleged conduct, see Sec. 11.22(f)(1)(ii);
conducting a thorough investigation after providing the practitioner an opportunity to respond to the allegations, see Sec. 11.22(a); and
submitting the investigated case to the Committee on Discipline for a determination of whether there is probable cause to bring charges against the practitioner, see Sec. 11.32.
The first step is the preliminary screening of allegations to evaluate whether they merit providing the practitioner the opportunity to address them. Allegations are often incomplete and do not provide the OED Director with a full picture of what may have transpired. In other words, mere allegations do not necessarily provide the OED Director with a reasonable basis for automatically seeking information from the practitioner regarding a possible ethical violation; therefore, the OED Director always conducts an initial review of the allegations. Moreover, the OED Director recognizes that issuing a request for information to the practitioner–the second step–typically triggers anxiety for the practitioner, may interfere with the practitioner's practice, and may cause the practitioner to incur legal expenses in responding to investigative inquiries by OED. For this reason also, OED does not contact the practitioner automatically upon receipt of information alleging a practitioner committed an ethical violation. In short, the OED Director seeks the practitioner's side of the story, if at all, only after the OED Director preliminarily screens the information and determines that possible grounds for discipline exist. See 37 CFR 11.22(d).
During the preliminary screening process, an OED staff attorney reviews the allegations to determine whether they implicate any of the Disciplinary Rules of the USPTO Code of Professional Responsibility. To this end, the attorney may seek out additional evidence (review Office records, request additional information from the person making the allegations or from third persons, etc.) to ensure that the matter is disciplinary in nature and the allegations are supported by objective evidence.
The OED's preliminary screening may obviate the need to seek information from the practitioner because the screening often reveals that the allegations do not present a basis for filing a Sec. 11.32 disciplinary action against the practitioner. Under such circumstances, the OED Director closes the case without contacting the practitioner. Hence, the preliminary screening helps ensure that a practitioner is not subjected to a premature request for information or its attendant stress, turmoil, and cost. The screening also ensures that the Office does not expend its limited resources seeking information from a practitioner unnecessarily.
After the preliminary screening, if the OED Director determines that the allegations establish possible grounds for discipline, the OED Director seeks the practitioner's side of the story–the second step prior to filing a Sec. 11.32 action. Specifically, the OED Director requests information or evidence from the practitioner pursuant to Sec. 11.22(f)(1)(ii). The practitioner will then have an opportunity to respond to the allegations levied against him or her. Typically, the OED Director does not and cannot have sufficient information to complete a thorough investigation–the third step–before the practitioner has had the opportunity to present his or her side of the story.
Based on current caseload and staffing levels, the OED Director has set a goal to complete the preliminary screening and issue a Sec. 11.22(f)(1)(ii) request, when warranted, to the practitioner under investigation within 60 calendar days of the initial receipt by the OED Director of information suggesting possible misconduct. OED will allow the practitioner 30 calendar days to provide a complete, written response and, as discussed below, may grant a reasonable request for an extension of time to respond.
A complete response to an initial Sec. 11.22(f) request frequently raises factual issues that require further investigation before the OED Director can determine whether actual grounds for discipline exist. Hence, after the OED Director receives the practitioner's response to the Sec. 11.22(f)(1)(ii) request, the OED Director moves to the third step: conducting a thorough investigation of the allegations to uncover all relevant incriminating and exculpating evidence. The third step is time-consuming because it involves the OED Director undertaking a thorough fact-finding (e.g., reviewing issues raised for the first time by the practitioner, obtaining information from any person who may be reasonably expected to provide information or evidence in connection with the investigation pursuant to Sec. 11.22(f)(iii) and from non-grieving clients pursuant to Sec. 11.22(f)(2)) and performing legal analyses of issues. It is in the interests of the public as well as the practitioner under investigation that OED conduct a thorough investigation prior to determining whether the matter should be submitted to the Committee on Discipline pursuant to Sec. 11.32. Hence, such additional follow-up investigative and legal work can take several months to complete.
After completing an investigation of the allegations against a practitioner, the OED Director has the authority to close the investigation without pursuing disciplinary action, issue a warning to the practitioner, enter into a proposed settlement agreement with the practitioner, or convene the Committee on Discipline to determine whether there is probable cause to file a Sec. 11.32 action against the practitioner. See 37 CFR 11.22(h). Based on current caseload and staffing levels, the OED Director has set a goal to submit a matter to the Committee on Discipline for a probable cause determination–the fourth step–within 10 months of the initial receipt by the OED Director of the allegations that a practitioner engaged in misconduct.
Over the past year, the USPTO OED has issued 38 Disciplinary Orders. Most of the disciplinary problems come from mishandling of client funds, failure to communicate with clients, unauthorized practice of trademark law (for patent agents), and criminal convictions. However, two recent disciplinary orders relate directly to patent practice decisions relating to difficult issues that regularly arise for patent practitioners. Neither case involves any morality judgment, but both resulted in the (stipulated) finding of a violation of the USPTO's code of conduct.
Conflict created by Parallel Litigation and Reexamination: One recent order involves a "public reprimand" of John Janka. Janka was put a tough position because his client's patent was being simultaneously litigated and reexamined (inter partes). Janka prepared and caused-to-be-filed an IDS in the reexamination that contained material subject to a protective order in the litigation. In addition, Janka sent the confidential documents to another patent practitioner (and asked him to file the IDS) without first obtaining guidance from the district court regarding the protective order. The district court later ruled that these actions violated the protective order. As part of a settlement, Janka agreed with the USPTO that these actions show a violation of 37 C.F.R. § 10.77(b) (handling a legal matter without preparation adequate in the circumstances).
This is a tough case because Janka is obviously under conflicting duties—to both obey the district court's protective order and to disclose material information to the USPTO. The best course of action in this situation would have been to ask the court to lift the protective order regarding the material information. If the court refuses, the patent attorney may have to withdraw from the case. (As an aside, the patentee won both the litigation and the reexamination).
Submitting IDS without reading documents: In a related OED settlement, William Bollman agreed to a 24-month probationary period. Bollman – himself a very experienced patent prosecutor – was the attorney who actually filed the IDS for Mr. Janka. Bollman admitted that he did not actually read, review, or inspect the six boxes of documents that he received from Janka and filed at the PTO. The order includes the following statement:
Pursuant to 37 C.F.R. § 11.18(b)(2)(i)[], a registered practitioner who presents a paper to the Office [implicitly] certifies to the best of his or her knowledge, information, and belief formed after an inquiry reasonable under the circumstances that, inter alia, the paper is not being presented for any improper purpose. A practitioner who submits an information disclosure statement without inspecting the submitted documents -i.e., merely acts as a conduit for another person – is considered to have made a false certification to the Office.
This rule follows former OED director Harry Moatz's 2008 statements regarding the submission of papers without proper inspection by the patent law professional responsible for the filing.
Have you submitted an IDS without reading and reviewing the submitted documents?
The text of of the rule is provided below.
37 C.F.R. § 11.18(b). By presenting to the Office … any paper, the party presenting such paper, whether a practitioner or non-practitioner, is certifying that—
(1) All statements made therein of the party's own knowledge are true, all statements made therein on information and belief are believed to be true, and all statements made therein are made with the knowledge that whoever, in any matter within the jurisdiction of the Office, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or knowingly and willfully makes any false, fictitious, or fraudulent statements or representations, or knowingly and willfully makes or uses any false writing or document knowing the same to contain any false, fictitious, or fraudulent statement or entry, shall be subject to the penalties set forth under 18 U.S.C. 1001 and any other applicable criminal statute, and violations of the provisions of this section may jeopardize the probative value of the paper; and
(2) To the best of the party's knowledge, information and belief, formed after an inquiry reasonable under the circumstances,
(i) The paper is not being presented for any improper purpose, such as to harass someone or to cause unnecessary delay or needless increase in the cost of any proceeding before the Office;
(ii) The other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(iii) The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(iv) The denials of factual contentions are warranted on the evidence, or if specifically so identified, are reasonably based on a lack of information or belief.
Plasmart v. Kappos & Wang (Fed. Cir. 2012) 
(OUP 2012), 