Tag Archives: USPTO Director

David Kappos and The Impact of KSR – a unique opportunity for our profession

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Guest Post by Paul Cole, Visiting Professor, Intellectual Property Law, Bournemouth University, UK

On Tuesday 24 November, David Kappos made a posting on the Director’s Forum including the following statement:

Some have suggested that the Office is determining obviousness in a way that stifles innovation by refusing patents for truly inventive subject matter. They’ve asked us to provide examples of non-obvious claims in view of KSR. Such examples would serve as a complement to the examples of obvious claims already in the guidelines.

David Kappos gave a presentation at the AIPLA Annual Meeting in Washington on October, and in a question and answer session that followed there were three questions which concerned KSR, more than any other topic. The two questioners who preceded me expressed dissatisfaction with seemingly unjust and arbitrary rejections for lack of inventive step. I asked whether the US examination guidelines on inventive step could be brought into line with those of the EPO, where positive and negative examples are carefully balanced, and the suggestion created a burst of applause from the audience.

More detained comments on the suggestion are found in a paper on KSR that was published in the John Marshall Review of Intellectual Property Law in 2008[1]. For convenience of reference, the final section is set out here:

The USPTO has been accused of having become significantly less applicant-friendly following the KSR decision. This may reflect concerns about “patent quality” and is reflected in the Guidelines given to examiners. A big difference is noticeable between the EPO Examination Guidelines and those of the USPTO.

The EPO Examination Guidelines at Part C Chapter IV give examples relating to the requirement of inventive step. Considerable care has been taken to balance these examples. Examples illustrating the application of known measures in an obvious way and in which inventive step can be ruled out are balanced by further examples showing the application of known measures in a non–obvious way and in which an inventive step is therefore to be recognized. An example of an obvious and consequently non-inventive combination of features is balanced by an example of a non-obvious and consequently inventive combination of features. Examples of obvious and consequently non-inventive selection are balanced by examples of non-obvious and consequently inventive selection. The single example relating to overcoming a technical prejudice shows a situation where the application should be allowed, not refused. A reader of these Guidelines is made aware that although many applications are open to objection, there are many others that cover meritorious inventions and should be allowed.

When the USPTO issued its post-KSR Guidelines, from the standpoint of a prosecution attorney they made depressing reading. For example, the first heading which refers to combining prior art elements according to known methods to yield predictable results gives two examples, one of which is Andersons-Black Rock, Inc. v. Pavement Salvage Co. and the other of which is Ruiz v SAB Chance Co. in both of which obviousness was established. There is no balancing example in which inventive character was established. There follow five other headings illustrated by examples, each and every one of which shows the claimed subject matter to be obvious. The final heading concerns the TSM test which is not illustrated by any example. Under the heading “Consideration of Applicants Rebuttal Evidence” there are cursory indications that an applicant might have something relevant to say in reply, and that, for example, they might argue that the claimed elements in combination do not merely perform the function that each element performs separately. Might it not have been a good idea to inform the Examining Corps that if an applicant can demonstrate a new and unexpected result, this is strong prima facie evidence of inventive step, that this fact is supported by several opinions of the U.S. Supreme Court and that where such evidence is available an applicant should unless there are compelling reasons to the contrary expect a grant decision to follow? Experience in the EPO is that where an applicant can demonstrate a credible technical problem that he has solved, he will almost always be granted a patent and that although other objections, e.g. “one–way-street” or “bonus effect” are available, circumstances where such objections succeed are rare, as acknowledged by the U.K. High Court in Haberman.

Instructions to examiners are of general importance to the public because they are the main tool used during examination and the important event for most applicants is grant or refusal by the patent office, litigation of patents (even in the U.S.) being uncommon. Instructions are even more important for examiners who are trainees and those who have only recently acquired signatory authority because they are likely to rely chiefly on those instructions and to take some time to achieve a deep understanding of case law. It is important to teach examiners when to make objections and the appropriate grounds for doing so, but is it not equally important to teach them when applications should be allowed and to show them examples of patents whose validity has been upheld, as the EPO does? Quality patent examination is not just a matter of ensuring that applications lacking merit are reliably refused but also of ensuring that meritorious applications are reliably granted.

It now seems that there is at least a chance that the suggestion that I and apparently others have made will be acted on, and that the possibility is under active consideration in the USPTO. Examples of decisions on new function or result which are contained in my paper include the nineteenth century Supreme Court cases Winans v Denmead and Washburn & Moen Manufacturing, Co. v. Beat’Em All Barbed-Wire Co, these decisions being selected on the basis of their instructive character and accessibility to the widest possible range of readers.

For the most to be made of this opportunity, we as students and users of the patent system can help by suggesting additional positive decisions which it would be good for the USPTO to include in the revised inventive step Guidelines. Hopefully readers will respond with references to good Board of Appeals, District Court and CAFC cases, and I look forward to reviewing a large number of hopefully constructive suggestions posted here in response.

[1] Paul Cole, KSR and Standards of Inventive Step: A European View, 8 J. MARSHALL REV. INTELL. PROP. L. 14 (2008)., downloadable from /media/docs/2011/06/Cole.pdf.

Patently-O Bits and Bytes No. 303

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  • Professor Lichtman and his students at UCLA reenact Bilski v. Kappos. [Download the MP3]
  • Jeremy Grushcow discusses “three need-to-know Canadian patent decisions that impact pharma, biotech and generic companies”: [LINK]
    • Lundbeck v. Ratiopharm (the Canadian Patent Act imposes a duty of candor).
    • Bayer v. Canada (the government will only list a formulation pharma patent in its patent register (i.e., Orange Book) if the patent claims include limits to “all of the approved medicinal ingredients” in the formulation).
    • Sanofi-Aventis v. Hospira (a disclaimer of scope may be filed after receipt of a notice of allegation).
  • Director Kappos discuses the “impact of KSR” on his blog: [LINK]

KSR has unquestionably refocused the obviousness inquiry by reinvigorating the fundamental questions of Graham. Because the Supreme Court clarified that teaching-suggestion-motivation was not the sole test of obviousness, the Graham analysis is not to be carried out in a rigid manner. As a result, some claims that may have been found to be non-obvious before KSR will now correctly be found to be obvious.

Inventors and practitioners will need to take these developments into account when preparing and prosecuting applications. For example, it may be necessary to review a broader cross-section of prior art than was previously necessary, or to consider filing evidence of unexpected results earlier rather than later in the course of prosecution. By being proactive, practitioners will expedite prosecution and avoid unnecessary fees and RCE filings.  

  • New lawsuits against Kappos (in his role as PTO director)
    • Cephalon France v. Kappos (patent term adjustment recalculation).
    • Komipharm International v. Kappos (demanding that it be recognized as the assignee of its patent rights).
    • Tolerx v. Kappos (patent term adjustment).
    • Centre National De La Recherche Scientifique v. Kappos (patent term adjustment).
    • Mosaid Tech. v. Kappos (patent term adjustment).

Patently-O Bits and Bytes No. 303

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  • Professor Lichtman and his students at UCLA reenact Bilski v. Kappos. [Download the MP3]
  • Jeremy Grushcow discusses “three need-to-know Canadian patent decisions that impact pharma, biotech and generic companies”: [LINK]
    • Lundbeck v. Ratiopharm (the Canadian Patent Act imposes a duty of candor).
    • Bayer v. Canada (the government will only list a formulation pharma patent in its patent register (i.e., Orange Book) if the patent claims include limits to “all of the approved medicinal ingredients” in the formulation).
    • Sanofi-Aventis v. Hospira (a disclaimer of scope may be filed after receipt of a notice of allegation).
  • Director Kappos discuses the “impact of KSR” on his blog: [LINK]

KSR has unquestionably refocused the obviousness inquiry by reinvigorating the fundamental questions of Graham. Because the Supreme Court clarified that teaching-suggestion-motivation was not the sole test of obviousness, the Graham analysis is not to be carried out in a rigid manner. As a result, some claims that may have been found to be non-obvious before KSR will now correctly be found to be obvious.

Inventors and practitioners will need to take these developments into account when preparing and prosecuting applications. For example, it may be necessary to review a broader cross-section of prior art than was previously necessary, or to consider filing evidence of unexpected results earlier rather than later in the course of prosecution. By being proactive, practitioners will expedite prosecution and avoid unnecessary fees and RCE filings.  

  • New lawsuits against Kappos (in his role as PTO director)
    • Cephalon France v. Kappos (patent term adjustment recalculation).
    • Komipharm International v. Kappos (demanding that it be recognized as the assignee of its patent rights).
    • Tolerx v. Kappos (patent term adjustment).
    • Centre National De La Recherche Scientifique v. Kappos (patent term adjustment).
    • Mosaid Tech. v. Kappos (patent term adjustment).

Patently-O Bits and Bytes No. 303

Patent, ,
  • Professor Lichtman and his students at UCLA reenact Bilski v. Kappos. [Download the MP3]
  • Jeremy Grushcow discusses “three need-to-know Canadian patent decisions that impact pharma, biotech and generic companies”: [LINK]
    • Lundbeck v. Ratiopharm (the Canadian Patent Act imposes a duty of candor).
    • Bayer v. Canada (the government will only list a formulation pharma patent in its patent register (i.e., Orange Book) if the patent claims include limits to “all of the approved medicinal ingredients” in the formulation).
    • Sanofi-Aventis v. Hospira (a disclaimer of scope may be filed after receipt of a notice of allegation).
  • Director Kappos discuses the “impact of KSR” on his blog: [LINK]

KSR has unquestionably refocused the obviousness inquiry by reinvigorating the fundamental questions of Graham. Because the Supreme Court clarified that teaching-suggestion-motivation was not the sole test of obviousness, the Graham analysis is not to be carried out in a rigid manner. As a result, some claims that may have been found to be non-obvious before KSR will now correctly be found to be obvious.

Inventors and practitioners will need to take these developments into account when preparing and prosecuting applications. For example, it may be necessary to review a broader cross-section of prior art than was previously necessary, or to consider filing evidence of unexpected results earlier rather than later in the course of prosecution. By being proactive, practitioners will expedite prosecution and avoid unnecessary fees and RCE filings.  

  • New lawsuits against Kappos (in his role as PTO director)
    • Cephalon France v. Kappos (patent term adjustment recalculation).
    • Komipharm International v. Kappos (demanding that it be recognized as the assignee of its patent rights).
    • Tolerx v. Kappos (patent term adjustment).
    • Centre National De La Recherche Scientifique v. Kappos (patent term adjustment).
    • Mosaid Tech. v. Kappos (patent term adjustment).

In Defense of Software Patents

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Guest Post by Martin Goetz

 

This article is in response to the editorial “Abandoning Software Patents” by the Ciaran O’Riordan, Director of End Software Patents (posted on PatentlyO on November 6, 2009) which had as its premise that one is trying to protect “software ideas”.< ?xml:namespace prefix ="" o />

 

I wrote this article from a unique perspective as the holder of the first Software Patent in 1968 and with a long history of involvement in the protection of software thru patenting and copyright protection. I am recognized as a pioneer in the Software Products Industry and had a successful career at Applied Data Research (ADR), the first company to market a software product. ADR and I were also directly involved in the filing of amicus briefs in the Prater & Wei, Benson, Johnson, Flook, and Diehr cases. More background information and links to my memoirs are in Wikipedia at http://en.wikipedia.org/wiki/Martin_Goetz.

 

Since the 1960s I have been a strong advocate of the patenting of inventions implemented in software and in 1968 I received the first < ?xml:namespace prefix ="" st1 />US patent for an inventive way of sorting data on a digital computer[1]. At that time there was controversy over whether software was patentable subject matter and that controversy continues today 41 years later. Although the Supreme Court has previously stated that software is patentable subject matter[2], those rulings could be upset by today’s Supreme Court judges in the Bilski case.

 

This article does not argue for or against the patenting of BPMs. Rather, it tries to explain why inventions implemented in software are well within current US Patent Law[3] using examples and analogies that I believe are irrefutable. It also explains why software should be viewed a machine component of a general purpose computer (a machine).

 

 1. What is a Software-Related Invention? It is well recognized that whatever you can design in hardware circuitry (chips) can be developed in computer software (a computer program) to perform the same functions. Handwriting analysis, voice recognition, video frame analysis, data compression, language translations, artificial intelligence, searching techniques, network monitoring and security — to name just a few functions — are examples of where such implementations have been done in both hardware chips, in software, and a combination of both. The patents that have been issued in these nine areas represent inventions that are very-state-of-the art and not at all obvious. In particular, the analysis of handwriting and voice by a computer — whether in hardware circuitry or in software — is very complex and not at all obvious to one skilled in the art.
 
2. Hardware implementations versus software implementations. The choice of implementation for computer functions is a pure economic choice which mainly has to do with cost, speed, and flexibility. Patent applications normally show the preferred implementation and the patent must disclose the invention adequately for one skilled in the art. But the disclosure could be in the form of circuitry for a hardware implementation or a flow chart for a software implementation or a combination of both. Many professionals view software development as building a software machine. The life cycle of computer software is very similar to the life cycle of computer hardware. And its life span can be equally as long.

 

3. Software Product Companies[4] are High Technology Manufacturing Entities. In the 1980s with the advent of PCs, many new PC software companies called themselves Software Publishers. So are software companies more like publishers of books or more like manufacturers of machines? Based on my many years in the software Products Industry[5], here are my arguments why software product companies are manufacturers of high technology products. 

 

Many software products are state-of-the-art products developed in a very competitive, fast moving environment and require rapid response to meet user demand. Secondly, a great deal of capital is often required and many software companies are funded through private investments, venture capital, and through public offerings. Thirdly, there are active research and development activities within these companies. IBM, as an example has reported that it consistently spends well over one billion dollars in research and development specifically in the software area. Lastly, highly skilled personnel are employed in these companies and many have advanced Computer Science college degrees, including PhDs. And because of its complexity, many software products are built using software engineering disciplines.

 

There is six phases in the life cycle of software products: Definition, Design, Implementation, Delivery, Maintenance, and Enhancements. Let’s look a little closely at these phases and you will see how closely they resemble characteristics common to all manufacturing companies. Often, prior to the definition phase there is research as well as competitive analysis. During the definition phase software companies describe its functionality, its specifications, the environment in which it must operate, and its operating characteristics. During the design phase, it develops and defines all its interfaces, breaks down the functionality into modules, and does all the engineering so that the product can be properly implemented, maintained and enhanced during its lifecycle. During the implementation phase the software is debugged, tested, and goes thru quality assurance. During the delivery phase there is alpha and beta testing, documentation, installation, and training. Often software companies OEMs (Original Equipment Manufacturers) the product to other companies where the software becomes a component of a larger system and is re-packaged. During the maintenance phase the company warrants its workmanship, and guarantees the correction of errors and defects. Finally, during the enhancement phase the software is improved, enhanced, upgraded, and new models (releases) are announced.

 

Note these terms indicative of a manufactured product …..research, competitive analysis,  functionality, specifications, operational environment, operating characteristics, interfaces, modules, engineering, implemented, debugged, tested, quality assurance, alpha and beta testing, documentation, installation, training, OEM, component, system, re-packaged, maintenance, warrants, workmanship, guarantees, errors, defects, improved, enhanced, upgraded, and models.

 

It is obvious that software products are not “software ideas”. But is software more like publishing a book or more like manufacturing and maintaining a machine? And if it’s more like a machine how can the Supreme Court deny the patenting of inventions[6] in software?  

 

I believe the Courts should view software as a component of a general purpose computer (a machine) and that software transforms a general purpose computer into a special purpose computer (or machine).


[1] Patent # 3,380,029 Sorting System Issued April 23, 1968

 

[2] The Diamond vs. Diehr landmark decision by the Supreme Court in 1981 opened the door to the patenting of software when the court stated that “processes” were patentable, and that just because an invention used a formula, program, or computer, it was not necessarily unpatentable.

 

[3] The US Patent Law does not mention any industry or field of endeavor and it is generally accepted that “anything under the sun” can be patented.

 

[4]  The Software Industry is made up Software Product and Software Service companies and is recognized as one of the top three manufacturing industries in the world with 2008 revenues of over 700 Billion dollars. See http://en.wikipedia.org/wiki/Software_industry 

 

[5] My tenure in this Industry started in 1954. In 1959 I was one of its founders and spent almost 30 years at Applied Data Research (ADR), a publicly traded 200 Million software company that was acquired by Ameritech in 1986 and sold to Computer Associates (CA) in 1988. Many of ADR’s products initially developed over 30 years ago have been improved by ADR and CA and are still viable today. Today, I am a consultant and investor in software companies.

 

[6] An invention, in lay terms, can be a novel device, material, or technique which is new, inventive, and useful. It has been well established that machines, including computer hardware, contain patentable subject matter.

 

 

Patently-O Bits and Bytes No. 301

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Jobs Postings from the Past Week:

Interviewing Director Kappos: Tony Mauro writes a comical story about one reporter’s quest to interview David Kappos:

[W]hen ABA Journal senior writer Terry Carter got nowhere in his recent effort to reach Patent and Trademark Office director David Kappos . . . he decided on a characteristically novel approach: on Tuesday he drafted and posted a humorous patent application for a “method to get an interview with USPTO Director David Kappos.” Edward Adams, editor and publisher of the ABA Journal, wrote in this story at the Journal Web site, “We figured the problem was that Carter was not speaking the agency’s language.” [Link][Read the Application]

Next Federal Circuit Judges and en banc petitions:

  • There is currently one open slot on the Federal Circuit. In the interim, it should be statistically slightly easier to get the court to agree to an en banc rehearing. Instead of convincing seven of twelve (58%), now a successful petitioner need only convince six of eleven (55%).

Patently-O Bits and Bytes No. 301

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Jobs Postings from the Past Week:

Interviewing Director Kappos: Tony Mauro writes a comical story about one reporter’s quest to interview David Kappos:

[W]hen ABA Journal senior writer Terry Carter got nowhere in his recent effort to reach Patent and Trademark Office director David Kappos . . . he decided on a characteristically novel approach: on Tuesday he drafted and posted a humorous patent application for a “method to get an interview with USPTO Director David Kappos.” Edward Adams, editor and publisher of the ABA Journal, wrote in this story at the Journal Web site, “We figured the problem was that Carter was not speaking the agency’s language.” [Link][Read the Application]

Next Federal Circuit Judges and en banc petitions:

  • There is currently one open slot on the Federal Circuit. In the interim, it should be statistically slightly easier to get the court to agree to an en banc rehearing. Instead of convincing seven of twelve (58%), now a successful petitioner need only convince six of eleven (55%).

Patently-O Bits and Bytes No. 301

Patent, , ,

Jobs Postings from the Past Week:

Interviewing Director Kappos: Tony Mauro writes a comical story about one reporter’s quest to interview David Kappos:

[W]hen ABA Journal senior writer Terry Carter got nowhere in his recent effort to reach Patent and Trademark Office director David Kappos . . . he decided on a characteristically novel approach: on Tuesday he drafted and posted a humorous patent application for a “method to get an interview with USPTO Director David Kappos.” Edward Adams, editor and publisher of the ABA Journal, wrote in this story at the Journal Web site, “We figured the problem was that Carter was not speaking the agency’s language.” [Link][Read the Application]

Next Federal Circuit Judges and en banc petitions:

  • There is currently one open slot on the Federal Circuit. In the interim, it should be statistically slightly easier to get the court to agree to an en banc rehearing. Instead of convincing seven of twelve (58%), now a successful petitioner need only convince six of eleven (55%).

Kappos Blog & First-to-File

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Director Kappos has created a new blog that is available via the PTO website. The blog (titled the “Director’s Forum”) looks to be an excellent avenue for the Director to stay in-touch with patent practitioners and patent applicants – both to receive input from the IP community and to serve as a pulpit for PTO proposals. The blog allows comments, although they are moderated.

The first post focuses on how the PTO is attempting to “work for independent inventors.” In one portion, Kappos focuses on legislative patent reform and a move to a first-to-file system:

With regard to the patent-priority system, the bill’s proposal to move to a first inventor to file system really represents only a minimal change to the process we use now. The new system would not create a situation where someone could steal an idea and win a race to the patent office. That person would not be an inventor and would not be eligible for a patent in the first place. Keep in mind that there are stiff penalties in place to protect against that. So the real issue involves the case of simultaneous non-collaborative invention that is currently resolved through the interference system.

The truth is that only .01 percent of all patent applications could be affected by a change to first inventor to file. The interference system is already biased in favor of the first inventor to file and 70 percent of the extremely small number of cases that get into the interference process are decided in favor of the first inventor to file. For more on these and other issues, I would encourage you to read the text of the speech I gave at the Conference on our Web site.

Of course, it is not true that “only 0.01 percent of all patent applications” could be impacted by a change to first-to-file. The problem is that this figure does not take into account the frequency that patent applicants rely on their invention date to avoid prior art by swearing behind a reference. My own studies find that about 1% of applicants attempt to swear-behind prior art. Applicants swear behind more often in applications that might be termed “valuable.” While still small, the 1% frequency is 100 times greater than the PTO’s 0.01% figure (which appears to be based on interference tallies).

The data also ignores the frequency that invention date is relied upon during litigation. My preliminary studies show that invention date is more frequently at issue in infringement litigation than at the PTO.

Notes:

Abandoning software patents?

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Editorial by Ciarán O'Riordan, Exective Director of End Software Patents

Scope

On Monday, November 9th, the Supreme Court will hear the case of Bilski's business method patent. Being the first review of patentable subject matter since 1981, this decision could make the rules for decades to come. The court will review the 2008 ruling of the CAFC which created the "particular machine or transformation" test. This test, depending on who's reading it, could significantly narrow the scope for patenting software ideas.

The Supreme Court isn't obliged to rule on the patentability of software ideas. Bilski's patent is a business method patent, not a software patent. So why might the court make a broad ruling which would cover software? For people who are already aware of the legal arguments, I'd like to offer a review of the socio-economic arguments for abandoning software patents.

Practitioner profile

To see how different software is from most patentable fields, you just have to look at the practitioners. There is a small number of large companies with well known products, and there is a mass of small companies. The low cost of entry to software development means the number of small companies is particularly large, but we'll leave that aside to look at a bigger difference. In most patentable fields, this pyramid of big and small companies describes how products are made. If this were true for software, then the decision of patentability would be an economic decision, and some costs might have to be reduced, but there'd be no fundamental incompatibilty. But in software, this is only half the story.

In software, unlike in other patentable fields, there are two additional categories of developers. The first is the software developers that sit in the IT departments of every medium sized company. They're the folk that keep the emails flowing, who make internal software, extend software bought by the company, and who run the website. The second group is individuals, informal groups and communities who program for their own benefit or for social reasons such as providing alternatives to software seen as overly restrictive.

The existence of these two categories changes everything because it's obviously unreasonable to require them to work within the patent system, and it's unjustly restrictive. Not only are patent incentives obviously not necessary to motivate IT departments to fix problems, the timeline and budgets are orders of magnitude out of sync with the speed and costs of writing software. When a company manager reports a website problem, they don't expect the IT department to reply about first seeking legal advice for a patent search, and they don't expect to later have a bill from a patent holder because of the way in which the IT department happened to fix the problem.

For user communities programming to suit their own needs, the costs and timeline are also unreasonable, but there is also the bigger problem that the patent holder gains veto power over the distribution of the software. If the software is written for the purpose of having a freely redistributable program, then this third-party veto spoils the developer's efforts. There will be no direct profits from which to offer royalty payments, so the result is a lose-lose situation where the developer's goal is blocked, and there's isn't even anything in it for the patent holder (although the patent will still be enforced to sink the piece of software so that computer users are pushed toward a program which will pay royalties to the patent holder).

Standards

This issue is further exasperated by a problem which applies to all types of software developer: in no other domain are modern standards as crucial as they are in software. If you want to cure rubber, there are many ways to do it. When patents block a product developer from using one method, there's the possibility of useful innovation when that developer looks for an alternative method. In software, being blocked from using an email, image, or document format equates to being prohibited from writing a functional email reader, image viewer or word processor. Can you imagine the utility of an innovative word processor that can't read any existing documents? Nobody would use this, which means any innovations therein would have been wasted effort.

For video, this problem is a reality. The MPEG-LA group claims to represent more than twenty patent holders which each have one or more essential patents for implementing the commonly used mpeg video format. There's no licence available for freely redistributable software, and even royalty payers have to agree to MPEG-LA's terms. The committee developing the next standard for webpages, HTML5, spent months searching and debating which video format they could recommend in the standard, and the final answer was that, due to software patents, there is today no format they can recommend.(ref-1)

When "user communities" grow up

Now, it's important to look at the output of the mentioned user communities. If like, say, hobbiest watchmakers, they just catered for themselves and a few friends without attracting the attention of patent holders, then this wouldn't be a big problem. The system would still be unjust, but if the injustice never manifested itself, then it would be theoretical issue.

Indeed, freely redistributable software and the work that was begun by idealists and hobbyists has now lead to the world's most used webserver, the world's second most used web browser, and the GNU/Linux operating system. Indeed, the "users" are nowadays often employees, and their collaborative development models have emerged as the primary competitors in many software domains. Blocking collaboration turns out not only to be a restriction on useful individual activities, but it also stiffles competition and the mass production of useful software.

In software, rather than supporting innovators, patents protect the old against the new.

Although large firms now contribute to these projects, many of the developers are still individuals and people who don't directly profit. The terms of distribution for this software are the same now as they always have been. It's a proven formula, and a key clause is that you can't distribute if patent royalties will be required.

Example: GNU/Linux

The kernel of the GNU/Linux operating system was examined by patent attorney Dan Ravicher, who announced on August 2, 2004, that he had found no court-validated patents to be infringed but 283 *issued patents* existed which could potentially be used to support patent claims.(ref-2) Thereafter, Microsoft in the 2007 began claiming that the kernel violates 235 of its patents – although the patents have never been specified.(ref-3) Neither could be precise, but they these give us ballpark figures.

The kernel one component, and because the human-written source code is online, we can see it contains approximately 4,000,000 lines of source code. Given that a distribution of the GNU/Linux operating system, complete with applications, can contain software with more than 225 million lines of source code, when we extrapolate from the kernel numbers, we arrive at the possibility of 13,160 or 15,848 patent infringements per complete distribution.(ref-4) All of this in something that can be distributed once or a thousand times, usually at no cost, sometimes large corporations, sometimes by individuals.

This is a degree of uncertainty that can't be fixed by changes in evaluation standards.

As for innovation, lists and lists of research suggests that patents reduce software innovation.

There was a time when if you wrote something, you owned it, you could sell it, you could give it away. It could be put in the accounts and it could be used as the base for collaboration. Now, ownership of a piece of software is hopeful speculation. There is no reliable way to have a settled expectation regarding the boundaries or the extent to which you own a piece of software. This uncertainty, and this unfair regulation is what the Supreme Court has the chance to rid us of by giving the USPTO a reliable tool for excluding software ideas from patentable subject matter.

— Ciarán O'Riordan is Exective Director of End Software Patents

Challenging the Constitutionality of Gene Patents: Ass’n for Medical Pathology v. USPTO

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Association for Medical Pathology & ACLU v. USPTO & Myriad, 09-cv-4515 (S.D.N.Y. 2009)

Earlier this year, a group of organizations and individuals filed suit against the USPTO, Myriad, and individual directors of the University of Utah Research Foundation (ex parte Young action) demanding that the breast cancer gene patents (BRCA1 & BRCA2) be found invalid or unenforceable and that the PTO’s policies and practices with respect to genetic patents be declared unconstitutional. The federal lawsuit argues (1) that the genes are not patentable because they are “products of nature” and (2) that the patentee’s use of patent rights to limit scientific research on the genes violates constitutional First Amendment protections. The defendants moved to dismiss based on various standing and jurisdictional issues. In an 85 page opinion, Southern District of New York Judge Robert Sweet has denied all of the defendants’ motions to dismiss.

Judge Sweet recognized this case as important:

This action is unique in the identity of the parties, the scope and significance of the issues presented, and the consequence of the remedy sought. . . . The challenges to the patents-in-suit raise questions of difficult legal dimensions concerning constitutional protections over the information that serves as our genetic identities and the need to adopt policies that promote scientific innovation in biomedical research.

Jurisdiction & Standing to Sue the USPTO: The court found that the overarching statutory scheme of the Patent Act did not preempt the court’s jurisdiction over the PTO in this case since the Patent Act does not “provide a remedy for persons who complain about the constitutionality of patents issued by the USPTO and/or the policies and practices of the USPTO. . . . The novel circumstances presented by this action against the USPTO, the absence of any remedy provided in the Patent Act, and the important constitutional rights the Plaintiffs seek to vindicate establish subject matter jurisdiction over Plaintiffs’ claim against the USPTO.”

The court also found that the plaintiffs have standing to sue the USPTO for their Constitutional grievances; declaratory judgment jurisdiction over Myriad and the Directors, and personal jurisdiction over the Directors as representatives of the State of Utah.

In the final few pages, Judge Sweet outlined plaintiffs’ case against the USPTO:

In this case, the Plaintiffs have pled sufficient factual allegations to satisfy the standard set forth in Iqbal. The Complaint alleges the existence of a specific, written policy for the patenting of genes and the parameters of the policy. . . . The Complaint further alleges that the information encoded in the BRCA1/2 genetic sequences, rather than being the result of an inventive process, exists in nature. . . . Based on these factual allegations, the Plaintiffs assert that the patents-in-suit grant Myriad ownership rights over products of nature, laws of nature, natural phenomena, abstract ideas, and basic human knowledge and thought in violation of the First Amendment’s protections over freedom of thought. In addition, the Plaintiffs assert that Myriad’s ownership of correlations between certain BRCAl/2 mutations and an increased risk of breast and/or ovarian cancer has inhibited further research on BRCA1/2 as well as genes that interact with BRCA1/2. As a result, the patents-in-suit are alleged to violate Article I, section 8, clause 8 of the Constitution which directs Congress to “promote the Progress of Science and useful Arts . . . .”

The facts alleged in the Complaint are plausible, specific, and form a sufficient basis for Plaintiff’s legal arguments. Consequently, the pleading requirements as set forth in Iqbal are satisfied.

The next decision in the case is expected in January based on the Plaintiffs’ motions for summary judgment.

MTD decision.pdf

Does a Reference’s Priority Claim to a Provisional Application Alter its 102(e) Prior Art Date?

Patent, ,

In re Giacomini (Fed. Cir. 2009) (discussion of the briefs)

Giacomini is appealing the BPAI’s 102(e) rejection — arguing that the patent asserted as prior art does not actually qualify as prior art. Giacomini’s application claims priority back to November 2000. The asserted prior art patent issued in 2006, but was filed in December 2000. The prior art patent also claims priority to a provisional application filed in September 2000. The PTO claims that the 102(e) date of the patent is the filing date of the provisional — thus making it prior art over Giacomini.

When a patent is asserted under 102(e)(2), the patent’s filing date is considered the priority date. In the language of the statute, the PTO must consider whether the putative prior art patent was “granted on an application for patent … filed in the United States before the invention by the applicant for patent.” The provision makes clear that a patent claiming priority to an international application will be given the international application filing date if that application “designated the United states and was published . .. in the English Language.” Under US case law, when being considered as prior art, divisional and continuation patents are also given the filing dates of their parents as their 102(e) date. See In re Klesper (CCPA 1968)(“provided the disclosure was contained in substance in the earliest application”). However, patents claiming priority to a foreign filing under Section 119 are not given the foreign priority date.

The novel question here on appeal is how to interpreted the statute’s silence regarding provisional applications.

Nudging Against RCE Filings

Patent,

200910211319.jpgFollowing the Sunstein-Thayler nudge theory, the new PTO administration is taking small non-rule-based steps to discourage the filing of Requests for Continued Examination (RCEs). RCE’s are already fairly expensive – $810. That outlay is relatively low compared with the cost of preparing and filing an appeal – especially when it appears that an applicant’s arguments have not been fully considered or when the applicant perceives the opportunity for an amendment that would lead to allowance.   

Timing: In the past, one benefit of RCEs was that they were quickly examined as part of the theory of compact-prosecution – in essence, RCE filings were treated almost just like an office action response. Under a new procedure, the PTO will now be placing RCE applications in the same queue as divisional and continuation applications. Although that category is identified as “special new,” cases are typically taken-up more slowly than ones already on the docket and in-prosecution. According to a memo from Director Kappos, “The change to the docketing of requests for continued examination means that examiners are no longer required to act on a request for continued examination within two months of the entry of the request for continued examination on their docket. This change to the docketing of requests for continued examination is being made to allow examiners greater flexibility in managing their workload and allocating their time among requests for continued examination and new applications.” [Note – I’ll see if I can pull-up data on the typical delay from filing a continuation until a First Action on the Merits (FAOM)]. [Kappos Memo – rce_docket.pdf]

Examiner Incentives: One of my students – Jaron Brunner – recently wrote an excellent paper applying negotiations theory to the patent prosecution process. Jaron is certainly correct that many aspects of patent prosecution can be thought of as a negotiation process. With that mindframe, it is easier to recognize that – although applicants are the parties that actually file the RCE’s – examiners do play a role in taking prosecution to the point of RCE filing. The new examiner count-system addresses this problem by reducing the credit (counts) that examiners receive for examining RCE filings and increasing the credit for initial office actions. As part of the nudge toward focusing on the important issues early-on in prosecution, the PTO is also providing more incentives to examiners to have discussions (interviews) with applicants rather than rely solely on formal paper filings that are often misunderstood and left unread.

Allowing Allowable Claims: Perhaps the biggest nudge is a change in philosophy – dropping the notion that “a lower allowance rate equals higher quality.” At least in their speeches, PTO management is encouraging examiners to work more directly with applicants to “find the patentable subject matter and get it clearly expressed in claims that can be allowed.”

In both FY2008 and FY2009, applicants filed over 100,000 requests for continued examination.

Bits and Bytes No. 134: Personnel – Past and Present

Bits and Bytes, Patent,
  • Duke Law Professor Arti Rai has started work at the USPTO as the "Administrator for External Affairs." Although not a registered patent attorney, Rai had a focus on biochemistry at Harvard and attended one year of Harvard Medical School before heading to law school (again at Harvard). [cv] In addition to her extensive knowledge of the patent system, Rai is an expert on administrative law. In her writings, she typically argues that the PTO should be given more independence and power.
  • Professor Rai's new position will likely focus on PTO relations with other US governmental entities as well as with foreign governmental entities.
  • Professor Rai offered remarks at the Collegiate Inventors Competition in Chicago on Monday evening. Here are a few quotes:
  • "As I know from my research, and from my own sister’s experience with her biotech startup, inventors need this protection in order to attract research and development capital. The challenge we face at the USPTO is ensuring that inventors can always look to us for strong and speedy protection."
  • "Since taking office a little over two months ago, Director Kappos has moved aggressively to reform the office, expedite the way in which we examine patents, update our IT infrastructure, and reach out to stakeholders and members of Congress to provide a sustainable funding mechanism for the USPTO. We are committed to using all of the tools at our disposal to reduce the amount of time it takes for inventors to get the patents they need to bring products to the marketplace. You will be hearing more in the months to come, so stay tuned and keep believing in your ability to change the world with your inventions."
  • IP Hall of Fame Nominations: Nominations have opened for IAM Magazine's Annual Award to "honour those who have made an outstanding contribution to the development of IP law and practice." http://www.iphalloffame.com/
  • Call for Papers: Next Generation of Antitrust Scholarship Conference

PTO Deputy Director: Sharon Barner

Patent,

The USPTO has announced that Sharon Barner of Foley & Lardner has agreed to become Deputy Director of the USPTO. Barner is the head of Foley’s large IP department and has been a supporter of Obama since his youthful days in the Illinois legislature. As was the case with Kappos, Barner will be taking an extreme pay cut, opening herself to public criticism; and moving to DC. She should be applauded for her willingness to become a public servant. Under the law, the USPTO Director has the power to nominate his Deputy, but the actual appointment is done by the Secretary of Commerce (Locke).

The patent office has substantial problems that need to be addressed and that would be addressed regardless of who is in charge at the PTO. The benefit of Kappos & Barner is that have decades of patent law experience and are both committed to building a better patent system for the long-term. They understand how patents are actually used and the motivation behind patentee actions. Hopefully, this means that the eventual changes to the system will be more successful; have fewer unintended consequences; and be less likely to unduly antagonize those already invested in the system.

Barner was on my (rather long) short-list of potential Federal Circuit nominees to replace Judge Schall who is moving to Senior Status next week. Many members of the patent litigation bar are calling for a district court judge to be nominated. Judge Kathleen O’Malley (N.D. Ohio) likely tops the list along with Judge Patti Saris (D.Mass.).


Changing the USPTO Count System: Incrementally

Patent, ,

USPTO Director David Kappos has announced a set of proposed changes to the patent examiner count system. The proposed changes are not dramatic, but they may have some incremental benefit of reducing RCE churning (see below). The proposal also provides for an additional hour of examination time per case with the expectation that the added time will be used up-front in an interview or in preparing a quality first office action on the merits (FAOM).

The Count System: Under the current count system, examiners receive “counts” for various actions and must meet a certain quota every two-weeks. (The quota varies according to art unit and examiner grade.) Under the rules, one count is awarded when the examiner issues an initial office action rejection and a second count is awarded when the case is disposed-of. Because no counts are awarded for second or subsequent office action rejections, the current system is supposed to encourage examiners to quickly move a case to its conclusion.

RCE Churning: When an applicant files a request for continued examination (RCE), the examiner receives a count as a disposal. At that point, the current count system treats the application as new – thus the examiner can receive a second count for mailing another office action rejection and one more count for eventually allowing the application to issue as a patent. Thus, by “forcing” the RCE, the examiner receives four counts instead of only two. (Note – “Forcing” is in quotation marks because examiner’s do not actually applicants to file RCEs.) A similar practice takes place with restrictions where the examiner pushes an applicant to divide a single patent application into multiple applications. In that scenario, the examiner can at times earn multiple counts for reexamining what are essentially identical inventions.

The proposed package would make some modifications – focusing especially on RCE practice. Under the proposal, the first RCE would only be worth 1.75 total counts (rather than 2) and any subsequent RCE can only be worth 1.5 counts. Examination of the original application would still be worth the same 2 counts, but the distribution is slightly shifted. Under the proposal, the first office action on the merits (FAOM) would garner 1.25 counts; a final rejection earns 0.25 counts; and eventual disposal leads to 0.5 more counts. If no final rejection is issued, then the disposal would be worth 0.75 counts. Thus, examiners will still receive credit for examining RCE’s – just less credit than before. The proposal does not appear to address the restriction practice.

Encouraging substantive interviews: The proposal would also regularly grant one-hour of “non-examining time” for preparing for and conducting interviews. This would effectively reduce the examination quota of examiners who conduct interviews.

Examiner Mistakes: The PTO management appears to have come to an agreement with the examiner union POPA on these reforms, although the membership will still be asked for their approval. Interestingly, the documents distributed by the joint task force appears to show some changes on the review of examiners for mistakes in office actions. Notably, the proposal would not allow an examiner to be negatively treated “based upon a single clear error in Patentability Determination” even if the examiner has already received a warning for prior mistakes.

The proposal also includes a new “formal policy” of “working on the earliest filed applications on [an examiner’s] Regular New Case docket first.” This would block the game played by some examiners of cherry picking easier cases to examine earlier.   

Documents: briefing_for_corps_final_draft-093009.pdf

Claim Construction: A Structured Framework*

Articles and Publications, Patent, , , , ,

Guest post by Professor Peter S. Menell (UC-Berkeley School of Law); Matthew D. Powers (Weil, Gotshal & Manges LLP); and Steven C. Carlson (Fish & Richardson PC) 

The construction of patent claims plays a critical role in nearly every patent case. It is central to evaluation of infringement and validity, and can affect or determine the outcome of other significant issues such as unenforceability, enablement, and remedies. Yet jurists and scholars have long lamented the challenges of construing patent claim terms. The Federal Circuit’s en banc decision in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005), stands as the most authoritative decision on claim construction doctrine. But while putting to rest various controversies, many core tensions in claim construction persist. Moreover, the decision itself does not provide a step-by-step approach to construing claims. This commentary provides a structured road map.

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An Appeal to the New Patent Office Director: Repeal the Single Sentence Rule

Patent, ,

Guest Post by Stephen Schott of Volpe & Koenig 

[File Attachment: PDF Version of this Article (135 KB)]

Like all elementary school graduates, I learned that a single sentence should be short. One source suggests that a well-written work should average 20 to 25 word sentences.[1] With that as the guide, sentences averaging 50 words would raise the ire of a 3rd grade teacher. Those averaging 100 words would drive a sane person mad. And a 250 plus word sentence would drive even Proust to distraction.

 

But sentences of such prodigious lengths are commonplace in patent law. The offending sentences are patent claims.[2] These claims are a U.S. patent’s most important feature. It is here that the inventor, or more likely the inventor’s attorney, sets forth the “metes and bounds” that define the invention. The claims serve as property lines: Cross into those lines with your product and you infringe the patent.

 

With such importance placed on claims, you would expect them to be quite readable. You would at least expect them to have been the subject of the “plain English” movement, perhaps best summed up by Albert Einstein when discussing science: “Most of the fundamental ideas of science are essentially simple, and may, as a rule, be expressed in language comprehensible to everyone.” But the claims—despite the substantial time spent drafting and interpreting them—are not a place where the discerning reader finds linguistic respite.

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Kappos: Earn Accelerated Examination Rights by Abandoning Worthless Applications

Patent,

One portion of my prior post on PTO Director Kappos' speech at the IPO annual meeting seems to have created some confusion. In particular, many questioned how Kappos planned to implement a system of "easing the acceleration of valuable cases while creating mechanisms for the worthless cases to be more quickly abandoned without wasting resources."

Aligning with the Obama-Sunstein strategy of soft paternalism, Kappos does not suggest that the PTO should set any hard-line rules for determining value and worthlessness. Rather, Director Kappos is intent on introducing a system that provides applicants with an incentive of abandoning applications prior to the first office action by offering accelerated examination for a still pending application. The following is a quote from the printed version of the Kappos speech:

We are working on new programs to help cut pendency across the board, such as one that would allow an applicant to select an application to advance in the queue in exchange for each application they withdraw before substantive examination.

We hope this will benefit applicants who are abandoning applications without response to first office actions, while saving the office from unnecessarily examining applications that are no longer important to applicants.

I suspect that this approach will work to help applicants abandon their own applications that they see as worthless. Here, applications may be seen as worthless either because they cover worthless technology or because they are unlikely to be patentable. A potential problem with the program is that it creates the opportunity to file straw-man applications that are subsequently abandoned in order to accelerate examination. To avoid this, the rule should also allow applicants to simply pay the equivalent of the application fee in order to accelerate examination. The program would also be much more successful if it offered a refund of the search & examination fees when applicants abandon early.

It is unclear whether the right to an accelerated examination would be transferrable.

Perhaps the positive takeaway from this small part of Director Kappos' speech is that he is willing to explore wholly new approaches if they have some potential for improving the system.

Links:

USPTO Director Kappos Discusses USPTO 2010

Patent,

Director David Kappos today offered his first public speech directly to the intellectual property law community since taking office as Director. The 600+ patent attorneys in attendance at the Intellectual Property Owners Association (IPO) appeared cautiously hopeful.

Some highlights:

  1. Kappos intends to focus on process-focused reform in an attempt to drop pendency and increase examination effectiveness. In particular, Kappos suggested a reengineering of the USPTO examiner count system to better encourage compact prosecution; pre-first-office-action interviews as a mechanism to quickly focus on the important issues; easing the acceleration of valuable cases while creating mechanisms for the worthless cases to be more quickly abandoned without wasting resources. While waiting for broad reforms to take effect, Kappos also suggests mechanisms for shortening pendency for focused sectors of technology. As part of this, Kappos also suggested that plans at creating a “nationwide workforce” of patent examiners.
  2. Legislative patent reform is one of the “highest priorities” of both the USPTO and the Commerce Department. (Kappos did not develop the particular areas of reform).
  3. In the Q&A session, Kappos was asked about Tafas v. Dudas and its potential resolution. He joked that it might aptly be renamed Kappos v. Kappos based upon his history of opposing the rules package and his new role as PTO director. Despite his predilection against those particular reforms, Kappos may not have power to extricate the Government from its position.
  4. In the background, is the “big overhanging problem . . . funding.” Kappos reported an expected $200 million shortfall for FY2010. Leaving little money to make improvements or to even keep-up the “extremely fragile” information technology system.