In his recent essay [LINK], Professor John Duffy raises the shocking point that since 2000, the appointment process of BPAI Judges has been unconstitutional. Generally, administrative officers must be appointed by a cabinet level official. Under 35 U.S.C. 6, however, the PTO director appoints the board. This disconnect, created by the 1999 patent reform measures, creates a serious constitutional problem.
If Professor Duffy is right (1) the law must be changed; (2) recently appointed BPAI judges will need to be re-appointed in a proper manner; and (3) any pending BPAI appellant could raise the issue as a challenge to BPAI authority so long as the panel includes recently appointed judges.
The PTO’s accelerated examination program (formerly petition to make special) requires that the applicant conduct a prior art search and provide an extensive discussion of how the submitted prior art relates to each claim. As mentioned in earlier Patently-O posts, I expected that the program somewhat of a prototype — if all goes well, the PTO may require a preliminary search and discussion of prior art findings for all cases.
The future is here: The recently amended Senate Bill includes orders for the PTO Director to require search reports and patentability analyses for all filed applications (except for those filed by “micro-entities”). Failure to submit a report would result in abandonment. A new 35 U.S.C. Section 123 would read as follows:
“The Director shall, by regulation, require that applicants submit a search report and other information and analysis relevant to patentability. An application shall be regarded as abandoned if the applicant fails to submit the required search report, information, and analysis in the manner and within the time period prescribed by the Director. Applicants from micro-entities, as defined in section 124 of this title, shall not be subject to the requirements of any regulations promulgated pursuant to this section.”
In the past, IPO President Marc Adler has suggested on his blog that patentees should conduct pre-filing searches. [LINK]. Of course. Mr. Adler’s comments suggest only a voluntary system.
Notes:
Look for a salary increase for quality patent searchers.
PatentlyAcademic by an anonymous examiner going through the PTO’s training academy. I have no idea if it is true, but I consider this site something like the spawn of Patently-O.
PLI Blog by famed patent bar exam teachers White & Quinn
Patent Librarian by Canadian Michael White brings a fresh perspective.
As all patent prosecutors know, the PTO has proposed a set of rule changes that would limit the number of continuation applications that may be filed based on a given priority document. In addition, the proposed changes would also limit the number of claims to be examined in each application.
The final version of the proposed rules are not yet public, but are being reviewed by the Whitehouse before final implementation.
Three groups have now met with the OMB and complained about the rules [LINK].
Former PTO Director Bruce Lehman, now a lobbyist working for Akin Gump, joined forces with BIO to argue that the changes would create significant harm to small biotech companies. Materials Used: ChartMemo.
Derek Minihane (in-house at Intermolecular) and Jeffrey Birchak (in-house at Fallbrook Tech) presented on behalf of he innovation alliance — making the argument that “the proposed rules would impose hundreds of millions of dollars of additional costs on inventors and could destroy billions of dollars in property rights and business value.” Materials Used: MemoPresentation.
David Boundy (Cantor Fitz) and Mike Strickland (GlaxoSmithKline) also met with OMB officials to present the case against changes on behalf of a few dozen interested companies. Their documentation highlights what they see as illegal PTO actions leading-up to the new rules. [LINK]
Within the Whitehouse Office of Management and Budget (OMB), the Office of Information and Regulatory Affairs (OIRA) reviews final regulatory changes before implemented. Susan Dudley, OIRA director is expected to release a decision within three weeks.
Notes
Stanford Professor Mark Lemley’s article regarding continuations (coauthored with Judge Moore) was used as a justification for the PTO’s rule changes. Interestingly, the objectors cite another Lemley article (coauthored with Allison, Moore, and Trunkey) for the proposition that patents based on continuations are generally more valuable. The second article, titled “Valuable Patents” makes its conclusion by combining the observation that patents based on continuations are litigated more often with the assumption that litigated patents are, on average, more valuable than those that are not litigated.
The Lemley/Moore article is not overly concerned with the administrative trouble created by continuations. It does, however, point to four major problems created by extensive continuation practice:
First, at a minimum, continuation practice introduces substantial delay and uncertainty into the lives of a patentee’s competitors, who can never know whether a patent application is pending. Second, the structure of the PTO suggests that continuations may well succeed in “wearing down” the examiner, so that the applicant obtains a broad patent not because he deserves one but because the examiner has neither incentive nor will to hold out any longer. Third, continuation practice can be – and has been – used strategically to gain advantages over competitors by waiting to see what product the competitor will make and then drafting patent claims specifically designed to cover that product. Finally, some patentees have used continuation practice to delay the issuance of their patent precisely in order to surprise a mature industry, a process known as “submarine patenting.”
John Sullivan, GC of the Commerce Department, has written a letter to support [UPDATED] Patent Reform [but not H.R. 1908]. The Commerce Department suggests reforms that would require applicants to submit higher-quality patent applications. In reality, this can be translated as adding the submission requirements of accelerated examination to every case. That approach is likely quite costly for applicants. However, it is undeniable that patent quality is a two-way street. Low quality patent applications regularly lead to low quality patents. A head-in-the-sand approach will not work here. The patent community should come-together with a set of best-practices for patent application drafting that can be implemented as rules. These practices should include definitions for claim terms; a more helpful discussion of prior art; a date of invention. Done correctly, a few simple changes in the patent document could eliminate many of the current validity and claim construction issues that are so alive today. To be practicable for prosecuting attorneys, these reforms should be coupled with reform of the ‘rules’ of inequitable conduct, which are currently in a state of disarray. [Commerce Dept Letter].
The Commerce Dep’t letter opposed a number of particulars of currently proposed legislation, including first-to-file.
The House IP subcommittee has approved the language of H.R. 1908. It now goes to the full judiciary committee for a vote.
PTO Solicitor John Whealan has been seconded to the US Senate to iron-out the patent reform details. Stephen Walsh, a career PTO official, will reportedly Whealan’s shoes as Solicitor. Congratulations to both men!
A large number of biotech companies have also provided their statement regarding reform. The group opposes "apportionment of monetary damages for patent infringement, expansive PTO rule making authority, an open-ended post grant opposition system, and a narrow grace period." [Coalition letter]
Other TidBits:
Patently-O has taken-on its first advertising contract — Patent Supply Co. (See the left toolbar).
Etherton Law Group in Phoenix needs you (so long as you are a quick-witted patent attorney with a couple-years experience). [LINK]
At BIO2007, biotech business executives were asked to rate on a scale of 1-10, the most helpful actions that that the federal gov’t could take.
Price controls: 71% rated 8-10;
International harmonization of patent laws: 59% rated 8-10;
Increase funding for biomedical research: 59% rated 8-10;
Increase funding for biofeuls: 41% rated 8-10. (Survey by Peter D. Hart Research Associates).
Margaret J.A. Peterlin has been appointed as the deputy director of the USPTO — second-in-command behind director Jon Dudas. Like the Director, Ms. Peterlin is a University of Chicago Law School graduate and spent most of her legal career in the halls of Congress. The job of deputy director opened-up after Steve Pinkos left to return to Texas. Jon Dudas was the Deputy Director from 2002 to 2004 when his promotion came-through.
From the USPTO Press Release:
“Margaret is a tremendous asset to the USPTO. With an impressive track record of success across several disciplines, she has established herself as a proven leader, strategic legal thinker, and knowledgeable legislative tactician,” said Jon Dudas, Under Secretary of Commerce for Intellectual Property and Director of the USPTO. “Margaret will apply these skills to USPTO’s challenges, which she well understands from her time representing the leadership of the U.S. House of Representatives. Margaret’s leadership will be instrumental in the USPTO’s efforts to work with applicants to enhance the quality of their applications, process patents and trademarks in a timely manner, and operate in a way that motivates our employees and inspires our international partners.”
The role of deputy director is appointed by the “Secretary of Commerce, upon nomination by the Director . . . [and] shall be a citizen of the United States who has a professional background and experience in patent or trademark law.” 35 U.S.C. 3.
Ms. Peterlin’s full title will be: Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the Commerce Department’s United States Patent and Trademark Office.
In the wake of KSR v. Teleflec, Deputy Commissioner Peggy Focarino has submitted a memorandum to the technology center directors with preliminary examination guidance. The memo includes marching orders requiring that examiners continue to provide "reasons" for combining prior art in an obviousness rejection.
[I]n formulating a rejection under 35 U.S.C. 103(a) based upon a combination of prior art elements, it remains necessary to identify the reason why a person of ordinary skill in the art would have combined the prior art elements in the manner claimed.
In submitting the memo, Deputy Commissioner Focarino noted that the Supreme Court’s opinion requires explicit discussion:
To facilitate review, [the apparent reasons for combining prior art] should be made explicit.
In addition, the memo reminds us of the basics of Graham v. John Deere:
determining the scope and contents of the prior art;
ascertaining the differences between the prior art and the claims in issue;
resolving the level of ordinary skill in the pertinent art; and
By Professor Joshua Sarnoff, Assistant Director of the Glushko-Samuelson Intellectual Property Law Clinic and a Practitioner-in-Residence at the Washington College of Law, American University. Professor Sarnoff filed an amicus brief in support of Petitioner KSR.
In its unanimous decision in KSR Int’l. Co v. Teleflex Inc., No. 04-1350 (April 30, 2007), the Supreme Court expressly overruled the Court of Appeals for the Federal Circuit’s “teaching-suggestion-motivation” (“TSM”) test for finding a claimed invention obvious and reaffirmed the Court’s precedents (in light of the 1952 enactment of Section 103 and its holding in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966)) regarding the obviousness of patents “based on the combination of elements found in the prior art” where there the combination “does no more than yield predictable results.” Slip op. at 11-12. The Court’s decision has therefore called into question the validity of hundreds of thousands of claims in issued patents, and will likely lead to a dramatic change to the method by which the Patent Office, the courts, and the bar conduct their obviousness analyses.
Nevertheless, the Supreme Court’s opinion appears self-consciously narrow and provides little additional guidance for how to apply the Graham approach. The Court’s decision leaves unclear whether the party with the burden of proving obviousness must demonstrate that “there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue,” or only that the claim at issue if patented would reflect an “advance[] that would occur in the ordinary course without real innovation[, which] retards progress and may, in the case of patents combining previously known elements, deprive inventions of their value or utility.” Slip op. at 14, 15. As the Court noted, “as progress beginning from higher levels of achievement is expected in the normal course, the results of ordinary innovation are not the subject of exclusive rights under the patent laws. Were it otherwise patents might stifle, rather than promote, the progress of useful arts.” Slip op. at 24. Although the Court recited the Constitutional language, it did not expressly hold that obviousness is a constitutional requirement. Further, the Court left to later case law any consideration of the extent to which the Court of Appeals’ more recent statements regarding the flexibility of its TSM test is consistent with Graham and the Supreme Court’s earlier precedents. Slip op. at 18.
Hal Wegner has done the legwork to evidence the rumors. On April 10, 2007, the USPTO Submitted two sets of final rules to the Office of Management & Budget for regulatory review:
RIN: 0651-AB93: Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications Containing Patentably Indistinct Claims
RIN: 0651-AB94: Changes to Practice for the Examination of Claims in Patent Applications
Summer Implementation Likely: According to self-reports, Bush OMB has maintained a fairly strict adherence to a 90-day time-limit for review. Thus, barring unusual circumstances, publication of the rules can be expected in early July. Implementation would require a 30-day window following publication.
Get Involved: The Review Office has a policy "to meet with any party interested in discussing issues, whether they are from State or local governments, small business or other business or industry interests, or from the environmental, health or safety communities." In addition, third parties may submit written comments on any rule under review. [VIA FAX at (202) 395-3047 or 202-395-5806 or (202) 395-6566].
Earlier this month, Susan Dudley was named the new director of the Office of Information and Regulatory Affairs (OIRA) through a recess appointment. Her office is quite powerful because it "will have an opportunity to change or block all regulations proposed by government agencies."
Before an overflow hearing room on an internationally available web broadcast, Chairman Howard Berman of the House Judiciary Subcommittee relevant to patents hosted a most informative and candid hearing yesterday afternoon joined by roughly ten of his committee colleagues, including Rep. Dan Issa, undoubtedly the most patent-interested member of Congress in some time (and like Abraham Lincoln an inventor-user of the patent system).
Going into the hearing, the Chairman clearly recognized the total impasse from the last Congress over "second window" post-grant review and that the current legislation as introduced is dead in the water. Yet, the Chairman and the bipartisan participation manifested a determination to find a solution, best marked by the announcement of the intention of the Chairman to hold a markup hearing in May – which, coincidentally or not – will take place in all likelihood shortly after the KSR decision is reached by the Supreme Court, and possibly before the Supreme Court Microsoft decision.
The Public Perception of Patent Importance: Just a decade ago, a patent hearing would have drawn gaping yawns from the public with a smattering of a few Washington regulars and largely vacant seats, both for the members and the audience. Yesterday, eighty minutes before the hearing the attendants’ line stretched down the corridor with numerous ill-dressed folks lounging on the floor or in chairs ("seat holders" selling their places in line to corporate VP’s and lobbyists); those coming later had to sit in an overflow video-feed room; ten or so members of the subcommittee participated in the hearings, some showing significant insight. The press table was overflowing; the beat reporter for Reuters was unable to get a seat at the table. A former Chairman of the Subcommittee staff sat in the very last row of the audience, along with other pooh bahs.
The point? Patent reform is perceived by Congress as important; the presence of myriad lobbyists manifests the money that is being spent by industry to deal with reform. Patent reform legislation will continue center stage, whether it passes or not.
Potential Abuses of the "Second Window": Perhaps the single most constructive development that arose from the hearing was the focus upon the abuse of the current reexamination system that foreshadows similar problems under the proposed post-grant review system: Serial reexaminations and post-litigation reexaminations even after a final court decision have been unreasonable and made it impossible for the winner of a trial costing the parties millions of dollars to enjoy a quiet patent title: Even after winning at trial, reexaminations can be filed that may take many years to resolve, some just rehashing old issues lost at trial.
A Single, Joined Proceeding to Avoid "Second Window"Abuses: A possible solution that was not considered at the hearing; the subcommittee should consider a "one window" solution where a first-filing of a post-grant proceeding would result in a publication in the Official Gazette that would give the public a six month window to join in a single, one time only post-grant proceeding. Additionally, the filing of any patent litigation should also be noticed in the Official Gazette to similarly set a six month period to commence a post-grant proceeding: Failure to file within this period would forever shut the door to a post-grant proceeding to the extent that the litigation goes to a final decision on the merits. And, of course, after a final decision on the merits in patent litigation, no further post-grant proceeding should be permitted.
Rep. Issa’s "One Window" and Judge-Opened Window Proposals: Rep. Issa suggested that perhaps "one window" might be provided for a post-grant proceeding, one shot at a patent, no matter when that window would be. Another thought that was put on the table was the idea that there could be a restricted "first window" but that a trial court could later order reopening a "second window" by referring a case to the post-grant authority. This would have the great benefit to the public of providing a better assurance that a patent-experienced tribunal would consider patent validity. (Presumably, for the roughly ten of the ninety-four District Courts that already provide excellent patent justice in a timely fashion, judges would decline to exercise this option but retain patent validity issues for their own tribunals. But, for the more than eighty other District Courts where a typical judge may be hearing his or her first or second patent case, the option of opening the "second window" may be very attractive.)
KSR, Microsoft, eBay– Looming Shadows from the Supreme Court : The Subcommittee is keenly aware of the presence of the Supreme Court in the patent arena. There was open discussion of the relief that Congress felt with the eBay decision that judicially resolved an issue this past Term that had been a bottleneck to progress on patent reform last year. Several references were made to the absence of any remedy to remove 35 USC § 271(f) and the hope that perhaps there would be a judicial solution in the Microsoft case that would remove yet another contentious issue; it was particularly for the reason of the pendency of the Microsoft case that the current legislation lacks any provision to deal with 35 USC § 271(f) repeal.
The 800 pound gorilla that was not mentioned is the KSR case that in all likelihood will be decided before the May markup session. (The earliest date now that a decision could be forthcoming is this coming Monday when the court sits merely to deliver opinions. The Court has concluded all of its arguments for the October 2006 Term and is now regularly meeting on Mondays to hand down decisions, which will continue until the end of June.) To the extent that the KSR decision may represent a major disruption in the case law of obviousness, this will be a certain signal to the leaders of the patent community that there must be a post-grant solution to cull out invalid patents. The continued grant of "gas pedal" patents cannot be avoided; but, what must be avoided is the continuation of an absence of mechanisms to remove such patents from the rolls.
Witness Selection to Highlight the "Second Window" Impasse: While apportionment of damages in the legislation was also an important theme, it was clearly secondary to the issue of the "second window" for a post-grant review. The Chairman candidly announced that his subcommittee was focusing upon the differences between the industries. (Clearly, without resolution of the "second window" debate, there will be no comprehensive patent reform bill that can be enacted in this or any near term bill.) With this theme in mind, the Chairman noted the appearance of five witnesses:
(1) Kevin Sharer, Chairman and CEO of Amgen, accompanied by Vice-President David W. Beier, III, former Subcommittee Staff Chair , pointed to the necessity for (a) a more reliable post-grant procedure; and (b) the necessity of freedom from a "second window" for biotechnology.
The Sharer testimony and the silent but visible presence of Beier stole the show, both in terms of persuasiveness as well as for the special deference given by the Subcommittee to the Sharer-Beier entourage. Amgen was seeded first at the hearing and, pursuant to a special announcement by the Chairman at the outset, was given a preferred early set of questions to permit a Stage Right exit in the midst of the hearing, leaving the other witnesses at the table.
The Amgen testimony noted that a new biotechnology drug has a development cost running at the rate of $ 1.2 billion spread over a 15 year period. Amgen itself pours out $ 3.4 billion in research costs each year, 90 % of which advances science but represents false starts in terms of any commercial possibilities. Quiet patent title at an early date is an absolute requirement for such expenditures.
One Size Doesn’t Fit All: Quite clearly, the Amgen testimony, better than any representative for any of the various organizations, demonstrated the absolute, positive necessity the biotechnology community has for a highly reliable post-grant proceeding and one where there is early, quiet patent title ensured. Amgen persuasively explained the position of his company in a scenario that is echoed by all major pioneer pharma and biotech entities and manifests the futility of any attempt to ram through Congress a one-size-fits-all "second" window solution.
The Need for Independent PTO-FreePost-Grant Governance: The Amgen testimony implied a need for a very reliable post-grant system. While not a subject of the Congressional testimony yesterday, previous notes by this writer have suggested that as an imperative for any post-grant reform the proceedings must be divorced from the political control of the PTO. The BlackBerryGate and other long-running reexaminations manifest the necessity of this reform. It must be remembered that the 1980 original reexamination law could have been effective, including inter partes participation and including expedited consideration, all possible within the scope of the reexamination law and certainly within the budget of the PTO. The fact that the PTO today denies the "special dispatch" examination of a reexamination proceeding of importance speaks for itself. There is nothing to preclude a PTO-run post-grant review from similar political interference from the Director.
(2) Gary L. Griswold, 3M, for the 21st Century Patent Coalition spoke, as usual, strongly opposing any "second window" post-grant review and opposing other IT/EE initiatives. While the death of the current legislation is a certainty with or without the strident voice of the 21st Century Patent Coalition, the intransigence of the 21st Century Patent Coalition is perhaps the best indicator that no Phoenix can ever arise from the ashes of the current legislation.
Where is the AIPLA? The vast, overwhelming majority of the membership of the AIPLA favors reasonable patent reforms and can hardly be cast in the position of favoring the intransigent position taken by the 21st Century Patent Coalition. To say that the leadership of AIPLA is through an Executive Committee controlled by the common interests of the 21st Century Patent Coalition is difficult to dispute. (Oddly, AIPLA is the only bar association that is a member of this coalition, now just one of forty members of an otherwise industry coalition, "plus Patent Cafe", identified as a post-script to this note.)
IPO has disappeared: It was nowhere to be seen nor heard. [DDC: IPO Continues to be a Major Player in this Reform]
(3) Prof. John R. Thomas, Congress’ CRS in house researcher dismissed the post-grant legislation as "marginal". Rebutting those that portray the post-grant proceeding proposed by Congress as a "sea change", the professor said that the legislation would represent a "marginal change".
(4) William T. Tucker, California university system, stayed away from the "second window" debate, but uniquely focused upon a need to retain the "first inventor" system.
(5) Anthony Peterman, Dell Patent Counsel, expressed EE/IT views on the essential nature of the "second window" for his industry. Pointedly asked by the Chairman whether he understood the viewpoint of the biotech industry as expressed in the earlier testimony to avoid a late-stage "second window", Peterman agreed with the need to see whether a solution could be reached that would satisfy both sectors.
Notes:
The Coalition for 21st Century Patent Reform members include (per its announcement): "3M, Abbott Laboratories, Air Liquide, Air Products, AstraZeneca, Baxter Healthcare Corp., Beckman Coulter, Bridgestone Americas, Bristol-Myers Squibb, Cargill Incorporated, Caterpillar, Cephalon, CheckFree, Corning, Dow Chemical, Eastman Chemical, Electronics for Imaging, E.I. du Pont (DuPont), Eli Lilly, ExxonMobil, General Electric, Genzyme, GlaxoSmithKline, Henkel Corporation, Hoffman-La Roche, Johnson & Johnson, Merck, Millennium Pharmaceuticals, Monsanto, Motorola, Novartis, Patent Cafe.com Inc., Pfizer, Procter & Gamble, Sangamo BioSciences, Texas Instruments, UnitedTechnologies, Weyerhaeuser, Wyeth, and AIPLA."
On April 18, 2007, bipartisan legislators in both the Senate and House of Representatives introduced sweeping patent reform measures in legislation termed the Patent Reform Act of 2007. The reform measures include the following provisions:
First-to-file rights and elimination of interference proceedings;
Reform to make it easier to file a patent application without the inventor’s cooperation;
Limitation of damages to only the economic value of the improvement as compared to the prior-art;
Specific limitations on when damages may be trebled for willfulness;
Post-grant opposition proceedings and a reduction in the litigation estoppel effect of reexaminations;
Limitations on patent venue;
Authority to the PTO director to create further regulations.
Although couched in terms of the importance of patents and patent quality. The thrust of many of the measures are clearly directed at “limiting litigation abuses.” The two versions (Senate and House) are appear virtually identical in substance.
Analysis:
Inter Partes Reexamination: Many patent litigators have warned clients against filing inter partes reexamination requests because of the litigation estoppel created by by 35 USC 315(c). That provision estopps later validity challenges on grounds that a third party “raised or could have raised” during the reexamination. The Patent Reform Act would limit the estoppel to only issues actually raised — striking the “could have raised” language.
The Senate version was introduced by Senators Leahy, Hatch, Schumar, and Cornyn
The House version was introduced by Representatives Berman, Smith, Conyers, Coble, Boucher, Godlatte, Zoe Lofgren, Issa, Schiff, Cannon, and Jackson-Lee
www.ipo.org (Industry group — Formerly supported strong IP rights — now a consensus builder — noting that “the battle-of-the-industries description of patent reform is simplistic and sensationalist.”)
I would like to publish a couple of well written editorials on patent reform within the next two weeks. Feel free to submit yours to dcrouch@gmail.com.
On April 18, 2007, bipartisan legislators in both the Senate and House of Representatives introduced sweeping patent reform measures in legislation termed the Patent Reform Act of 2007. The reform measures include the following provisions:
First-to-file rights and elimination of interference proceedings;
Reform to make it easier to file a patent application without the inventor’s cooperation;
Limitation of damages to only the economic value of the improvement as compared to the prior-art;
Specific limitations on when damages may be trebled for willfulness;
Post-grant opposition proceedings with a reduction in the litigation estoppel effect;
Limitations on patent venue;
Authority to the PTO director to create further regulations.
Although couched in terms of the importance of patents and patent quality. The thrust of many of the measures are clearly directed at “limiting litigation abuses.” Although a detailed analysis has not been completed, the two versions appear virtually identical.
The Senate version was introduced by Senators Leahy, Hatch, Schumar, and Cornyn
The House version was introduced by Representatives Berman, Smith, Conyers, Coble, Boucher, Godlatte, Zoe Lofgren, Issa, Schiff, Cannon, and Jackson-Lee
Patently-O plans to publish a couple of well written editorials on patent reform within the next two weeks. Feel free to submit yours to dcrouch@gmail.com.
The following synopsis comes from noted patent attorney Charles Van Horn:
USPTO Commissioner for Patents John Doll announced today at a DC Bar meeting that the final rules on continuation and designated claims practices are at OMB (Office of Management and Budget) for approval. The final rules were logged in on April 10 and OMB is expected to complete its review in 90 days, but frequently grants itself an extension of time. The final IDS rules were said to be on the desk of Director Dudas for approval, and will follow the other two packages to OMB in due course. So at this point in time, July-August would be an approximation for publication of the final rules, with 30 days (based on previous PTO statements) to implementation. No details of the final rules were disclosed.
Context: The PTO has proposed dramatically limiting the number of allowed continuation applications (including continuations, continuations-in-part, and requests for continued examination) and the number of claims pursued in each patent. These proposals have drawn ire from the patent bar.
The USPTO today released a proposed rewrite of how patent attorneys and agents may represent others before the PTO.
Role of a Patent Practitioner: The new rules broadly define the meaning of “practice before the Office” to include patent preparation & prosecution, providing advice regarding patents vs. other protections, and handling petitions & appeals within the PTO. Proposed 37 CFR 11.5.
Missing from the enumerated roles are activities incident to the preparation and prosecution of patent applications. The notes accompanying the proposal spell out that these incidental roles “are no longer included in the definition” of PTO practice. The primary incidental activity is the drafting of assignments and licenses.
According to the proposal, “a registered patent agent is not authorized by his or her registration to practice before the Office to draw up a contract or to select contract forms for a client relating to a patent, such as an assignment or a license.” The PTO is unsure whether merely ‘causing an assignment to be executed’ might be appropriate and asks for comment.
Attorneys Implicated As Well: As Russ Krajec pointed-out earlier [link], this reading of the rules would potentially impact patent attorneys as well since many represent a large number of out-of-state clients. (Are you practicing New York law when you advise your New York client about an assignment from its New York employee that will be interpreted under New York laws? Are you a licensed attorney in New York?)
Role of Foreign Drafters: “Nothing in this section proscribes a practitioner from employing non-practitioner assistants under the supervision of the practitioner to assist the practitioner in preparation of said presentations.” According to the notes, allowed activities include patent drafting.
What is Missing: The new rules leave out (1) any CLE suggestions as well as (2) any thought of an ethical duty to ensure access to legal representation (i.e., pro bono). I’m not a fan of mandates, but the patent bar (both attorneys and agents) is lacking in both of these areas. (You should note that the rules package is fairly comprehensive and covers many other details of practice in addition to those mentioned above.)
I would like to hear comments on (1) how attorneys and agents deal with state-representation issues; (2) has the idea of a nationwide practice became the de facto rule; (3) are bar associations too compliant with this activity; (4) are there examples of attorneys being disciplined for out-of-court activities in states where they have no clients?
Notes & Docs:
Any comments are due by May 29, 2007 and should be e-mailed to Harry Moatz: ethicsrules.comments@uspto.gov. (Mr. Moatz is the director of the OED). The PTO wants to find a good solution here.
For those of you with a memory, these proposed changes are a revision of the December 2003 proposal based on the 100+ comments received from the public.
If you leave an anonymous comment, please use a fake email address — otherwise we can see who you are. . .
As an avid tennis player, love means nothing to me. However, this Valentine’s Day appears to be the perfect opportunity to profile the USPTO’s newly appointed Chief of Patent Examination Policy, Deputy Commissioner John J. Love. Commissioner Love has always been quite responsive to requests for information and explanation. Unfortunately, this reporter failed to contact Love for this report. . .
Rumors are that the Deputy Commissioner is difficult to sway, but that you will at least know where you stand. Previously, as the head of the business method technology center, Love was a leader who helped institute the ‘second pair of eyes’ review and other quality initiatives. As we have seen, those quality initiatives are thought to have increased patent quality while decreasing the allowance rate.
As the Deputy Commissioner for Policy, Love is part of the high-level PTO management that includes PTO Director Jon Dudas, Deputy Director Pinkos, Commissioner John Doll, and Deputy Commissioner for Operations Peggy Focarino [LINK].
Valentine’s day 2006 saw the issuance of US Patent No. 7,000,000, a “Polysaccharide Fiber”. On Febuary 13, 2007, the number was up to 7,178,112. The ‘112 patent belongs to MathWorks and involves software for managing block diagrams.
Senior Administrative Patent Judge McKelvey authored an opinion on January 12, 2007, joined by Chief Administrative Patent Judge Fleming and Administrative Patent Judges Schafer, Hanlon, Lane and Tierney. The expanded panel addressed part of a Motion to Exclude Evidence filed by senior party Lan in Pevarello v. Lan, Patent Interference No. 105,394 (January 12, 2007), wherein party Lan sought the exclusion of evidence based on alleged violations of the Cross Examination Guidelines during a deposition. The panel did not rule on the admissibility issues, but took the “opportunity to address practice under the Guidelines” as well as address permissible deposition testimony relating to the creation and execution of direct testimony affidavits. Pevarello, at p. 2.
In interference proceedings, depositions are largely limited to the “cross-examination” of a witness who has given written affidavit evidence in support of a motion. The Trial Section adopted Guidelines to govern the cross-examination of witnesses, included as an appendix to the Standing Order of January 3, 2006. See Appendix: Cross Examination Guidelines. The Guidelines were modeled after Hall v. Clifton Precision, 150 F.R.D. 525 (E.D. Pa. 1993), and the Board invited the bar to review that decision to answer questions that may arise with respect to deposition practice in interference proceedings.
It is not likely that the attorneys here were the only ones to have ever violated the Guidelines; if that were the case, the Board would not have felt the need for such an expanded discussion. Presumably, the Trial Procedures Section of the Trial Division of the Board wanted to make clear that it was dead serious about the Cross Examination Guidelines and saw this case as a textbook example of the sort of behavior it would like to discourage. Expanding the merits panel by the addition of Judges McKelvey and Schaffer, judges of long experience in inter partes matters, and the addition of Chief Judge Fleming, was clearly designed to send a message that the Guidelines are Board policy in interference proceedings before the Trial Procedures Section of the Trial Division of the Board. Applying the Guidelines to the case at hand, the Board emphasized the following practice points, with the aim toward re-establishing more decorum and control during a deposition.
Practice Points:
Blanket objections waive the objection: An attorney lodging an objection during a deposition must state the legal basis for the objection. “Motions to exclude based on blanket objections [a naked objection] will not be considered because blanket objections during a deposition fail to comply with Guideline [3].” Pevarello, at p. 7. The legal basis for an objection, moreover, “must be found in the rules governing admissibility of evidence for contested patent cases, including the Federal Rules of Evidence.” Id. at p. 6. The Board determined that the parties’ stipulation to the contrary (the parties agreed that failing to state the basis for an objection would not waive the objection) abrogated Guideline 3 and was, thus, not proper.
Failing to object waives objection; objection as to the “form” of question is improper: The parties also stipulated that “all objections are reserved until the time of trial, except those objections that are directed to the form of the question.” The Board made clear that failing to object during a deposition acted as a waiver of the objection, noting that in interference proceedings, there is no subsequent “trial.” Pevarello at p. 18. The Board further concluded that, in patent interference cases, counsel may not object to a question based on the “form” of such question. The Board concluded that “form” objections are not sanctioned by the Federal Rules of Evidence and, thus, are improper in patent interference proceedings. Id. at p. 18.
Limit exchanges between counsel – call the Board instead: Throughout the opinion, the Board cited many examples of, and admonished both attorneys for, debating the merits of an objection on the record. The Board stressed that the objection and its legal basis must be stated in a “non-argumentative and non-suggestive manner”. Pevarello, p. 5. Should counsel continue to disagree regarding objections, particularly with respect to whether a certain line of questioning is proper, the Board invited counsel to call the administrative patent judge to resolve the dispute in real time. Id. at p. 19.
Defending attorneys should not ask for clarification of a question or an answer: The Board criticized defending counsel for seeking clarification, on behalf of the witness, of a question, stating that this practice contravenes Guideline 1 (“At the beginning of a cross-examination, the party conducting the cross-examination may instruct the witness on the record to ask deposing counsel … for clarifications… See ¶ Guideline [1], Appendix to Standing Order, p. 71). The Board placed the burden of seeking clarification of a question squarely on the testifying witness, indicating that the Board found no legal basis for objecting to a question as “ambiguous, not clear or vague.” Id. at p. 10. The Board further admonished defending counsel not to attempt to “clarify” the witnesses’ testimony, as that amounts to the “lawyer [taking] over control of the case from the Board.” Id. at p. 14. Thus, the defending attorney should not restate or question the witnesses’ testimony under the guise of an objection or correcting the record.
Prepare your witness before the deposition — not during the deposition: The Board strongly discouraged comments made by the defending attorney that could be perceived as “coaching” the witness to give (or stop giving) certain testimony. This not only violates Guideline 3 (“Counsel must not make objections or statements that even remotely suggest an answer to a witness.” See ¶ Guideline [3], Appendix to Standing Order, p. 72), but also the “decorum rule” of 37 CFR §41.1(c) (2006) (“Decorum. Each party must act with courtesy and decorum all proceedings before the Board, including interactions with other parties.”) The Board demonstrated a lack of tolerance for these antics, determining that the following remark made by counsel during the Witnesses’ answer: “‘I’m going to object because there’s no question pending’ translated into plain English means ‘Do not say anything more.’” Id. at p. 15. The Board also criticized counsel for coaching the witness when he objected to a question based on misstating the witnesses’ prior testimony. The Board placed the burden of pointing out misstatements on the witness and indicated that the proper time for the defending attorney to clarify the witnesses’ testimony is on re-direct. Id. at p. 17.
Avoid questions regarding the preparation of declarations: The Board then turned to a separate, but related, topic regarding appropriate/inappropriate lines of questioning regarding the preparation of an affidavit or declaration. According to the Board, attorneys should not question the witness regarding the mechanics of preparing the declaration, absent some compelling reason. Id. at p. 23. Thus, attorneys should refrain from asking who drafted the declaration (whether it was counsel or the witness), whether there were prior inconsistent drafts or whether there were discussions between counsel and the witness. The Board, recognizing that its position conflicts with the majority interpretation of Rule 26(a)(2) of the Federal Rules of Civil Procedure, supported its decision with reasons given in the August 2006 American Bar Association report that advocates amending Rule 26 to limit expert discovery. The Board also noted that the Federal Rules of Civil Procedure do not apply in interference cases before the Board. The deposition of a witness should focus on the merits of the declaration, including: (i) The witnesses’ credentials; (ii) The invention; (iii) Relevant prior art; (iv) The basis for facts and opinions; and (v) Facts/issues relating to conception, diligence and reduction to practice. Id. at p. 22.
The panel hearing the interference (Administrative Patent Judges Hanlon, Lane and Tierney) will now, in view of the opinion, rule on Lan’s Motion to Exclude the Evidence. Failing to follow the Cross Examination Guidelines risks the imposition of sanctions under 37 CFR § 41.158, as noted in the Standing Order, ¶ 128. The potential sanctions under § 41.158 can be serious, and include entry of: (1) An order holding certain facts to have been established in the proceeding; (2) An order expunging, or precluding a party from filing, a paper; (3) An order precluding a party from presenting or contesting a particular issue; (4) An order precluding a party from requesting, obtaining, or opposing discovery; (5) An order excluding evidence; (6) An order awarding compensatory expenses, including attorney fees; (7) An order requiring terminal disclaimer of patent term; or (8) Judgment in the contested case.
Note: Judge Bruce Stoner spent seventeen years hearing patent appeals, including eight years as Chief Judge of the BPAI. In 2003 he joined the Greenblum & Bernstein firm. Jill Browning is a partner at the same firm and a director of the APLF.
Beth Noveck recently published her most recent paper on Peer-to-Patent in the Harvard Journal of Law & Technology. As some of you know, Professor Noveck is on a mission to create a community-based open review system to assist patent examiners in determining whether an invention is patentable.
We know from several studies as well as anecdotal evidence that plenty patents are issued covering obvious ideas. It is hard work to find and sift-through prior art — not to mention the difficult task of comparing it to a patentee’s claimed invention. Obvious patents make the patent system look bad and drag-down the system.
One oft proposed quality promotion solution is to increase fees at the PTO and use the money to give Examiners more time to spend examining. This is a defensible answer, but it could end-up significantly increasing the cost of patenting.
Professor Noveck’s approach is to step outside the regulatory box and allow people in the community to review pending patent applications and provide relevant prior art. Prior art can be ranked and discussed through an electronic exchange entirely outside of the PTO. The results can then be submitted to the Examiner for review. At best, an Examiner may receive a ranked list of ten references with indications of how relevant portion of the reference read upon various claims.
Receiving a packet of relevant info from the Peer-to-Patent group is intended to make the Examiner’s job of weeding easier, but it will only work if there is a real community of techno-experts willing to put in time to prevent patent applications from issuing. Here, we can rely at least partially upon a competitive spirit — no one wants a competitor’s patent to issue, and the Peer-to-Patent approach provides a straightforward method to ensure that your path is not blocked. Several companies, including IBM and Microsoft have agreed to donate corporate time to assisting with the system.
I’m intrigued with the approach. I think it is a fresh idea with some real potential—and have agreed to serve on the board of directors. One way or the other, the proof will come this Spring when the pilot is expected to begin.
The Intellectual Property Owner’s Association (IPO) has taken a new stand on patent reform through its passage of three specific resolutions in reaction to the pending Senate bill S.3818 that had been supported by Senators Hatch and Leahy. Resolutions:
(1) supporting a requirement that a court award attorney fees to the winning party in most patent cases; [fees “shall” be awarded unless the losing position was “substantially justified”or if the award would be unjust because of special circumstances].
(2) opposing any change to give substantive rule-making authority to the USPTO; and
(3) opposing any right for an interlocutory appeal from claim construction decisions in patent litigation.
A legal thriller about copyright law? And not even about trial, but about rights clearance in order to get errors and omissions insurance? Not likely. But my colleague Paul Goldstein‘s new novel, "Errors and Omissions," grabs your attention from the first page and never lets it go. He manages to work murder, chases, love, McCarthyism, the Hollywood blacklist, and a trip to Europe into the otherwise mundane life of a down-on-his-luck copyright lawyer. Along the way, he keeps us entertained with a quick and enjoyable read.
I am reliably informed that Paul’s next novel will be a thriller about patent law, featuring a Markman hearing. Talk about raising the bar . . .
In October 2005, I discussed the district court case involving Medrad. In that case, the district court held that a Section 251 Reissue can only be used to correct an error in the specification, drawings or claims and cannot be used to correct a procedural error that is not reflected in the patent grant itself. During prosecution, the patentee had filed a second reissue to correct a mistake made during the prosecution of the first reissue. (The patentee failed to file a supplemental reissue declaration in compliance with PTO Rule 1.175). The lower court found that correction of that mistake did not fall within the guidelines of Section 251.
On appeal the CAFC sided with the patentee by giving a broad meaning to the statutory phrase “[invalid] by reason of the patentee claiming more or less than he had a right to claim in the patent.” In particular, the unanimous appellate panel found that the phrase does not literally mean “claim more or less” but rather that the phrase “encompass[es] any error that causes a patentee to claim more or less than he had a right to claim.” Thus, a reissue can apparently be filed based on any error that would result in invalid claims.
Notes:
35 USC 251 reads as follows:
Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue.
In his recent essay [LINK], Professor John Duffy raises the shocking point that since 2000, the appointment process of BPAI Judges has been unconstitutional. Generally, administrative officers must be appointed by a cabinet level official. Under 35 U.S.C. 6, however, the PTO director appoints the board. This disconnect, created by the 1999 patent reform measures, creates a serious constitutional problem. 
John Sullivan, GC of the Commerce Department, has written a letter to support [UPDATED] Patent Reform [but not H.R. 1908]. The Commerce Department suggests reforms that would require applicants to submit higher-quality patent applications. In reality, this can be translated as adding the submission requirements of accelerated examination to every case. That approach is likely quite costly for applicants. However, it is undeniable that patent quality is a two-way street. Low quality patent applications regularly lead to low quality patents. A head-in-the-sand approach will not work here. The patent community should come-together with a set of best-practices for patent application drafting that can be implemented as rules. These practices should include definitions for claim terms; a more helpful discussion of prior art; a date of invention. Done correctly, a few simple changes in the patent document could eliminate many of the current validity and claim construction issues that are so alive today. To be practicable for prosecuting attorneys, these reforms should be coupled with reform of the ‘rules’ of inequitable conduct, which are currently in a state of disarray. [
By 
Beth Noveck recently published her most recent 
Medrad v. Tyco (