Wednesday, August 2, 2017

PTAB - Athena Automation Ltd v. Husky Injection Molding System Ltd.- Assignor Estoppel Cannot Prevent Inter Partes Review

In Athena Automation Ltd v. Husky Injection Molding System Ltd., the Patent Trial and Appeal Board (PTAB) held that assignor estoppel does not prevent anyone who is not the patent owner from filing a petition for inter partes review to challenge patent validity.

With regard to assignor estoppel, PTAB reasoned:

"The only argument that Husky asserts in its Preliminary Response is that Athena is barred from bringing this Petition by the doctrine of assignor estoppel. Prelim. Resp. 1. Husky contends that Mr. Robert Schad, one of the named inventors of the ’536 Patent, is the founder, co-owner, President, Chief Executive Officer, and one of two directors on the Board of Directors of Petitioner Athena and is, therefore, in privity with Athena. Id. Thus, according to Husky, Athena is estopped from challenging the patentability of the ’536 Patent under the doctrine of assignor estoppel. Id.

The Federal Circuit has explained, [A]ssignor estoppel is an equitable doctrine that prohibits an assignor of a patent or patent application, or one in privity with him, from attacking the validity of that patent when he is sued for infringement by the assignee. . . . Assignor estoppel is thus a defense to certain claims of patent infringement. Semiconductor Energy Laboratory Co., Ltd. v. Nagata, 706 F.3d 1365, 1369 (Fed. Cir. 2013) (emphasis added) (citations omitted).

Under the AIA, “a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent.” 35 U.S.C. § 311(a) (emphasis added). Consequently, under the statute, an assignor of a patent, who is no longer an owner of the patent at the time of filing, may file a petition requesting inter partes review. This statute presents a clear expression of Congress’s broad grant of the ability to challenge the patentability of patents through inter partes review.

In contrast to § 311(a), in International Trade Commission (ITC) investigations involving patent disputes brought under 19 U.S.C. § 1337(c), Congress provided explicitly that “[a]ll legal and equitable defenses may be presented in all cases.” From this statutory mandate, the ITC concluded that it must consider the defense of assignor estoppel in cases in which a patent owner may seek to have infringing goods excluded from the United States. See Lannom Mfg. Co. v. Int’l Trade Comm’n, 799 F.2d 1572, 1579 (Fed. Cir. 1986).

Congress issued no similar statutory mandate to the Office in connection with AIA post-grant reviews. Husky concedes that the Patent Office does not apply assignor estoppel in reexamination proceedings, but argues that assignor estoppel should be available to patent owners in inter partes review proceedings based on the adjudicative nature of the proceedings. Prelim. Resp. 15-25. However, none of Husky’s arguments addresses the language of § 311(a). Because we are not persuaded that assignor estoppel, an equitable doctrine, provides an exception to the statutory mandate that any person who is not the owner of a patent may file a petition for an inter partes review, we decline to deny this Petition based on the doctrine of assignor estoppel."

Copyright © 2017 Robert Moll. All rights reserved.

Monday, July 31, 2017

USPTO - Patent Eligible Subject Matter: Report on Views and Recommendations from the Public

The USPTO's Report: Patent Eligible Subject Matter: Report on Views and Recommendations from the Public.

Patent eligibility for software and life science has been a controversial issue for decades. And it has not resolved itself despite a set of US Supreme Court's decisions seeking to clarify the patent eligibility standard. The USPTO has issued memos after each decision with guidelines that tend to befuddle applicants and examiners. So this 69 page report appears to restate the support (pages 23-27) and critical views (pages 27-33) rather than a solution. Sure Congress can amend the patent eligibility standard, but the money at stake will always drive the new standard into controversy.
Copyright © 2017 Robert Moll. All rights reserved.

Thursday, May 25, 2017

Professor Stephen Haber - Patents and Wealth of Nations

Tonight, I recommend reading Professor Stephen Haber's article Patents and Wealth of Nations. This article debunks the myth that the US economy is harmed by patents. I haven't read the entire article, but whatever I read made sense and was interesting. For example, please check out this passage addressing Bessen and Meurer's misleading claim that PAE's resulted in a $29B tax on innovation:

"There is also no convincing evidence that PAEs negatively affect innovation. Professors Schwartz and Kesan, for example, analyze the data and methods employed by Bessen and Meurer to produce the widely cited claim that in 2011 PAEs generated a direct tax on innovation of $29 billion.

Their analysis effectively undermines the Bessen-Meurer claim. Kesan and Schwartz point out that the Bessen-Meurer estimate is generated from a survey of eighty-two business enterprises regarding their experiences with PAE litigation, but those firms were neither randomly selected nor chosen so as to generate a representative sample. Rather, Bessen and Meurer relied on a survey sent to “‘about 250 companies,’ which include ‘RPX clients and nonclient companies with whom RPX has relationships.’” RPX is a business enterprise that describes itself as a defensive patent aggregator. There are therefore multiple reasons to be concerned about sample selection bias.

Kesan and Schwartz also demonstrate that Bessen and Meurer conflate “costs” with “transfers.” Slightly less than one-quarter of their $29 billion figure ($6.7 billion) represents actual litigation costs; the vast majority of the $29 billion is composed of settlement, licensing, and judgment amounts, which are the rewards that patent holders should have received for their intellectual property in the absence of infringement.

Kesan and Schwartz also point out that Bessen and Meurer do not ask whether the $6.7 billion in litigation costs is a large number in relation to some benchmark. They ask how $6.7 billion compares to the amounts spent by operating companies that regularly sue each other for patent infringement (e.g., cases such as Apple v Samsung). We would point out deadweight losses are usually assessed as a percentage of GDP, and on that basis the $6.7 billion in PAE litigation costs in 2011 amounted to only 0.05 percent of America’s $15.5 trillion national product. To put this in context, $6.9 billion was the amount Americans spent in 2015 on Halloween.

Finally, Kesan and Schwartz note that any analysis of costs must be balanced by an analysis of benefits, but these are ignored by Bessen and Meurer. Recall here the history of the laser. The initial patents generated lengthy and costly litigation financed by a PAE. But who would maintain that those costs represented a deadweight loss to the U.S. economy in light of the hundreds of billions of dollars generated by the commercialization of laser-based products over the past five decades?"

Copyright © 2017 Robert Moll. All rights reserved.

Tuesday, May 16, 2017

PWC - 2017 Patent Litigation Study - Change on the Horizon?

Tonight, I recommend reading Price Waterhouse Cooper's 2017 Patent Litigation Study - Change on the Horizon? Here are few findings of the PWC study with my comments:
  1. In 2016, US patent cases dropped 9% from 2015. Thus, we continue the downward trend in patent cases filed from 2013. Lobbyists pushing the "out of control patent litigation button" to persuade Congress to pass more anti-patent reform may have a credibility issue.
  2. Patent owners saw a 74% success rate in jury trials and 52% success rate in bench trials in 2016. This rate of success at trial was surprising, but is a subset of patent owners that overcame pre-trial motions, summary judgment and challenges in AIA trials.
  3. The median damage award of $10.2M in 2015 has decreased to $6.1M in 2016.
  4. The median jury award was 15 times greater than median bench awards in last five years. Give that fact, I am not sure why any patent owner wouldn't request a jury trial.
  5. Jury trials to bench trials have increased from 75/25 in 2015 to 80/20 in 2016. The report states the increase in jury trials is due to their larger awards and success rates.
  6. Medical devices and telecommunications median awards are significantly higher than other technologies such as consumer products. 
  7. Top five districts for patent cases filed: ED Texas, Delaware, Northern District of California, Illinois Northern, and New York Southern.
  8. Damage awards for non-practicing entities (NPEs) are 3.8 times greater than for practicing entities. This is surprising given the negative press about "patent trolls" that should undermine a jury damage awards to NPEs.
The PWC study is based on the Lexis Advanced database and 2,446 district court decisions since 1997.

Copyright © 2017 Robert Moll. All rights reserved.

Friday, May 12, 2017

AIPLA - Proposes Legislative Amendment to Subject Matter Eligibility Test Under 35 USC 101

The US Supreme Court's decisions in Alice and Mayo have generated considerable uncertainty and confusion on what subject matter is patent eligible since 2014. Although the Federal Circuit somewhat clarified the subject matter eligibility test in 2016, the current test is still too uncertain. It makes no distinction between the separate requirements set forth in 35 USC 101 (subject matter eligibility), 35 USC 102 (novelty and statutory bars), and 35 USC 103 (obviousness). For example, without rigorous comparison to the prior art, decision makers are free to speculate on whether the claim has an "inventive step." Note "inventive step" is an European patent term for what we refer to as non-obviousness in the US. All statutory sections come into play in unpredictable ways in the Alice/Mayo subject matter eligibility test. Yet Judge Rich a primary architect of US patent law of 1952, cautioned that 35 USC 101, 102, and 103 are independent requirements in determining patentability. Unfortunately, the wisdom of this insight appears to be lost.

Thus, courts now talk about whether the claim is an abstract idea based on how they viewed prior subject matter eligibility cases. Yet any patent lawyer knows each patent case has it own facts so it is hard to know the outcome of subject matter eligibility. Sometimes it is eligible and sometimes not. The Supreme Court's unwillingness to define what is an abstract idea in so called step one invites decision-makers to exercise their opinion without much if any limit. Those attacking validity of the patent argue the abstract idea of any claim is a high level idea that none of us would be happy to see patented. Former Federal Circuit Judge Markey told us reducing a claim to the "gist of the invention" is legal error! Now it is the first step of Alice. What happened to the rule the claim determines the scope of the invention. To let each defendant rewrite a carefully drafted detailed claim to its gist clears the way for straw man arguments. Anyway, after step one the decision maker continues to opine on whether the claim limitations he or she read out of the claim constitute "significantly more" than the abstract idea. To put it bluntly 35 USC 101 subject matter eligibility is what the decision-maker decides.

As people especially those with novel and nonobvious software related inventions have grown impatient with the unworkable nature of this uncertain confusing legal test, the largest organization of patent attorneys, that is, the American Intellectual Property Law Association (AIPLA) has stepped in and announced a reasonable legislative proposal for amending 35 U.S.C. §101 to address the confusion and uncertainty in patent ineligibility.

Here's the AIPLA announcement verbatim:

The AIPLA proposal preserves most of the language of the current Section 101, but replaces the judicial exceptions to eligibility with a new framework that uses clearly defined statutory exceptions. It is intended to provide a clear and objective test for eligibility and to expressly reaffirm the gatekeeping conditions of patentability in Sections 102, 103, and 112. The AIPLA Board of Directors approved the following resolution:

RESOLVED that the American Intellectual Property Law Association (AIPLA) favors, in principle, amending 35 U.S.C. § 101 to recite the following:

35 U.S.C. § 101—Inventions Patentable

(a) Eligible Subject Matter.—Whoever invents or discovers any useful process, machine, manufacture, composition of matter, or any useful improvement thereof, shall be entitled to a patent therefor, subject only to the conditions and requirements set forth in this title.

(b) Sole Exceptions to Subject Matter Eligibility.—A claimed invention is ineligible under subsection (a) only if the claimed invention as a whole exists in nature independent of and prior to any human activity, or can be performed solely in the human mind.

(c) Sole Eligibility Standard.—The eligibility of a claimed invention under subsections (a) and (b) shall be determined without regard to the requirements or conditions of sections 102, 103, and 112 of this title, the manner in which the claimed invention was made or discovered, or whether the claimed invention includes an inventive concept.

The Legislative Proposal derives from the work of the AIPLA Patent Eligible Subject Matter Task Force, which spent over two years considering the current state of the law and a wide variety of alternative solutions. It concluded that the Supreme Court can no longer be expected to remedy the confusion and uncertainty that its rulings have created among the courts, the USPTO, and inventors.

To read the AIPLA Legislative Proposal and Report on Patent Eligible Subject Matter, click here."

Copyright © 2017 Robert Moll. All rights reserved.

Tuesday, March 14, 2017

Tech Crunch - Yahoo’s 4K Excalibur patents in search, mobile, cloud and more valued at $740M

Tech Crunch reports Yahoo’s 4K Excalibur patents in search, mobile, cloud and more valued at $740M.

Yahoo's SEC 8-K has many details including the following summary:

"Patent Sale and License Agreement

During 2014, Yahoo Operating Business entered into a patent sale and license agreement for total cash consideration of $460 million. The total consideration was allocated based on the estimated relative fair value of each of the elements of the agreement: $61 million was allocated to the sale of patents (“Sold Patents”), $135 million to the license to existing patents (“Existing Patents”) and $264 million to the license of patents developed or acquired in the five years following the date Yahoo Operating Business entered into such agreement (“Capture Period Patents”).

The amounts allocated to the license of the Existing Patents are being recorded as revenue over the four-year payment period under the license when payments are due. The amounts allocated to the Capture Period Patents are being recorded as revenue over the five-year capture period.

Yahoo Operating Business recognized $86 million in revenue related to the Existing Patents and the Capture Period Patents in each of the years ended December 31, 2015 and 2016.

Patent Sale Agreements During 2015 and 2016, Yahoo Operating Business sold certain patents and recorded a gain on sale of patents of approximately $11 million and $2 million, respectively."

Copyright © 2017 Robert Moll. All rights reserved.

Thursday, March 9, 2017

IP Watchdog - Can the Supreme Court's errosion of patent rights be reversed?

Dr. Ron Katznelson's article in IP Watchdog: Can the Supreme Court's erosion of patent rights be reversed? is worth reading. Dr. Katznelson argues the Supreme Court series of patent cases in the last decade (since the eBay decision in 2006) have eroded the value of patents in the USA and predicts adding a new justice is unlikely to reverse it.

Copyright © 2017 Robert Moll. All rights reserved.

Wednesday, March 8, 2017

European Patent Office - Annual Report 2016

The European Patent Office (EPO) recently published its Annual Report 2016. The EPO highlights that overall EPO grants increased 42%, but I also found surprising that 48% of the EP applications originate from European states and only 25% of the EP application originate from USA.

Copyright © 2017 Robert Moll. All rights reserved.

Tuesday, March 7, 2017

US Supreme Court - Life Technologies v. Promega - Supplying a Single Component Abroad Doesn't Infringe US Patent Under 35 USC 271(f)(1)

In Life Technologies Corp. v. Promega Corp., the U.S. Supreme Court held supplying a single component abroad for manufacture of a product with multiple components does not infringe a U.S. patent under 35 U.S.C. 271(f)(1). This reverses the Federal Circuit decision, and disagrees with the qualitative argument that a single component can be a "substantial portion" of the components supplied resulting in infringement.

For details and an insightful analysis by Professor John Duffy see SCOTUS Blog.

Copyright © 2017 Robert Moll. All rights reserved.

Monday, March 6, 2017

CAFC - Shaw Industries Group v. Automated Creel Systems - Inter Partes Review Estoppel No Application to Grounds Denied as Redundant

In Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., the Federal Circuit held that 35 USC 315(e) estoppel does not bar an inter partes review (IPR) petitioner from later raising a ground of invalidity not instituted due to PTAB considering it redundant to other grounds in the IPR.                      
  • 35 U.S.C 315(e)(1) PROCEEDINGS BEFORE THE OFFICE.—The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.
Note this reduces the scope of 35 USC 315(e) estoppel and favors patent challengers.

Copyright © 2017 Robert Moll. All rights reserved.

Tuesday, January 3, 2017

USPTO - Stakehold Training on Examination and Procedure - March 14-16, 2017

Today, the USPTO announced a free course in San Jose, CA on examination practice and procedure for newly admitted patent practitioners on March 14-16, 2017.

Here are the details: "As of January 3, sign-up is now open to attend the March 14-16 USPTO three-day training course on examination practice and procedure. The event will be held at the San Jose, California USPTO regional office. The course is offered to members of the public as part of our Stakeholder Training on Examination Practice and Procedure (STEPP) program.

This training is intended for those who have recently passed the Patent Bar for the purpose of practicing before the USPTO. The training will make use of statutes, rules, and guidelines relevant to practicing before the USPTO. The course is led by USPTO trainers and is based on material developed for training patent examiners and other employees. More information, and a proposed upcoming course schedule, is available on the USPTO STEPP page."

Copyright © 2017 Robert Moll. All rights reserved.

Friday, December 30, 2016

IP Watchdog - The Four Consequential Patent Trends of 2016 - Brief Comment

In the IP Watchdog article, The Four Consequential Patent Trends of 2016, Steve Brachmann highlights some key trends in the US patent system today.

The article notes that the FTC Report - Patent Assertion Entity and the decline in patent litigation in 2016 discredit the patent troll narrative, but the media is still lagging on the truth. It notes China and the US have patent systems moving in opposite directions given China's decision to open the door to software and business method patenting, and the Federal Circuit has frustrated patent owners on issues arising from the PTAB trials.

My brief comment is Congress might considering addressing these trends in 2017:

Congress may or may not need more patent reform, but it shouldn't amend any patent law based on the false patent troll narrative. For example, Congress should read the FTC report which among other things, debunks the "patent troll" label as prejudicial. Journalists often have tight deadlines that run counter to rigorous fact investigation. The lobbyists and other hired guns help special interests rather than illuminate journalists. We need laws that strengthen the US economy not certain big tech companies.

Instead of being surprised how China is moving forward with software and business method patenting, Congress should amend the language of 35 USC 101 to clarify the patent-eligible standard for software inventions. Allowance of US software applications should not rest on a patent eligibility test that arguably nobody fully understands. Patentability of software related inventions should return to primarily an examination of prior art.

Practitioners can invalidate patents in the USPTO at lower cost than in court, but the Patent Trial and Appeal Board (PTAB) rules currently tilt the procedure in favor of patent challengers. This is a large topic, but one example is PTAB accords claims the broadest reasonable interpretation, a standard premised on an ability to amend claims, but implements rules that make it nearly impossible to amend claims. Congress should level the playing field of the PTAB trials.

Large entities have successful pushed for a weaker US patent system that permits efficient infringement. Thus, a small entity cannot reliably stop misappropriation of its inventions. But a weaker patent system does not discriminate. Large entities that worked so hard to weaken patents are now more vulnerable to free riders who have no real reason to stop infringing.

Copyright © 2016 Robert Moll. All rights reserved.

Tuesday, December 27, 2016

Joe Mullin - These three 2016 cases gave new life to software patents

In the recent article, These three 2016 cases gave new life to software patents, Joe Mullin observes the Federal Circuit has issued a set of favorable decisions upholding software patents in 2016.

It's nice to hear a "true believer" in the patent troll narrative and the idea software patents harm the economy acknowledge this trend. Even though the article notes the favorable decision, it attempts to spin the yarn that Blue Planet was software patents "last hope." I disagree, and expect more favorable decisions in 2017. Such decisions should not be surprising either, however, as the Federal Circuit is merely doing its job to define the "abstract idea" exception that the US Supreme Court declined to fully define in Alice v. CLS Bank. Like many recent decisions the Supreme Court narrowly decides the case at hand and leave the Federal Circuit latitude to tailor that basic test to the facts at hand. Unfortunately, some articles seem to not recognize a court decides a case with specific facts, and Congress passes laws.

The Alice decision has rendered non-inventive abstract ideas performed on a general purpose computer patent ineligible. I have no problem with this "major blow to software patents." My problem is the Alice decision subjects stakeholders to a decision-maker's personal opinion on (1) what claim limitations constitute the abstract idea; and (2) whether the claim recites "an inventive concept" without the safeguard of comparing the entire claim to the prior art.

Copyright © 2016Robert Moll. All rights reserved.

Thursday, December 22, 2016

Reuters - Nokia sues Apple for infringing patents, industry back on war footing

Reuters reports "Nokia Corp (NOKIA.HE) said on Wednesday it had filed a number of lawsuits against Apple Inc. (AAPL.O) for violating 32 technology patents, striking back at the iPhone maker's legal action targeting the one-time cellphone industry leader a day earlier.

Nokia's lawsuits, filed in courts in Dusseldorf, Mannheim and Munich, Germany, and the U.S. District Court for the Eastern District of Texas, cover patents for displays, user interfaces, software, antennas, chipsets and video coding."

For more details: Nokia sues Apple for infringing patents, industry back on war footing.

Copyright © 2016 Robert Moll. All rights reserved.

Monday, December 19, 2016

Federal Circuit - Unwired Planet v. Google - PTAB's Definition of Covered Business Method Is Too Broad

In Unwired Planet v. Google, the Federal Circuit vacated and remanded the Patent Trial and Appeal Board's ("PTAB") decision to invalidate US Patent No. 7,203,752 under covered business method ("CBM") review, because PTAB relied on a single statement in the legislative history rather than the statutory definition of a covered business method.

Section 18 of the America Invents Act states CBM review is only available for a "covered business method patent," which the AIA defines as "a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions."

Google's lawyers argued (1) a CBM patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity, (2) the patent describes systems and methods that allow users of wireless devices (e.g., cell phones) to set privacy preferences that determine whether a client application is allowed to access device location, and (3) the specification describes a service or good provider that would want to know a wireless device is in its area so relevant ads can be transmitted to the device.

Thus, Google's arguments were not based on Section 18, but a statement in the legislative history and the fact that the specification discusses advertising which relates to "financial activity." The Federal Circuit was not persuaded noting that a method being "incidental" or "complementary" to financial activity opens up the CBM review to many types of patents and PTAB erred in applying a standard not adopted by the USPTO and broader than the AIA contemplates to determine whether the '752 patent is a CBM patent.

If a company has been sued or accused of infringement of a CBM patent, it might consider CBM review because unlike inter partes review it can challenge a CBM patent under 35 USC 101, which is currently a potent defense in certain cases. However, the general language of Section 18 seems likely to invite arguments as to what is a financial product or service and/or a technological invention in the future.

Copyright © 2016 Robert Moll. All rights reserved.

Monday, December 12, 2016

US Supreme Court - Apple v. Samsung - Reverses Apple's Award of $399M for Infringement of Apple's Design Patents

In Samsung Electronics Co. Ltd. v. Apple Inc., the US Supreme Court reversed the Federal Circuit's $399 million award to Apple for Samsung's infringement of Apple's design patents.

As background a design patent is limited to "any new, original and ornamental design for an article of manufacture." 35 USC 171. A design patent seeks to protect appearance. When infringement occurs a design patent holder may elect infringer's profits as a remedy. This is sought when profits exceed a reasonable royalty. US patent law states one who "applies the patented design ... to any article of manufacture ... shall be liable to the owner to the extent of his total profit ... but the owner shall not twice recover the profit made from the infringement." 35 USC 289.

Before the Federal Circuit Samsung had argued Apple's design patent applied to the case, while Apple argued it applied to the entire phone. The Federal Circuit agreed the "article of manufacture” was the entire phone, which, of course, includes hardware and software having considerable value.

Based on Samsung's petition for certiorari the Supreme Court agreed to consider the question: Where a design patent is applied to only a component of a product, should an award of infringer's profits be limited to those profits attributable to the component?

Before the Supreme Court Samsung argued the Federal Circuit held a district court need not exclude unprotected functional features from a design patent's protected ornamental scope and a design-patent holder is entitled to an infringer's entire profits from sales of any product found to contain a patented design without regard to the design's contribution to that product's value or sales, resulting in an award in profits far beyond the value of any inventive contribution.

The Supreme Court was persuaded and held Apple’s patented design applied to the case rather than the entire phone and more broadly stated the "article of manufacturer" may mean not the end product (i.e., phone) sold to consumers but a component of the end product.

The Supreme Court's decision to reverse an award based on Samsung's profit on its entire phone makes sense because to hold otherwise ignores the value of the hardware/software. What's missing in this decision, however, is guidance on how to determine the value of the case. I think the court should determine that value in light of the fact people give importance to how a smartphone looks, which of course is why more than Apple chose to go with the patented design.

Also see my related post: Supreme Court - Apple v. Samsung - SCOTUS Blog - Justices cautious about resolving Samsung-Apple dispute over design of cell phones.

Copyright © 2016 Robert Moll. All rights reserved.

Friday, December 2, 2016

Bloomberg BNA - China Looks to Boost Protection for Software Patents

Bloomberg BNA published an article China Looks to Boost Protection for Software Patents that is worth reading. Here's Bloomberg BNA:

"A draft revision to China’s patent examination guidelines released late last month will likely make it easier to get software and business method patents.

Other proposed changes to ease the standard for amending granted patent claims should also help patent holders and, especially, patent assertion entities, practitioners say.

The draft guidelines follow developments that some have interpreted as evidence of China’s maturing and improving environment for IP owners. The guidelines are not law but rules for instructing examiners at China’s State Intellectual Property Office (SIPO) on how to properly examine patent applications.

There is no official timeline for when to expect finalized guidelines, though some expect they could come as early as next year."

As stated in the article, "One of the biggest changes in the guidelines confirms that software and business methods are patentable. They seek to address concerns that some examiners have been too cautious in treating all references to business models or computers as red flags that signal unpatentability. A sentence in the draft explains that claims relating to a business method are not excluded from patentability if they contain sufficient technical features.

Meanwhile, another change clarifies that apparatus claims relating to software can contain both hardware and 'program' components. And the draft changed language that some examiners have interpreted as barring nearly all computer program references. The guidelines clarify that inventions relating to 'computer programs per se' are not patentable because those are rules and methods for mental activities."

Copyright © 2016 Robert Moll. All rights reserved.

Tuesday, November 22, 2016

PTAB - Results of the Post Grant Outcomes Pilot

Today, the USPTO reported on the Post Grant Outcomes Pilot, concluding it "has succeeded in making examiners aware of patents related to applications they are examining that are involved in PTAB trials, and in turn has facilitated the timely and effective examination of applications."

Chief Judge for the Patent and Trial Appeal Board (PTAB) David Ruschke and Commissioner for Patents Drew Hirschfeld stated:

"As part of the USPTO’s ongoing Enhanced Patent Quality Initiative, in April 2016 we launched the Post Grant Outcomes Pilot, focused on pending patent applications that are related to issued patents undergoing an America Invents Act (AIA) trial proceeding before the Patent Trial and Appeal Board (PTAB). We’d like to report that the Post Grant Outcomes Pilot has succeeded in making examiners aware of patents related to applications they are examining that are involved in PTAB trials, and in turn has facilitated the timely and effective examination of applications.

AIA trial proceedings contain prior art and arguments that might be highly relevant to the patentability determination of related applications currently under examination. This pilot was intended to help examiners harness the art presented during AIA trials to enhance examination of a related application, so they could reach more expeditious decisions on patentability.

During the pilot, we notified examiners via email when they had an application related to an AIA trial, and we streamlined access to the contents of the trial by pinpointing for examiners the most relevant documents. We then surveyed the examiners to gain detailed feedback.

The survey results showed that our examiners found the PTAB information—especially the initial petition (including the prior art citations), the PTAB’s institution decision, and any expert declarations—to be highly useful. We also found that 46% of the examiners referred to at least one reference cited in the AIA trial petition during the examination of their own case, either by citing it in a rejection or as pertinent prior art. If an examiner did not use or cite the prior art from the trial, it was most likely because the claims were different between the “parent” and the “child” case, the examiner disagreed with the AIA petitioner’s analysis of the prior art and/or claims, or the examiner was able to find better art.

To further facilitate the process, in August 2016 we deployed an upgrade to examiners’ desktop application viewers which allows automated access to the contents of related AIA trials, including access to the entire file, and any cited prior art.

Our next objective with regards to the post grant outcomes process is to identify examination best practices or deficiencies that we can address through additional examiner training. To accomplish this, we are currently analyzing data gathered about the AIA trials with respect to prior art searching and claim interpretation, and are also working to thoroughly analyze how PTAB trials impact related applications.

Our final objective is to provide examiners with a periodic review of post-grant outcomes focused on Supreme Court, Federal Circuit, district court, and PTAB decisions that relate to their specific technological area. It is our hope that by providing this information, examiners will gain a better understanding of the current state of the law and what happens to a patent after it leaves the USPTO.

We are dedicated to ensuring examiners have all pertinent information, especially post grant outcomes information, easily and readily available, in order to issue the highest quality patents possible and enhance patent quality overall. Based on the program’s initial results, we can already see that our examiners are benefitting, and we will continue to identify additional ways to improve our processes."

My input is the AIA trials are a significant change in the US patent system, because they invalidate more than half of challenged US patent claims. This pilot produces prior art and arguments that are communicated to examiners handling pending applications that the USPTO determines are "related" to the US patent being challenged in the PTAB trial. Considering the best prior art makes sense, but this may tilt the playing field in favor of larger companies able to finance PTAB trials. On the other hand, patent application owners may look to any patent owner's preliminary response in the PTAB trial to address that prior art.

Copyright © 2016 Robert Moll. All rights reserved.

Thursday, November 17, 2016

PTAB - Global Tel*Link Corp. v. Securus Technologies - Covered Business Method Challenge Terminated Since Patent Not Related to Financial Product or Service

In Global Tel*Link Corp v. Securus Technologies, the Patent Trial and Appeal Board (PTAB) terminated covered business method (CBM) proceeding of U.S. Patent No. 7,860,222 B1, nearly one year after institution, because PTAB determined the '222 patent doesn't relate to a "financial product or service" as required under the American Invents Act (AIA).

See 2015 CBM00145 for details. Also see AIA § 18 (Related to 35 U.S.C. 321) stating that the Director may institute a CBM proceeding only for a patent that is a covered business method patent .... "The term 'covered business method patent' means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions."

Copyright © 2016 Robert Moll. All rights reserved.

Wednesday, November 16, 2016

USPTO - Director Michelle K. Lee at the IAM Patent Law and Policy Conference

Director Michelle Lee recently evaluated the current state and results of her tenure at the USPTO at the IAM Patent Law and Policy Conference:

"Thank you and good morning.  It’s a real pleasure to be with you here today. Throughout the day we’ll be prognosticating about what IP policy will look like in the next administration. This morning, I’d like to share with you my thoughts on: the current state of the U.S. Patent and Trademark Office, and how it situates us to meet our future challenges and opportunities.

What we all know is that IP is increasingly important to the success of our economies. That is perhaps best illustrated in a major study on the economic impact of IP intensive industries that was just published by the USPTO in collaboration with our DOC colleagues at the Economics and Statistics Administration. This report found that IP-intensive industries directly and indirectly supported more than 45 million jobs in 2014, or nearly 1/3 of all U.S. jobs. These findings parallel the recently released joint EPO and EUIPO study that found that approximately 38% of all employment in EU stems from businesses that have a higher than average use of IP rights. So, whether you’re in D.C., or London, or anywhere in between or beyond, IP remains a vital driver of economic growth. And that is why I believe the incoming administration must and will continue our effort to promote innovation fueled by a strong and robust IP system. Support for IP in the United States has a long history of bipartisanship, and there’s no reason to imagine that changing with a new president and a new Congress, both of whom have economic growth as a top priority.

Because we will spend much of today looking forward, allow me to look back on what we’ve done during this administration and how it positions us for the work ahead. Back in January 2009, when President Obama was first sworn into office, the USPTO’s patent application backlog and pendency numbers were at all-time highs. Today, both our backlog and pendencies are now lower than they’ve been in more than a decade, and they continue to go down. That is hardly the only success story. But it’s emblematic of how much the USPTO has charged forward the last eight years, and how strongly it is positioned to face future challenges. This has been a team effort, with incredible work done by my predecessors including former Director Dave Kappos, Congressional cooperation, the incredibly dedicated and talented staff at the USPTO, and all of our stakeholders. Together, we have put the agency in a spot where we are well-suited to tackle the challenges and opportunities ahead.

Today, we are financially more secure thanks to the America Invents Act, a milestone of this administration, which gave us, among other things, fee setting authority. Additionally, we are more customer-service oriented and more responsive to stakeholders than ever before. We’ve constantly welcomed—in fact solicited—feedback and input, and are willing to refine and improve where needed. We’ve had more RFC’s, Proposed Rules, and roundtables than ever before – including on such topics as: our Enhanced Patent Quality Initiative, our 101 guidance, our PTAB implementation and refinements, and our transparency of patent ownership proposal.

Thank you for your input, patience and help responding to each. We’ve also brought a broader range of services to support American innovators where and when needed, including: Through four Regional Offices across the country, and over a dozen IP attaches across the globe. And, we’ve worked to provide you with more access to examiner interviews increasing the number of interview hours by more than 232% in just 8 years. Finally, and importantly, the USPTO’s relationships with all of its partners is healthier and stronger than ever before –that’s with the public, our employees, Congress, and within the administration.

I want to take a brief moment on this topic, because I really do believe it is key to the agency’s success – past and future. Thinking back to even just 10 years ago, the relationship with the public was nowhere near as collaborative, transparent, or productive as it is today. The agency often did not seek much input on examiner guidance or implementation rules. In fact, almost 10 years ago, the USPTO was sued in Tafas v. Dudas, when it decided to move ahead—over much public opposition—to adopt rules that would have placed additional burdens on patent filings. And interviews weren’t encouraged as they are today. Together, we have changed that dynamic. Second, we’ve strengthened our working relationship with our employees. All told, we have enjoyed some of the highest rankings in the Partnership for Public Service’s list of Best Places to Work in the Federal Government. And we all know, an engaged workforce produces better work product and services. We have also maintained a healthy working relationship with Congress on both policy proposals and operational issues. From the passage of AIA, to the Defend Trade Secrets Act, to technical assistance on various legislative proposals, we have engaged with our colleagues on the Hill in impactful ways and the USPTO’s voice is a respected one. Finally, the USPTO is effectively fulfilling its role as principal advisor to the president and administration on IP policy. I’ve been pleased with the confidence the president and the Secretary of Commerce have shown me and my team, allowing us to pursue policies and programs in the best interest of our innovators. All of this: the greater financial security, the increased customer service orientation, and the better relationships with all of our stakeholders, has enabled us to make real progress on our priorities, and positions us for even greater success going forward. There is strong evidence of this in a number of important areas, including patent backlog and pendencies, quality and  policy.

During this administration, we have: reduced the backlog of unexamined patent applications by approximately 30% despite an average four percent year-over-year increase in filings, reduced our first action pendency by 38% to 16.2 months, and reduced total pendency by ~25% to 25.3 months. Armed with greater finances and a shrinking backlog, we embarked on an unprecedented effort to enhance the quality of patents – a core goal of the agency. There is a cost to society when the USPTO issues a patent that we should not issue, just as there is a cost to society when we don’t issue a patent that should issue. And just as there is a cost to society when there is a patent in the system that the USPTO properly issued but that is no longer valid in light of changes in case law. Recognizing this, we have enhanced the quality of patents in our system, both before they leave our office through our Enhanced Patent Quality Initiative led by a new Deputy Commissioner and a newly created department within the Patents solely focused on this effort and after the patents return to the office through our PTAB and other post grant review proceedings.
Addressing the second prong first, the new PTAB proceedings have significantly changed the patent landscape – both litigation and prosecution. We have had more than 5,000 PTAB petitions filed to date, and these proceedings are meeting our Congressional mandate of providing a faster, more cost efficient quality check on the patents in the system. With extensive input from all of you, we have worked hard to implement and conduct these proceedings as fairly and effectively as possible. That’s why I asked my team to engage all of you in a series of listening tours that led to a set of “quick fixes” in 2015 and then more substantive revised rules last April. That’s why we took it upon ourselves to assess the frequency of motions to amend and the reasons for their grants and denials. And, that’s why, in response to input from stakeholders about serial PTAB patent challenges, I asked my team to study the data to determine whether, to what degree and under what circumstances, patents were being challenged multiple times and whether those challenges might be improper or unfair. Our study produced some interesting data that I believe will better inform our discussions on this topic. We will be publishing a request for comments within the next several weeks, sharing details of the data we gathered, asking if our data matches your experiences, and welcoming what, if any, next steps might be appropriate in light of the data. Bottom line, we’re listening to you and applying your input to identify how and where we can do better.

These PTAB proceedings have proven a valuable check on patent quality, particularly in the later part of a patent’s lifecycle. At this point, it makes sense to bring greater resources to bear if there are questions about a patent’s validity. The economics are different at the beginning of a patent’s lifecycle. The value of a patent is often not fully known at time of filing perhaps due to the nascency of the technology, industry and/or market, and the time and resources afforded during examination are typically limited. Innovation isn’t served if the USPTO only strives to issue very expensive “bullet-proof” patents after many years of examination. Extensive time and expense would mean that innovators would file too few patent applications, given finite budgets. If over time the industry and the market determine that a piece of patented technology is valuable and the public believes it is not valid under current law then there is an economic incentive to expend greater resources to test the validity of the patent.  And a panel of technically trained judges steeped in patent law is well-suited to perform this double-check quickly and efficiently. In short, to best incentivize innovation, the USPTO needs to issue IP rights that are as certain, reliable and affordable as they can reasonably be, and offer post-grant proceedings that quickly, accurately and cost-effectively test the validity of patents, proven to be of economic importance, if questions of validity arise. With all of that said, it is essential that these post-grant proceedings are properly calibrated so that they provide a quality check but do not bar deserving patentees from enforcing their patent rights. It’s why a number of the protections in the AIA are so important, such as restrictions on timing of challenges, thresholds petitioners must meet for institution, and strict estoppel provisions. It’s also why the agency is committed to revising our rules as many times as needed so these proceedings are as fair and effective as possible within our Congressional mandate. It’s why it is critical, within this framework, the USPTO issue the very best quality patents possible.

Patents that are issued correctly, clearly and consistently across the Patent Examination Corps. And, it’s why I launched the Enhanced Patent Quality Initiative in 2015, so patent owners can have greater confidence and certainty of their rights in this new environment. Today we’ve got about a dozen initiatives underway that, we believe, will meaningfully move the needle on enhancing patent quality. This includes making sure we’re getting the most relevant prior art before our examiners as early as possible by: making prior art cited in our PTAB proceedings available to the examiner handling a related pending child application, and transitioning our all our examiners from the decades old, antiquated U.S. Patent Classification System to the updated, increasingly global Cooperative Patent Classification System. It also includes drilling down on best practices such as clarity of the record, developing new and better ways to measure our progress, through our Master Review Form and new Quality Metrics, and, importantly, reviewing the amount of time our examiners need to do their work in light of these changes and other larger changes within the patent system.

So, this is what we’re doing at a high level, but I’d like to share more specifics about one of our programs, our “Clarity of the Record Initiative” and some of the great progress we have been making on our Clarity of the Record pilot program. The goal of this program is to develop best practices on how much detail to include in certain key parts of the prosecution history, for example: Interview summaries, or reasons for allowance, or construction of 112(f) limitations. Regarding interview summaries: How many times have you reviewed a file history, noted the patent rejected and then seen the patent allowed after an interview with minimal or no changes to the claims and little or no explanation for the allowance? In this pilot, we worked to provide more detailed summaries including the substance of the examiner’s position, details of any agreement reached, and a description of next steps following the interview. After the pilot concluded, we measured 22 data points focused on clarity, and found an average of 15% improvement in clarity between the pilot examiners and a control group. On reasons for allowance: How many times have you reviewed a prosecution history, and there is nothing in the record to indicate why the claims were allowed by the examiner? Because it is at the discretion of the individual examiner to set forth reasons for allowance, those reasons have not always been included in every Notice of Allowance. In this pilot, we trained participants on setting forth reasons for allowance in every Notice of Allowance. At the conclusion of the pilot, we found a 25% improvement in the clarity of reasons for allowance between the pilot and control group. On claim interpretation:  How many times have you seen a prosecution history, where there was clearly an issue about how a claim was interpreted, but the record was devoid of any explanation of the interpretation? In the pilot, the examiners were given training on explicitly setting forth key claim interpretations to minimize ambiguities. For example: Explaining all Section 112(f) presumptions and whether the presumptions were overcome, Identifying on the record the structure in the specification that performs the function, and when a prior art reference is used to reject multiple claims, clearly addressing specific limitations in each claim that provide the basis for the rejection. With our trainings on interview summaries, reasons for allowance and claim interpretations, we saw a statistically significant improvement in clarity when examiners used these best practices. Also, the clarity of the record initiative furthers the goal of compact prosecution by encouraging the applicant to rebut the examiner’s on-the-record position promptly and directly if there is disagreement. In short, we are already taking steps to clarify the record and you will see our examiners doing so increasingly over time. And importantly and necessarily, we are simultaneously reviewing the amount of time needed for this effort, and will work with the public to determine the desired amount of additional clarity and appropriate time to achieve the goal.

Of course, patent quality also means applying the law accurately and clearly even in areas of the law that are evolving including, for example, the 101 jurisprudence on what is patent eligible subject matter. As many of you know, we’ve spent a fair amount of effort on this in recent months and years. Following major court rulings, we’ve revised our examination guidance, with input from all of you, multiple times and trained our examiners on the new guidance. And, we just announced in a Federal Register Notice two roundtables focused exclusively on the topic of patent eligible subject matter. At the first roundtable, held just yesterday, we discussed potential updates to our examination guidance, and at the second roundtable, on Dec. 5, we will discuss the impact of the current 101 jurisprudence on innovation, what changes might be considered to further support innovation, and whether such changes are best achieved legislatively, judicially or administratively. We thought it would be helpful to begin the public discussion, to create a record of where there is agreement or disagreement and what, if any, improvements would be helpful to make. We welcome your participation on this important and complex issue. As I hope you can see from this quick run-down of our initiatives, we are very excited about our Enhanced Patent Quality Initiative. It is an ambitious effort that is yielding some results now and will yield even more in the future. To learn more about our progress to date, please join us – on December 13, at the USPTO, where we will spend a good part of the day sharing details of the results of each of the dozen or so Enhanced Patent Quality Initiatives. We think you will like what you hear.

We’ve clearly made tremendous progress over the past eight years, but of course, we have more work to do to further strengthen our patent system’s ability to promote innovation in our ever changing environment. As I said earlier, I’m optimistic the incoming administration will share our appreciation of the importance of intellectual property as a driver of economic growth. As I look ahead, I foresee legislative patent reform changes will continue to be discussed in Congress, though those conversations will likely occur later in the term after some of the other priorities including filling a Supreme Court vacancy, immigration and tax reform are addressed, and any legislative patent reform will likely be more targeted, rather than the comprehensive reforms we’ve seen in prior Congresses. I would hope any legislative proposal will take into account the numerous positive changes that have occurred recently in the patent system including: through the courts, including on attorneys fees, pleading requirements and discovery limits, and at the USPTO through the PTAB and the agency’s efforts to improve the quality of patents in our system. As far as issues, I predict legislative discussions may include venue reform and possibly changes to Section 101 and PTAB. On venue, with nearly half of the patent cases filed in 2015 filed in a single district out of 94 federal judicial districts, it is easy for critics to contend that plaintiffs seek out this district preferentially for the wrong reasons. And the mere perception that there are advantages to be gained by forum-shopping challenges the public’s faith in the patent system. So there will be continuing pressure for legislative (and likely judicial) action on the issue of venue. The scope of any legislative reform remains to be determined, but I predict that the focus will be on more targeted, rather than comprehensive reform as we saw these past couple Congresses. Further, I anticipate that the USPTO’s work across the globe to ensure that other countries have strong IP protections adequate enforcement mechanisms and remedies, and appropriate technology transfer (or licensing and competition) policies, will continue in the next Administration particularly in such countries as China and others. This is a President-elect that has promised economic growth and job creation in our country, and IP will necessarily be a key piece to achieving that goal.

With that, let me conclude by saying that I firmly believe that the USPTO is healthy, well-functioning and poised to successfully handle whatever challenges and opportunities lie ahead.  Our issues are important, complex and nuanced. And while not everyone will always agree with all that the agency does, we are well prepared and poised to work together to accomplish our shared priorities and address the challenges ahead. When President Obama was inaugurated in 2009, his focus was on leading this nation’s recovery from the Great Recession. One of his first acts was to ask the Smithsonian to provide for display in the Oval Office some patent models that demonstrated past American innovation that led to new jobs and new industries. The president said that throughout our history, Americans solved problems through innovation and IP. He wanted to see reminders of that every day as he encountered the challenges he faced. The Smithsonian provided him with three models: Samuel Morse’s telegraph (1849),  John Peer’s gear cutter (1874), and Henry Williams’ steamboat wheel (1877). As I stood behind the President in the Oval Office earlier this year when he signed the Defend Trade Secrets Act, I couldn’t help but notice those three models along the wall to my left—still there almost eight years later—and feel extraordinarily humbled and honored. I feel that same honor and humility today standing before all of you and reflecting on just how much we have accomplished under this administration.  I’ve been fortunate to lead the USPTO at a time when intellectual property issues have been front and center on the consciousness of the American public and President and to have had the opportunity to help guide the direction in a small way. My hope is that the President-elect keeps the patent models from Morse, Peer and Williams in his office as a reminder of the importance of intellectual property to the economic prosperity that I know he wants for our country.

Thank you for all your support of the work of my team and I know that we all will continue to work together to ensure that our greatest inventions are yet to come. Thank you."

Copyright © 2016 Robert Moll. All rights reserved.

Sunday, November 13, 2016

Federal Circuit - AmDocs (Israel) Limited v. Opennet Telecom - Software Patent Claims Eligible

In Amdocs (Israel) Limited v. Opennet Telecom, the Federal Circuit reversed the district court decision that the claims are patent ineligible under 35 USC 101.

In Amdocs, the Federal Circuit stated that patent eligibility under Mayo is a two-step framework: (1) Is the patent claim directed to a patent-ineligible exception (e.g., abstract idea); and (2) if so, do elements of the claim both individually and as an ordered combination transform the nature of the claim into a patent-eligible application that is have an inventive concept.

The Federal Circuit observed although the framework is familiar courts have not articulated a single universal definition of abstract idea. "Instead of a definition, then, the decisional mechanism courts now apply is to examine earlier cases in which a similar or parallel descriptive nature can be seen—what prior cases were about, and which way they were decided ... That is the classic common law methodology for creating law when a single governing definitional context is not available. See generally Karl N. Llewellyn, The Common Law Tradition: Deciding Appeals (1960). This more flexible approach is also the approach employed by the Supreme Court. See Alice. We shall follow that approach here."

The Federal Circuit started its analysis by asserting claim 1 is representative:

1. A computer program product embodied on a computer readable storage medium for processing network accounting information comprising:

computer code for receiving from a first source a first network accounting record;

computer code for correlating the first network accounting record with accounting information available from a second source; and

computer code for using the accounting information with which the first network accounting record is correlated to enhance the first network accounting record.

The Federal Circuit stated "claim 1 is therefore distinct from the ineligible claims in Digitech, Content Extraction ... The claim in Digitech was not tied to any particularized structure, broadly preempted related technologies, and merely involved combining data in an ordinary manner without any inventive concept. See 758 F.3d at 1350-51. In contrast, claim 1 of the '065 patent is tied to a specific structure of various components (network devices, gatherers, ISMs, a central event manager, a central database, a user interface server, and terminals or clients). It is narrowly drawn to not preempt any and all generic enhancement of data in a similar system, and does not merely combine the components in a generic manner, but instead purposefully arranges the components in a distributed architecture to achieve a technological solution to a technological problem specific to computer networks. '065 patent at 4:29-33, 4:43-54, 3:56-65, 4:33-42, 7:51-57, 10:45-50, 7:7-8, 7:62-67, 11:1-7.

Similarly, claim 1 is distinct from the representative claim in Content Extraction, which involved the generic, well-known steps of collecting data, recognizing data, and storing data.776 F.3d at 1347. Unlike the claim in Content Extraction, claim 1 of the '065 patent depends upon a specific enhancing limitation that necessarily incorporates the invention's distributed architecture—an architecture providing a technological solution to a technological problem. This provides the requisite `something more' than the performance of "well-understood, routine, [and] conventional activities previously known to the industry." at 1347-48 (quoting Alice, 134 S. Ct. at 2359. Claim 1 is similar to the claims in DDR Holdings and BASCOM. As in DDR Holdings, when the claim limitations were considered individually and as an ordered combination, they recited an invention that is not merely the "routine or conventional use" of technology.

Here, claim 1 solves a technological problem (massive dataflows requiring huge databases) akin to the problem in DDR Holdings (conventional Internet hyperlink protocol preventing websites from retaining visitors). Cf. Intellectual Ventures I LLC v. Capital One Bank (USA) (Fed. Cir. 2015). Claim 1 involves some arguably conventional components (e.g., gatherers), but the claim also involves limitations that when considered individually and as an ordered combination recite an inventive concept through the system's distributed architecture.

Claim 1 is also like the claims in BASCOM because even though the system in the '065 patent relies upon some arguably generic limitations, when all limitations are considered individually and as an ordered combination, they provide an inventive concept through the use of distributed architecture. This is similar to the design in which permitted the invention to have a filtering tool with the benefits of a filter on a local computer and the benefits of a filter on an ISP server. The benefits in were possible because of customizable filtering features at specific locations remote from the user. Similarly, the benefits of the '065 patent's claim 1 are possible because of the distributed, remote enhancement that produced an unconventional result—reduced data flows and the possibility of smaller databases. This arrangement is not so broadly described to cause preemption concerns. Instead, it is narrowly circumscribed to the particular system outlined. As in BASCOM, this is a technical improvement over prior art technologies and served to improve the performance of the system itself.

For all these reasons, and with the understanding that claim 1 is representative, we reverse the district court's judgment that claims 1, 4,7, 13, and 17 of the '065 patent are ineligible under § 101."

Thus, the Federal Circuit is limiting the lower court and USPTO finding of patent ineligibility based on Alice/Mayo when the claims provide "an inventive concept" and "a technological solution to a technological problem."

Copyright © 2016 Robert Moll. All rights reserved.

Tuesday, November 8, 2016

Federal Circuit - SAS v Complementsoft - PTAB's Partial Institution of Inter Partes Review

In SAS Institute v Complementsoft , the Federal Circuit denied SAS's petition for a rehearing en banc to consider the Patent Trial and Appeal Board (PTAB) practice of institution of an inter partes review of less than all of the claims challenged by petitioner.

Copyright © 2016 Robert Moll. All rights reserved.

Friday, November 4, 2016

USPTO - Memo on Recent Subject Matter Eligibility Decisions - November 2, 2016

The USPTO published a memo Recent Subject Matter Eligibility Decisions that seeks to clarify the Federal Circuit's recent decisions on patent eligibility of software-related inventions.

As stated in the USPTO memo:

"The U.S. Court of Appeals for the Federal Circuit (Federal Circuit) has issued a number of subject matter eligibility decisions since the May 2016 Update to the USPTO's subject matter eligibility (SME) guidance. These decisions do not change the basic subject matter eligibility framework explained in the SME guidance and training examples, but provide additional information about finding eligibility for software claims. Accordingly, the USPTO will be updating its SME guidance in view of these decisions and feedback from patent stakeholders.

This memorandum provides a discussion of two of the recent decisions identifying eligible subject matter, namely McRO, Inc. dba Planet Blue v. Bandai Namco Games America Inc., 120 USPQ2d 1091 (Fed. Cir. 2016) and BASCOM Global Internet Services v. AT&TMobility LLC, 827 F .3d 1341 (Fed. Cir. 2016). Yesterday, the Federal Circuit issued another precedential decision finding eligibility Amdocs (Israel) Ltd. v. Openet Telecom, Inc., No. 2015-1180 (Fed. Cir. Nov. 1, 2016)), which will be discussed further in the forthcoming update to the SME guidance, along with McRO, BASCOM, and other recent decisions concerning patent eligibility. These decisions have also been added to the chart of court decisions available on the·USPTO's SME Webpage."

Thus it appears the Federal Circuit is formulating a more favorable patent eligibility test in 2016. However, 35 USC 101 has a broad definition of what is patent eligible subject matter. The Supreme Court has introduced a judicial abstract exception to this broad statutory language, but has not clearly defined it. Until we get clarification from the Supreme Court and/or Federal Circuit or a legislative fix I expect to see this issue to be "decided" case by case.

Copyright © 2016 Robert Moll. All rights reserved.

Thursday, November 3, 2016

TTAB - Enhancements to Trademark Trial and Appeal Board Proceedings

Today, Chief Administrative Trademark Judge Gerard F. Rogers posted on the TTAB rule changes:

"The Trademark Trial and Appeal Board (TTAB) announced the culmination of an in-depth outreach effort to stakeholders focused on enhancing the Board’s appeal and trial processes. In a Notice of Final Rule-Making (NFRM), published in the Federal Register on October 7, 2016, the USPTO said new rule changes will benefit the public by providing more clarity in the rules, flexibility for parties involved in Board proceedings, and increased procedural efficiency. At the same time, the rules further a USPTO strategic objective to increase end-to-end electronic processing of trademark matters, which reduce costs to the USPTO and the public, and helps avoid errors that may creep into records during manual entry of data contained in paper filings.

The last major set of TTAB rule changes took effect in 2007. Since then, there have been case law developments, changes in the Federal Rules of Civil Procedure, and the rollout of the USPTO’s Accelerated Case Resolution (ACR) process. Therefore, it is an ideal time to update the rules to make the benefits of ACR available to all parties, as well as to promote electronic filing and communication. The rule changes, major provisions of which are summarized below, reflect significant input from the Trademark Public Advisory Committee, individual stakeholders, and professional associations, and have been well-received since publication in the Federal Register.

One of the most overarching rule changes involves the Board assuming responsibility for service of the complaint filed to initiate an inter partes proceeding. This rule change shifts responsibility for service of the complaint in an opposition or cancellation proceeding from the plaintiff to the Board, in an effort to reduce the responsibilities of litigants during the commencement of a proceeding.

Another exciting change is the Board moving exclusively to use of electronic filings and communication. In this new all-electronic environment,instead of mailing hard copies of institution orders and complaints, the Board forwards an order by email, with a link to both the proceeding file and the complaint, as displayed in the Board’s electronic docketing system known as TTABVUE. The rule changes also mandate that parties file documents through ESTTA, the Board’s electronic filing system. That requirement results in cost-savings to the USPTO and to private litigants, and will increase the efficiency with which the Board can process matters. Finally, filings and papers are now required to be exchanged between parties by email, with exceptions made for technical problems or extraordinary circumstances; and to allow the parties flexibility, they may agree to alternate methods of communication or exchange of documents and information that work best in their particular circumstances.

Reflecting recent amendments to the Federal Rules of Civil Procedure, new discovery provisions in the rule changes help curtail abuse and reduce litigation expense for stakeholders. The number of requests for production of documents and requests for admission are now limited to 75, paralleling the current limitation on interrogatories. To avoid disadvantaging parties that use requests for admission to authenticate produced documents, the changes provide for one comprehensive request for admission to the producing party to seek authentication of identified documents or specification of those documents which cannot be authenticated. This option facilitates introduction of produced documents at trial by notice of reliance, rather than through painstaking witness identification and testimony, thereby providing the parties more flexibility during trial. Finally, the rule changes afford the parties substantial flexibility to stipulate to various limitations on discovery in terms of duration, number of requests, and the elimination of discovery altogether.

Additionally, the rule changes establish new deadlines in discovery, paving the way for another significant change -- a requirement that motions to compel discovery or to determine the sufficiency of responses to requests for admission be filed prior to the deadline for plaintiff’s pretrial disclosures. These revisions help parties avoid the expense and uncertainty that arise when discovery disputes erupt on the eve of trial and ensure parties make pretrial disclosures and engage in trial preparation only after all discovery issues have been resolved. As with the timing of motions relating to discovery disputes, motions for summary judgment must be filed prior to the deadline for plaintiff’s pretrial disclosures. This avoids disruption of trial planning and preparation which can occur by filing such motions late in the process.

ACR procedures have proven particularly effective at streamlining trial proceedings. These include agreements to limit discovery and to shorten trial periods or the time between trial periods, and stipulations to certain facts or to the admissibility of documents or other evidence. Accordingly, parties are still able to enter into stipulations regarding proffers of testimony, but the rules allow any party unilaterally to choose to present trial testimony by affidavit or declaration, subject to the right of cross-examination by the adverse party or parties.

Finally, the rule changes include expanding the parties’ options through which evidence is submitted during trial. Parties may now make of record, via notice of reliance, pleaded registrations and registrations owned by any party by submitting a current copy of information from the USPTO electronic database records showing current status and title; and the rule changes codify this option. In addition, parties may now also use the notice of reliance method for submitting internet materials.

The rule changes become effective January 14, 2017, and apply to all proceedings pending at that time or begun thereafter. All employees at the Board, including our 243 information specialists and paralegals, our 245 attorneys, and our judges, have been involved in identifying these improvements, and we strongly believe that these changes help streamline our trial proceedings and avoid unnecessary expense and complications for parties involved in our cases.  We continue to welcome any feedback you have on TTAB trial proceedings in order to increase clarity, efficiency, and effectiveness of our processes."

Copyright © 2016 Robert Moll. All rights reserved.

Tuesday, November 1, 2016

USPTO - EFS Authentication Update

The USPTO has taken steps to expand browser choices for the electronic filing system (EFS) beyond Microsoft Internet Explorer notifying:

"As a reminder, EFS-Web and Private PAIR users should have the latest Java 8 version, which is needed for the current authentication Java Applet.

On Oct. 24, a new interim authentication method using Java Web Start will be available to provide access to EFS-Web and Private PAIR. You must have Java 8 to use the new Java Web Start authentication method. The interim authentication solution provides a new, plug-in-free option for users to authenticate, and will expand browser options until a new permanent solution is in place.

While you can continue to authenticate using the existing method (Java Applet), you will be given an option to utilize the new method. This interim solution uses Java Web Start technology, allowing users to authenticate into EFS-Web and Private PAIR utilizing their current digital certificate. The new option will provide users more flexibility in browser choice as it reduces the dependency on the Java Applet plug-in. Digital Certificate Management (DCM) tools will also be supported on Java Web Start in a subsequent release."

The USPTO notes if "you have questions, please contact the Patent EBC at (866) 217-9197 or send an email to To provide feedback, please email us at, or you can visit our eCommerce Modernization web page."

Copyright © 2016 Robert Moll. All rights reserved.