Saturday, August 31, 2013

America Invents Act - On Sale Bar, 35 USC 102

Prior to the America Invents Act (AIA), the on sale bar has been a frequent way inventors lose U.S. patent rights. Basically, US patent law gave an inventor one year to file a US patent after the first offer for sale of an invention ready for patenting. Thus, it tackles inventors that are commercializing the invention too early before they file the patent application. See the U.S. Supreme Court's landmark decision Pfaff v. Wells Electronics, Inc. in 1998.

The AIA makes dramatic changes to 35 USC 102 that may increase loss of U.S. patent rights since the scope of the one year grace period is uncertain, a prior sale no longer needs to be "in this country" (USA), and in particular it is unclear how the grace period is narrowed with respect to non-public sales.

We don't have court decisions, however, the USPTO has published the Examination Guidelines For Implementing The First Inventor To File Provisions Of The Leahy-Smith America Invents Act (Examination Guidelines) and other USPTO educational materials that can guide our analysis of the new grace period.

The starting point for understanding the new grace period is the statutory language:

35 U.S.C. 102(a)(1) states "a person shall be entitled to a patent unless the claimed invention was ... on sale, or otherwise available to the public before the effective filing date of the claimed invention. Thus, 102(a)(1) tells us generally of activities that will result in denial of patent protection."

35 USC 102(b)(1) states, however, that "a disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if
(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor. Thus, 102(b)(1) tells us of the circumstances where the 102(a)(1) activities will be excused for one year."

The USPTO educational materials states to understand the exceptions of 35 USC 102(b), we must define three terms: disclosure, inventor, and one year or less. An inventor and one year or less are defined consistent with pre-AIA law. The term disclosure is defined in a new way to include evidence that the claimed invention was on sale.

Interpreting how the on sale bar requires (or doesn't) require "disclosure" is likely to be a litigation hot spot. The Examination Guidelines stated that "a number of comments suggested that public availability should be a requirement for “on sale” activities under AIA 35 U.S.C. 102(a)(1), and that non-public uses and non-public sales or offers for sale do not qualify as prior art under the AIA. The comments suggesting that public availability should be a requirement for 'on sale' activities under AIA 35 U.S.C. 102(a)(1) gave the following reasons: (1) The catch-all phrase 'otherwise available to the public' in AIA 35 U.S.C. 102(a)(1) and case law cited in the legislative history of the AIA supports the view that 'available to the public' should be read as informing the meaning of all of the listed categories of prior art in AIA 35 U.S.C. 102(a)(1); (2) the removal of derivation under pre-AIA 35 U.S.C. 102(f) and prior invention under pre-AIA 35 U.S.C. 102(g) as prior art indicates that the AIA intended to do away with 'secret' prior art; (3) public availability is the intent of AIA, and for the Office to construe the statute otherwise would erode the availability of patent protection in the United States, and weaken the economy; (4) interpreting the 'on sale' provision to require public availability is good public policy in that it would lower litigation costs by simplifying discovery, and would reduce unexpected prior art pitfalls for inventors who are not well-versed in the law."

Okay, that is one interpretation of the statute. But other comments "suggested that the legislative history of the AIA is insufficient to compel the conclusion that Congress intended to overturn pre-AIA case law holding that an inventor's non-public sale before the critical date is a patent-barring 'on sale' activity as to that inventor. One comment suggested that commercial uses that are not accessible to the public are nonetheless disqualifying prior art because Metallizing Engineering and other pre-AIA case law interpreting 'public use' and 'on sale' continue to apply under the AIA, and do not require public availability. The comment further suggested that commercial uses that are accessible to the public, even if such accessibility is not widespread, are disqualifying prior art to all parties. Another comment suggested that Metallizing Engineering and other forfeiture doctrines should be preserved because they serve important public policies. Another comment suggested that if the Office does adopt the position that Metallizing Engineering is overruled, and that any sale under AIA 35 U.S.C. 102(a)(1) must be public, the Office should promulgate a rule requiring that any secret commercial use of the claimed invention more than one year prior to the effective filing date be disclosed to the Office. Another comment indicated that sales between joint ventures and sales kept secret from the 'trade' should still be considered prior art under AIA 35 U.S.C. 102(a)(1)."

Here is how the USPTO responded: "A patent is precluded under AIA 35 U.S.C. 102(a)(1) if 'the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.' AIA 35 U.S.C. 102(a)(1) contains the additional residual clause 'or otherwise available to the public.' Residual clauses such as 'or otherwise' or 'or other' are generally viewed as modifying the preceding phrase or phrases. Therefore, the Office views the 'or otherwise available to the public' residual clause of the AIA's 35 U.S.C. 102(a)(1) as indicating that secret sale or use activity does not qualify as prior art."

This suggests a secret sale prior to filing an application needs no grace period because it is not prior art. However, this seems to allow for secret commercialization of the invention more than one year before filing the application, which is contrary to many decades of case law.

The USPTO says its "interpretation of AIA 35 U.S.C. 102(a)(1) also ensures that the AIA grace period can extend to all of the documents and activities enumerated in AIA 35 U.S.C. 102(a)(1) that would otherwise defeat patentability. In addition, this interpretation avoids the very odd potential result that the applicant who had made his invention accessible to the public for up to a year before filing an application could still obtain a patent, but the inventor who merely used his invention in secret one day before he filed an application could not obtain a patent."

If the goal is prompt disclosure to the public of the claimed invention I am not sure this is odd. Further, the USPTO's concern that a secret sale one day before the filing date bars a valid patent from issuing seems misplaced since the USPTO says a secret sale is not prior art requiring an exception to the general rule barring pre-filing activity.

Copyright © 2013 Robert Moll. All rights reserved.

Wednesday, August 28, 2013

USPTO Upgrades US Patent Database from TIFF to PDF Images

On August 23, the USPTO notified it upgraded the US patent database to use PDF rather than TIFF images. Most web browsers support PDF rather than TIFF so this is good news for searchers who want to use another database beside Free Patents Online (FPO) and Google patents.

Here's details of the USPTO notice:

"The USPTO has upgraded the USPTO Full Text and Image Database. It now uses PDF images instead of TIFF images which provides several new benefits including the ability to print full documents. Patent images may be viewed, printed and saved using a standard PDF-equipped browser. A separate TIFF plug-in is no longer required. In addition to the standard page-by-page viewing, users may now also click on a “Full Document” button to retrieve all the patent images at once."

Here's the procedure for downloading a full PDF copy of a U.S. patent:

1. Click on Full Text Images
2. Type the US Patent Number (e.g., 8,082,299) in the patent field
3. Click on the View Patent button
4. Click on the Full Pages button and see displayed PDF copy of US Patent No. 8,082,299 B2, Client-Side Caching of Pages with Changing Content

Copyright © 2013 Robert Moll. All rights reserved.

Sunday, August 25, 2013

Manus Cooney - GAO Report Finds No NPE Patent Litigation Crisis & Patent System Has No Negative Impact on Innovation

On August 22, I posted GAO's Study - Assessing Factors That Affect Patent Infringement Litigation Could Help Improve Patent Quality. The GAO study contradicts reports of a non-practicing entity (NPE) patent litigation crisis:
  • NPEs account for 20% of patent litigation; operational companies or practicing entities (e.g., Apple, Google, and Samsung) account for 80%
  • Software patents account for 89% of patent litigation
  • Patent lawsuits only slightly increased from 2000 to 2010
  • The America Invents Act (AIA) requiring a separate suit for each defendant rather than allowing joinder of multiple defendants drives the 1/3 increase in post-AIA lawsuits since the AIA passed
Today, Manus Cooney's GAO Report Finds No NPE Patent Litigation Crisis in IP Watchdog gave some highlights of the GAO Report noting: "Just when Congress is gearing up to consider a package of patent reform initiatives aimed at dealing with abusive patent litigation, the U.S. General Accountability Office has released a much anticipated study of the 'consequences of litigation' by non-practicing entities as mandated by Section 34 of The America Invents Act (AIA). Given that Section 34’s language and directives could best be described as unenthusiastic towards licensing and the enforcement of patents, an objective reader of the GAO study cannot help but conclude that the GAO did not conduct or produce the sort of scornful report on the state of our patent system that large IT companies and patent-skeptics had hoped for. While the report is not a vindication for NPEs (far from it), it did not give patent critics what they hoped to get (i.e. an independent agency’s finding that patent litigation is exploding and that this increase in litigation is having a negative impact on innovation).  Quite the contrary."

Mr. Cooney sounds like a voice in the wilderness. But maybe he is right -- and the entire NPE patent litigation crisis is the handiwork of corporate lobbyists, not to say the US patent system is perfect, to steamroll more US patent law reform.
Copyright © 2013 Robert Moll. All rights reserved.

Thursday, August 22, 2013

GAO's Study - Assessing Factors That Affect Patent Infringement Litigation Could Help Improve Patent Quality

On August 22, 2013, the U.S. Government Accountability Office (GAO) released a study entitled Assessing Factors That Affect Patent Infringement Litigation Could Help Improve Patent Quality.

Here's the highlights of the GAO study:

"From 2000 to 2010, the number of patent infringement lawsuits in the federal courts fluctuated slightly, and from 2010 to 2011, the number of such lawsuits increased by about a third. Some stakeholders GAO interviewed said that the increase in 2011 was most likely influenced by the anticipation of changes in the 2011 Leahy-Smith America Invents Act (AIA), which made several significant changes to the U.S. patent system, including limiting the number of defendants in a lawsuit, causing some plaintiffs that would have previously filed a single lawsuit with multiple defendants to break the lawsuit into multiple lawsuits. In addition, GAO's detailed analysis of a representative sample of 500 lawsuits from 2007 to 2011 shows that the number of overall defendants in patent infringement lawsuits increased by about 129 percent over this period. These data also show that companies that make products brought most of the lawsuits and that nonpracticing entities (NPE) brought about a fifth of all lawsuits. GAO's analysis of these data also found that lawsuits involving software-related patents accounted for about 89 percent of the increase in defendants over this period.

Stakeholders knowledgeable in patent litigation identified three key factors that likely contributed to many recent patent infringement lawsuits. First, several stakeholders GAO interviewed said that many such lawsuits are related to the prevalence of patents with unclear property rights; for example, several of these stakeholders noted that software-related patents often had overly broad or unclear claims or both. Second, some stakeholders said that the potential for large monetary awards from the courts, even for ideas that make only small contributions to a product, can be an incentive for patent owners to file infringement lawsuits. Third, several stakeholders said that the recognition by companies that patents are a more valuable asset than once assumed may have contributed to recent patent infringement lawsuits.

The judicial system is implementing new initiatives to improve the handling of patent cases in the federal courts, including (1) a patent pilot program, to encourage the enhancement of expertise in patent cases among district court judges, and (2) new rules in some federal court districts that are designed to reduce the time and expense of patent infringement litigation. Recent court decisions may also affect how monetary awards are calculated, among other things. Several stakeholders said that it is too early to tell what effect these initiatives will have on patent litigation.

The U.S. Patent and Trademark Office (PTO) has taken several recent actions that are likely to affect patent quality and litigation in the future, including agency initiatives and changes required by AIA. For example, in November 2011, PTO began working with the software industry to develop more uniform terminology for software-related patents. PTO officials said that they generally try to adapt to developments in patent law and industry to improve patent quality. However, the agency does not currently use information on patent litigation in initiating such actions; some PTO staff said that the types of patents involved in infringement litigation could be linked to PTO's internal data on the patent examination process, and a 2003 National Academies study showed that such analysis could be used to improve patent quality and examination by exposing patterns in the examination of patents that end up in court.

Why GAO Did This Study

Legal commentators, technology companies, Congress, and others have raised questions about patent infringement lawsuits by entities that own patents but do not make products. Such entities may include universities licensing patents developed by university research, companies focused on licensing patents they developed, or companies that buy patents from others for the purposes of asserting the patents for profit.

Section 34 of AIA mandated that GAO conduct a study on the consequences of patent litigation by NPEs. This report examines (1) the volume and characteristics of recent patent litigation activity; (2) views of stakeholders knowledgeable in patent litigation on key factors that have contributed to recent patent litigation; (3) what developments in the judicial system may affect patent litigation; and (4) what actions, if any, PTO has recently taken that may affect patent litigation in the future. GAO reviewed relevant laws, analyzed patent infringement litigation data from 2000 to 2011, and interviewed officials from PTO and knowledgeable stakeholders, including representatives of companies involved in patent litigation.

What GAO Recommends

GAO recommends that PTO consider examining trends in patent infringement litigation and consider linking this information to internal patent examination data to improve patent quality and examination. PTO commented on a draft of this report and agreed with key findings and this recommendation.

For more information, contact Frank Rusco at (202) 512-3841 or"

Copyright © 2013 Robert Moll. All rights reserved.

Monday, August 19, 2013

Professor Richard Epstein's Trolling for "Patent Trolls"

NYU Law School Professor Richard Epstein's article Trolling for "Patent Trolls" is a refreshing contrast to the recycled articles attacking patent assertion entities (PAEs).

The White House Task Force report (see post on White House plan) claims the patent system is seriously flawed and in need of prompt corrective action, but the article notes the report has quite the shaky foundation: (1) claiming only those practicing an invention can license or enforce patent rights; (2) relying on Bessen, Ford and Meurer's incomplete economic study; (3) assuming litigation abuse is a one-way street; (4) failing to recognize inventors opposed the America Invents Act that was so strongly supported by large corporations; and (5) assuming the high cost of patent litigation should not be addressed by changes to civil procedure (e.g., limiting discovery) affecting both parties.

Professor Epstein concludes the "President should back off his one-sided critique and work to create a more balanced and nuanced reform agenda of the patent system." Sage advice, but I am not sure the President and Congress are listening as it is time to do something (almost anything) to "kill the patent troll beast."

Copyright © 2013 Robert Moll. All rights reserved.

Thursday, August 15, 2013

Use of Copyrighted Articles in Prosecuting Patent Applications is Fair Use

In American Institute of Physics v. Schwegman Lundberg & Woessner, the District Court of Minnesota recommended granting of summary judgment that use of copyrighted articles to prosecute patent applications is a fair use. Note fair use is a defense to a charge of copyright infringement. Section 107 of the 1976 Copyright Act, states four factors to consider if fair use exists: (1) the purpose of the accused use; (2) the nature of the copyrighted work; (3) the proportion of the whole work used; and (4) the effect of the use on the potential market for the copyrighted work.

The court stated the law firm’s purpose in copying the articles was to meet legal requirements of disclosing non-patent prior art to the USPTO. This contrasts with the copyright owner's primary purpose to publish research and discoveries to the scientific community. Although the whole work was used, the court found no evidence the use impacted the current or potential market of the copyrighted works. The court's opinion appears well reasoned, but the publisher may have too much at stake to not appeal. Because we don't know if this matter is resolved, patent attorneys may want to limit printing and copying of non-patent literature.

Copyright © 2013 Robert Moll. All rights reserved.

Wednesday, August 14, 2013

Bill Gates - American Inventor

Many would credit Steve Wozniak and Steve Jobs with bringing desktop computers to the world, but Bill Gates also deserves credit in establishing the PC industry. He has been such a fixture that I was initially surprised when he stepped back from his full-time role at Microsoft to establish the Bill and Melinda Gates Foundation. Sure it might help solve pressing issues like malaria, tuberculosis, and clean water in developing countries, but I was concerned if Microsoft would be the same after he stepped away in 2006. Well history shows when he resigned as Microsoft's CEO in 1999 Microsoft was a $600 billion company and today it is $270 billion. But then I realized who can criticize his desire to help others? Certainly it appears to be the right decision since the Gates Foundation has made real progress in addressing these problems.

Less known is Mr. Gates has also been inventor since leaving his day-to-day role at Microsoft, mostly working with friends at Intellectual Ventures. I find that hard to criticize, but one article has spun this as Bill Gates still helping known patent trolls obtain more patents. Does anyone think he is interested in helping a patent troll get more patents in his "spare" time? Couldn't we give him the benefit of a doubt that he is engaging in creative thinking on how to help the world in this context? For some the answer is yes and no, because they see every bit of news as supporting their presumptions.

Copyright © 2013 Robert Moll. All rights reserved.

Saturday, August 10, 2013

ITC Excludes Samsung Products Infringing Apple Patents on August 9, 2013

On August 9, 2013, the ITC issued an order to exclude and a cease and desist order on the further importation, sale, and distribution of certain Samsung products because they infringe U.S. Patent No. 7,912,501, entitled, Audio I/O headset plug and plug detection circuitry, U.S. Patent No. 7,479,949 B2, entitled, Touch screen device, method, and graphical user interface for determining commands by applying heuristics.

It was not a complete sweep for Apple given the ITC found no infringement of Design Patent No. D618678 that relates to the appearance of the iPhone, Design Patent No. D558757 that relates to the appearance of the iPod Touch and iPad, and US Reissue Patent No. RE41922, entitled, Method and apparatus for providing translucent images on a computer display. The ITC also found U.S. Patent No. 7,789,697, entitled, Plug detection mechanisms invalid as anticipated by the prior art.

The order is stayed for 60 days pending President Obama's review. That review is likely to be politically charged in view of the Obama Administration's veto of Samsung exclusion order last week. Perhaps the prior Administrations were wise to not interfere with ITC over the last three decades. Now that the Obama Administration has taken on the rarified role of "second guessing" the ITC, others may be justified in guessing whether or not this has anything to do with Samsung's status as a foreign company.

Copyright © 2013 Robert Moll. All rights reserved.

Friday, August 9, 2013

US Design Patents - Increasing Value Today

Here's an interesting article that focuses on the increasing value of U.S. design patents in the mobile computing patent wars: Apple-Samsung dispute raises profile of design patent litigation.

Note Morgan Chu mentioned in the article is one of the most highly respected trial lawyers in the US today.

Copyright © 2013 Robert Moll. All rights reserved.

Sunday, August 4, 2013

Innovatio's Wi-Fi Patent - Are We Infringing Tonight?

Some might say this case is not about innovation. That's right it's Innovatio! It's late so just a pointer: Chicago Lawyer article Wi-Fi case sheds light on patent trolls. Is it time to intervene and/or indemnify the countless Wi-Fi users?

Copyright © 2013 Robert Moll. All rights reserved.

Saturday, August 3, 2013

Obama Administration Vetoes ITC's Ban of Older Apple iPhones and iPads

Today, the Obama Administration vetoed the International Trade Commission's (ITC) ban of Apple's infringement of Samsung's standard essential patent.

As background in June 2013, the ITC ordered a ban of AT& T's model of Apple's iPhone 3, iPhone 3GS, iPhone 4, the iPad 3G, and iPad 2 based on infringement of Samsung's U.S. Patent No. 7,706,348. Apple was faced with the ITC ban, an appeal to the Federal Circuit, or a request for the President to veto the ban. The last time a President vetoed an ITC order was in the 1980's so it seemed an appeal to the Federal Circuit was the likely next step.

However, U.S. Trade Representative Michael Froman decided to veto the ITC ban expressing the "concern that a ban on Apple's products would abuse Samsung's right to the essential patent, which involves encoding and decoding information on a CDMA cell phone network." Mr. Froman warned the ITC should carefully examine if a ban based on a standard essential patent serves the public interest before granting it. This is an unexpected setback for Samsung which now must seek a remedy in federal court.

For further details see Mr. Froman's letter explaining the decision and Older iPhones won't be banned as Obama Administration vetoes ITC decision.

Updated August 5: Obama administration may have overturned the ITC ban due to reasons presented in ITC commissioner Dean Pinkert's dissent. See CNN Money How the ITC forced a veto in the Samsung-Apple patent case. Also see FOSS Patents One ITC chief found Samsung to fail to offer Apple FRAND licensing terms to its UMTS patents.

Copyright © 2013 Robert Moll. All rights reserved.