Patent Planet's Most Popular Posts - December 2011 - 2012

Almost midnight in Los Altos, California. I am struggling with the task of writing up a summary of the most important patent news in 2012. Hmm lots of material to consider (212 published posts plus 11 draft posts). Finally, I decided to take the easier route: let Blogger Stats do the work. Yes, that's my ticket out of here!

Based on total pageviews - the top ten posts on Patent Planet from December 2011 - 2012:

1. WildTangent v. Ultramercial - Supreme Court Rejects Federal Circuit Decision on 35 USC 101

2. Failure to Patent Mark - Losing Easy Money

3. Third Party Preissuance Submissions of Prior Art

4. The Banana Grab - Market Share Can Change

5. Patent Reexamination Has Arrived for Both Parties - Oracle v. Google

6. America Invents Act - Ex Parte Reexamination Fees Increase & Inter Partes Review Replaces Inter Partes Reexamination on September 16, 2012

7. Board of Patent Appeals Backlog Enormous and Growing

8. USPTO Satellite Office in San Jose Delayed

9. Richard Stallman and Professor Duffy Clash - Solutions to the Software Patent Problem - Santa Clara University - November 16, 2012

10. America Invents Act - Final Rules for Third Party Preissuance Submissions

Happy New Year!

Copyright © 2012 Robert Moll. All rights reserved.

USPTO Annual Report 2012

The USPTO released its annual report: USPTO Performance and Accountability fiscal year 2012 on it's strategy, operation and performance.

Here are some findings from the report:

The patent applications filed have mostly increased the last five years (FY 2008 - 496,886, FY 2009 - 486,499, FY 2010 - 509,367, FY 2011 - 537,171, and FY 2012 - 565,406).

The total backlog of over a million applications pending is basically undiminished from 2008 to 2012.

The approach of increasing the number of examiner (e.g., 7,935 examiners in FY 2012) has reduced the backlog of cases awaiting a first action from about 750,000 in FY 2008 to about 600,000 in FY 2012.

The first action pendency was 21.9 months in FY 2012, which although not "fast" looks good compared to FY 2011 - 28 months, FY 2010 - 25.7 months, FY 2009 - 25.8 months, and FY 2008 - 25.6 months.

The 12 month rolling average allowance rate is 51% in September 2012 which is higher than the same allowance rate of 44% in October 2008.

The total patent pendency FY 2012 - 32.4 months, the result of a decrease the last few years, matches FY 2008 - 32.2 months.

Copyright © 2012 Robert Moll. All rights reserved.

USPTO Opens Patent Prosecution Highway with Taiwan Intellectual Property Office

On December 21, 2012, the USPTO announced its Patent Prosecution Highway (PPH) partnership with the Taiwan Intellectual Property Office.

The USPTO says, "Under the Patent Prosecution Highway (PPH), an applicant receiving a ruling from the Office of First Filing (OFF) that at least one claim in an application filed in the OFF is patentable may request that the Office of Second Filing (OSF) fast track the examination of corresponding claims in corresponding applications filed in the OSF. PPH will leverage fast-track examination procedures already available in the OSF to allow applicants in the OSF to obtain corresponding patents faster and more efficiently."

Note on May 25, 2010, the USPTO eliminated the fee for a petition to make special under PPH so it sounds like a good deal.

However, I am not sure how certain circumstances would play out under the US-Taiwan PPH partnership, because PPH is not mentioned in 37 CFR nor in Title 35. For example, if you initially file in the USPTO then file in Taiwan can you use a favorable Taiwanese ruling to fast track the US prosecution (i.e., swap who is the first Office)? This would be desirable, given the USPTO is backlogged and Taiwan is not a member of the PCT and requires a Taiwanese filing within 12 months of the US filing date. Admittedly this issue may only pertain to this PPH partnership because other partnerships among PCT members permit a second application filing up to 30 months from the priority date.

PPH seems to assume participating countries have similar patentability standard. Otherwise, why fast track examination of one country's application based on another country's patentability rulings? Yet even the USPTO and EPO have important differences especially on patentability of software related invention.

In addition, the USPTO has high standards on the content of applicant's petition to expedite examination of an application. Given this is it factually correct to say all claims of a second application "correspond" to a single allowable claim in a first filed application? PPH seems to stretch the term "correspond." Is it a problem? What if the applications overlap but are not identical? Could a defendant successfully argue applicant's statement that claims correspond is false rendering the US patent unenforceable in court? I am not sure and litigation is a harsh place to find out.

Copyright © 2012 Robert Moll. All rights reserved.

Apple v. Samsung - European Commission Accuses Samsung of Patent Abuse

Today, the BBC reports EU accuses Samsung of  patent abuse in Apple lawsuits. Note this is the European Commission's preliminary view and a final ruling will issue after Samsung presents its defense.

Thanks to Alan Cooper for forwarding this article just now.

Copyright © 2012 Robert Moll. All rights reserved.

Nokia and RIM Settle All Patent Disputes

Nokia and RIM enter into new patent license agreement.

Not much detail in the press release, but sounds like Nokia owner of 10,000 patent families is the winner. "The financial structure of the agreement includes a one-time payment and on-going payments, all from RIM to Nokia." 

I expect more patent settlements of a global nature in 2013. Companies have gotten over the hurdle of thinking they can use other companies patents without a license and are well aware of the expense of patent litigation.

Copyright © 2012 Robert Moll. All rights reserved.

CLS Bank v. Alice Corp. - US Government's Amicus Brief Addressing Software Patents

On December 9, I posted CLS Bank v. Alice Corp. - Amici Briefs Addressing Software Patents that gave links to Google et al. and EFF's amici briefs that attempt to guide the Federal Circuit on the topic of software patent eligibility.

Today, Professor Crouch states in his article Patenting Software: Obama Administration Argues "Sometimes" that the United States amicus brief "rejects the idea that software per se represents patentable subject matter but is favorable toward the patenting of computerized applications that either improve computer performance, use technology in a unique technologic way, or transform the local environment." The U.S. brief "suggests a claim-by-claim subject matter analysis that begins with claim construction and only then asks whether the challenged claim, properly construed, incorporates enough meaningful limitations to ensure that it amounts to more than a claim for the abstract idea itself."

Professor Crouch notes the U.S. brief lists "factors that the government sees as important in making that determination:

• Is the computer only nominally or tangentially related to the performance of the invention?

• Is the computer generically recited or, instead are specific, unconventional computer equipment or tools required?

• Is the invention focused primarily on non-technological fields or does the invention improve the ability of a computer to function as a computer?

• Is the computer used generically for its automation or communication functions or does the computer manipulate particular data in particular, specific, and useful ways?

• Is the abstract idea merely described within a particular environment or is the abstract idea part of an invention that transforms its environment.

• Are the computer related elements merely conventional steps described at a high level of generality in a way that would be employed by anyone wanting to apply the abstract idea." 

About the USPTO supporting this brief, I couldn't help but notice how the brief compares to outgoing United States Patent and Trademark Office Director Kappos recent speech about software patents where he addressed the question 'should we treat software differently than hardware when it comes to patentability?' His answer: 'No. Absolutely not."

To this I add a few observations on the proposed test and factors:

• The U.S amici brief is designated as not in favor of either party, but seems to favor the defendant when you consider how the factors might apply to the representative claim 1:

       1. A data processing system to enable the exchange of an obligation between parties, the system comprising:

       a data storage unit having stored therein information about a shadow credit record and shadow debit record for a party, independent from a credit record and debit record maintained by an exchange institution; and

       a computer, coupled to said data storage unit, that is configured to (a) receive a transaction; (b) electronically adjust said shadow credit record and/or said shadow debit record in order to effect an exchange obligation arising from said transaction, allowing only those transactions that do not result in a value of said shadow debit record being less than a value of said shadow credit record; and (c) generate an instruction to said exchange institution at the end of a period of time to adjust said credit record and/or said debit record in accordance with the adjustment of said shadow credit record and/or said shadow debit record, wherein said instruction being an irrevocable, time invariant obligation placed on said exchange institution.

• What unconventional computer equipment or tools do you require for patent eligibility?

• Trying to resolve whether a claim is too abstract by analyzing if the computer is only nominally or tangentially related to the performance of the invention may engender arguments: "my client's invention is substantially and directly related to the performance of the invention," to which the defendant replies "it is not" and "it is too!"

• The only way to avoid falling into a non-technological field is to improve the ability of a computer to function as a computer? Computer performance based patent eligibility? And in terms of improving the ability, doesn't software improve the ability of a general purpose computer to function as a computer? If we mean only hardware performance doesn't this eliminate many software patents and much of the subject matter described in U.S. Patent Class 707 Data Processing: Database and File Management, Data Structures, or Document Processing? 

• Is the computer used generically for its automation or communication functions or does the computer manipulate particular data in particular, specific, and useful ways? Referring to the first condition, computer software is often used for "automation" and "communication" functions so it sounds like many software patent claims would be ineligible. On the other hand, the second condition implies a claim need only recite the software manipulates particular data in a particular, specific and useful way. Thank God, my software doesn't manipulate just any old data, it's particular, yes and it's not manipulating non-particular data in a non-useful way either. Good, my patent claim must be eligible! But wait my claim also involves automation and communication, now what? 

• Is this abstract idea merely described within a particular environment or is the abstract idea part of an invention that transforms its environment. Now you have me confused ... I thought abstract meant not patent eligible and not abstract meant eligible. But now you tell me it is all about transforming the environment, and doing it in a particular environment is not going to help out? I must transform the environment? Okay,  how about this: my computer software runs on a bunch of servers that kick out a lot of heat. Doesn't raising the temperature in my server room transform (i.e., cold to hot) the environment? What's transform mean again? 

The problem is these factors shift the focus away from the fundamental question on whether the subject matter is abstract (patent ineligible) or not abstract (patent eligible).

Maybe we should return to the Inventions Patentable statute, 35 USC 101, that Judge Giles Rich and P.J. Federico drafted in 1952: Whoever invents or discovers any new and useful process, machine, manufacture ... or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." No, we can't do that - it's much too simple.

Copyright © 2012 Robert Moll. All rights reserved.

FTC and DOJ Workshop - Patent Assertion Entities - Revisited

On November 25, 2012, I posted an article that the FTC and DOJ was hosting a free workshop on December 10 to consider the impact of patent assertion entities (PAEs) on innovation and competition and if the PAEs raise antitrust issues.

If you are interested in what leading academics, attorneys, economists, and industry representatives had to say, please see their videos and slide presentations at the Patent Assertion Entity Activities Workshop Page.

Copyright © 2012 Robert Moll. All rights reserved.

Europe Patent System - Unitary Patent and Patent Court

Today, the European Parliament approved a patent package that includes a unitary patent, a language regime, and a unified patent court. The unitary patent would give protection in 25 EP member states. The application would be in English, French, German, or require translation into one of these languages. The unified patent would be enforced in one of a set of trial courts. This patent package would enter into force on January 1, 2014 or after the United Kingdom, Germany, and France and ten other countries ratify the package, whichever is latest. It's hard to predict if this package will be ratified given Europe's debate on this topic for over 30 years. However, if  it's ratified, it's expected to reduce the large cost of patent protection in Europe up to 80%. Spain and Italy are outside this regime but may join later.

See the EP press release: Parliament approves EU unitary patent rules

See ars technica: After decades of discussion, EU votes for unified patent system

See NY Times: Europe Reaches Agreement on System for Patents

Copyright © 2012 Robert Moll. All rights reserved.

CLS Bank v. Alice Corp. - Amici Briefs Addressing Software Patents

Software patent eligibility is a controversial topic today. 

The Federal Circuit opinions in July 2012: CLS Bank International v. Alice Corporation in favor of patent eligibility and Bancorp Services v. Sun Life Assurance Company of Canada against patent eligibility highlight this controversy.

The Federal Circuit granted CLS Bank International's petition for a rehearing en banc, vacated the decision on software patent eligibility, reinstated the appeal, and invited the parties and amici to file briefs addressing the following questions:

a. What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible "abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?

b. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?

Now the amici briefs are arriving. On December 6, King & Spalding filed an amicus brief on behalf of some leading tech companies: Google Inc., Dell Inc., Facebook, Inc., Homeaway, Inc., Intuit Inc., Rackspace Hosting, Inc. Red Hat, Inc., and Zynga Inc. at the Court of Appeals for Federal Circuit.

See the Google et al. brief as well as the Electronic Frontier Foundation's brief in the Wall Street Journal AllThingsD.com article: Facebook, Google and Others Rally Against Sweeping Claims in Financial Patent Case. Thanks to Alan Cooper for sending this article!

For details see my earlier post: CLS Bank v. Alice - Federal Circuit Revisits Test for Software Patent Eligibility

Copyright © 2012 Robert Moll. All rights reserved.

Patent Law Treaty and Hague Agreement Regarding International Registrations of Industrial Designs

On December 5, the House of Representatives passed S. 3486 to implement the Hague Agreement Concerning Industrial Designs Patent Law Treaty (Hague Agreement) and the Patent Law Treaty (PLT). The bill awaits President Obama's signature.

The Hague Agreement lengthens the current design patent term from 14 to 15 years from the grant date. It also allows filing for protection of up to 100 designs in a single application at the USPTO as long as in the same classification under Locarno Agreement to obtain design protection in all countries that adopt the treaty. Note this is expect to help protect design owners against knockoffs. Further, it retains the current nonobvious requirement for design patents, which patent scholar Harold Wegner suggests is inconsistent with TRIPS. A request and payment at WIPO's International Bureau will renew a design registration. The bill will add Chapter 38 International Design Applications, 35 USC 381-390.

The PLT amends 35 USC 111(a) to reduce some requirements for a nonprovisional to get a filing date. For example, a nonprovisional application will no longer require at least one claim for a filing date, but still requires payment of fees, an oath or declaration, and at least one claims within the time set by the Director to avoid abandonment.

Under new 35 USC 111(c), the Director may prescribe the conditions for filing an application with a reference to a prior filed application, but will abandon an application for failure to submit a specification within the prescribed period.

Updated February 11, 2014: The Patent Law Treaties Implementation Act of 2012.

Copyright © 2012 Robert Moll. All rights reserved.

America Invents Act - Proposed Bill H.R. 6621 Technical Amendment to AIA

On November 30, Congressman Smith introduced a bill H.R. 6621 to change language in the America Invents Act (AIA).

Some refer to it as a "technical amendment" that corrects errors in the AIA. However, it buries a provision that will eliminate many if not all pre-GATT applications (i.e., about 200 applications filed before June 7, 1995) if they fail to issue as US patents within one year of the bill's enactment. It does this by rendering them ineligible for a patent term that runs 17 years from grant date. Instead their patent term would only run 20 years from filing date. Even if only 0.02% of all pending applications (e.g., 1.2M) are affected, it sounds like some want to eliminate or greatly reduce their patent terms. Do the math!

On the other hand, it doesn't seek to change the estoppel standard for post grant review, which is wise given the arguments raised in its favor. See e.g., Robert L. Stoll, Maintaining Post-Grant Review Estoppel in the America Invents Act: A Call for Legislative Restraint.

Copyright © 2012 Robert Moll. All rights reserved.

Jeruss - Effects of Patent Monetization Entities on US Litigation

In The America Invents Act 500: Effects of Patent Monetization Entities on US Litigation Sara Jeruss of Lex Machina Inc., Robin Cooper Feldman of University of California Hastings College of the Law, Joshua H. Walker of Simpson Thacher & Bartlett LLP, Stanford Law School wrote an interesting paper that will be published in Duke Law & Technology Review.

The article explores non-practicing entities (NPE) or patent trolls or what they call patent monetizers affect on U.S. patent litigation. Although Professor Feldman is not the lead author, it bears her signature in terms of meticulous research, transparent assumptions, and careful conclusions.

The article flowed out of Congress' mandate for the Government Accountability Office (GAO) to study the effects of non-practicing entities on patent litigation. Using Lex Machina's database they collected and coded a set of patent lawsuits filed over the past five years then analyzed what it meant.

Key findings? Patent monetizers' lawsuits increased from 22% to nearly 40% of the cases in the last five years. Universities are not that big of a player, accounting for only 0.2% of the lawsuits. Patent monetizers tend to settle prior to a summary judgment decision, which points to what may be involved. Even though it calls NPE's "modern villains" of the system, it doesn't resolve for me whether patent monetizers are bad or good for the US, but does confirm their rising participation in patent litigation.

Copyright © 2012 Robert Moll. All rights reserved.