PTAB - Administrative Patent Judges Message on Patent Owner's Preliminary Response in an Inter Partes Review

Administrative Patent Judges Sheridan Snedden and Jacqueline Bonilla had the following message on the America Invents Act web page regarding patent owner's preliminary response in an inter partes review proceedings before the Patent Trial and Appeal Board (PTAB):

"Inter partes review (IPR) proceeding provides an opportunity to challenge the patentability of claims in an issued patent for anticipation or obviousness under 35 U.S.C. §§ 102 and 103, respectively, based on prior art patents or printed publications.  An IPR proceeding is conducted before the Patent Trial and Appeal Board and is divided into two stages:  (i) a preliminary stage; and (ii) a trial stage.  The preliminary stage begins with the filing of a petition to institute a trial.  To proceed to the trial stage, a petition must demonstrate that there is a reasonable likelihood that the petitioner would prevail as to at least one of the challenged claims.  A patent owner has a waivable right to file a preliminary response to the petition setting forth reasons why trial should not be instituted.  The preliminary stage ends with a decision from the Board on whether to institute a trial.

A preliminary response provides a patent owner with an opportunity to be heard before the Board decides whether to institute trial.  If the petition does not meet the standard set for instituting a trial, the petition will be denied, regardless of a preliminary response.  That said, a preliminary response may help the Board when deciding whether to institute a trial.  To provide the most benefit, a preliminary response should identify clear procedural and substantive reasons why the petition should be denied.  To follow is a discussion of potential arguments that a patent owner might raise in a preliminary response, if appropriate, to help the Board’s consideration.

Petitioner Is Statutorily Barred from Pursuing an IPR

A preliminary response may challenge the standing of a petitioner under 35 U.S.C. 315.

Under 35 U.S.C. 315(a)(1), a patent owner may provide evidence that the petitioner filed a civil action challenging the validity of a claim of the patent, e.g., in a declaratory judgment action in district court, prior to filing the petition.  Such action by the petitioner bars the institution of an IPR under 35 U.S.C. § 315(a)(1).  Board decisions providing guidance on the application of § 315(a)(1) include the following:

• Anova Food, LLC v. Sandau, IPR2013-00114, Paper No. 17 (PTAB) (a civil action for a declaratory judgment dismissed with prejudice filed by a predecessor-in-interest to the petitioner bars an IPR under § 315(a)(1)).
• Cyanotech Corporation v. The Board Of Trustees of the University of Illinois, IPR2013-00401, Paper No. 30 (PTAB) (a civil action involuntarily dismissed without prejudice does not bar an IPR under § 315(a)(1)).
• Clio v. The Procter and Gamble Co., IPR2013-00438, Paper No. 9 (PTAB) (a civil action voluntarily dismissed without prejudice does not bar an IPR under § 315(a)(1)).
• Ariosa Diagnostics v. Isis Innovation Ltd., IPR2012-00022, Paper No. 24 (PTAB) (a civil action for a declaratory judgment of non-infringement is not a civil action challenging the validity of a patent barring an IPR under § 315(a)(1)).

Alternatively, a patent owner may provide evidence that the petitioner is barred from challenging the patent owner’s claims under 35 U.S.C. § 315(b).  As outlined in § 315(b), the Board may not institute an IPR if the petition was filed more than one year after the petitioner, real party in interest, or a privy, was served with an infringement complaint.  Board decisions providing guidance on the application of § 315(b) include the following:

• Macauto U.S.A. v. BOS GmbH & KG, IPR2012-00004, Paper No. 18 (PTAB) (a dismissal without prejudice nullifies the effect of service for purposes of § 315(b)).
• St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., IPR2013-00258, Paper No. 29 (PTAB) (a counterclaim is a “complaint alleging infringement of the patent” within the meaning of § 315(b)).
• Accord Healthcare v. Eli Lilly and Co., IPR2013-00356, Paper No. 13 (PTAB) (service of a second complaint does not nullify the effect of a first served complaint for purposes of § 315(b)).
• BioDelivery Sciences Int’l, Inc. v. MonoSol RX, LLC, IPR2013-00315, Paper No. 31 (PTAB) (challenged claims amended by a reexamination certificate issued after service of the complaint does not affect the “date on which the petitioner . . . is served with a complaint alleging infringement of the patent” under § 315(b)). 

Highlight Weaknesses in Petitioner’s Case of Unpatentability

The Board may not authorize a trial where the information presented in the petition fails to meet the requisite standard for instituting a trial—that is, fails to establish a reasonable likelihood that the petitioner would prevail with respect to at least one of the challenged claim.  35 U.S.C. § 314(a).  Thus, it is helpful to the Board if a preliminary response explains carefully the weakest parts of petitioner’s unpatentability positions.  For example, the preliminary response may include a detailed discussion or technical analysis relating to:

• How any asserted references are not, in fact, prior art;
• How asserted references lack at least one material limitation in one or more challenged claims; or
• How an asserted reference teaches away from a combination of elements, as advocated by petitioner.  See, e.g., Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., IPR2013-00132, Paper No. 9 (PTAB). 

Petitioner’s Claim Construction is Improper

In an IPR proceeding, the Board construes claim terms according to their broadest reasonable construction in light of the specification of the patent in which they appear.  37 C.F.R. § 42.100(b); Office Patent Trial Practice Guide (“Trial Practice Guide”), 77 Fed. Reg. 48756, 48766 (Aug. 14, 2012).  Using this standard, a preliminary response may help the Board by carefully explaining claim construction positions.  The patent owner may wish to point to the specification, dictionary definitions, as well as logic in relation to the claims as a whole, to support a conclusion that petitioner’s claim construction is, for example, unreasonably broad.  In interpreting claims, however, one must take care to note the fine line between interpreting claims in light of the specification and improperly reading limitations into the claims from the specification.  Absent claim language carrying a clear narrow meaning, the Board will not limit a claim based on the specification unless it expressly disclaims the broader definition.  See, e.g., Ariosa Diagnostics, Inc. v. Verinata Health, Inc., IPR2013-00277, Paper No. 10 (PTAB).

Petition Contains Prior Art or Arguments Were Previously Presented to the Office.

Under 35 U.S.C. § 325(d), a preliminary response may wish to address whether the same or substantially the same prior art and arguments were previously presented to the Office.  Board decisions providing guidance on the application of § 325(d) include the following:

• SAS Institute, Inc. v. Complementsoft, LLC, IPR2013-00581, Paper No. 15 (PTAB) (denying a petition as to grounds based upon substantially the same prior art and arguments as set forth in a prior IPR petition).
• Oracle Corporation v. Clouding IP, LLC, IPR2013-00100, Paper No. 8 (PTAB) (granting a petition where new arguments and supporting evidence were presented that shed a different light on references previously considered during prosecution).

Petition Fails To Identify All Real Parties-in-Interest

Under 35 U.S.C. § 312(a)(2) and 37 CFR § 42.8, an IPR petition must identify all real parties-in-interest or privies.  A preliminary response may help the Board by pointing out how the petition fails to identify all real parties-in-interest.  The Trial Practice Guide provides guidance regarding factors to consider in determining whether a party is a real party-in-interest.  Whether a non-party is a “real party-in-interest” or “privy” is a “highly fact-dependent question” that takes into account how courts have used the phrases generally to “describe relationships and considerations sufficient to justify applying conventional principles of estoppel and preclusion.”  Trial Practice Guide, 77 Fed. Reg. at 48759.  One consideration is whether a non-party exercises, or could have exercised, control over a petitioner’s participation in an IPR proceeding.  Id. at 48759-60, 48695.  Other considerations may include whether a non-party, in conjunction with control, funds and directs the proceeding.  Id. at 48760.  Board decisions providing guidance on real party-in-interest or privy include the following:

• Butamax™  Advanced Biofuels LLC v. Gevo, Inc., IPR2013-00214, Paper No. 11 (PTAB)(“‘common interest among litigation defendants seeking to invalidate or defend against enforcement of a patent . . . does not translate ipso facto into each defendant being a real party in interest where a request for reexamination is filed by only one of the defendants in the litigation’”) (citations omitted). 
• Chimei Innolux Corporation v. Semiconductor Energy Laboratory Co., Ltd., IPR2013-00068, Paper No. 7 (PTAB) (patent owner failed to provide persuasive evidence that each co-defendant in a related litigation exercised control and provided funding of the IPR petition).

Supporting Evidence for the Preliminary Response

The preliminary response may cite evidence supporting the patent owner’s contentions.  Such evidence may include previously existing declarations, trial testimony, deposition testimony, and expert reports.  A preliminary response may not, however, present new testimonial evidence (i.e., testimonial evidence prepared specifically for the purpose of the IPR proceeding) without authorization from the Board.  Additionally, flooding the Board with evidence in a preliminary response is not helpful.  Rather, a preliminary response should aid the Board in navigating evidence of record cleanly and quickly."

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - America Invents Act - First-Inventor-to-File Public Forum on March 17, 2014

Tonight, I want to pass on an invitation to a USPTO public forum to discuss the first-inventor-to-file provisions of the America Invents Act on March 17, 2014:

"The United States Patent and Trademark Office (USPTO) will host a public forum to discuss the first-inventor-to-file (FITF) provisions of the America Invents Act (AIA) on the first anniversary of the FITF implementation. The forum will be held on Monday, March 17, 2014, at the USPTO headquarters, Madison Auditorium, in Alexandria, Virginia from 12:30 to 5 pm ET.  Members of the public are invited to attend in person or via webcast (access information below).

The forum is intended to bring stakeholders together with USPTO subject matter experts to discuss the FITF provisions.  It will begin with a thirty-minute informal meet-and-greet session, allowing participants to chat with the experts, followed by an informational program covering the following topics:

• Review of FITF filings made to date
• Explanation of whether/when an application will be examined under the FITF statutory framework
• Overview of the FITF statutory framework and tips on responding to prior art rejections
• Tour of the AIA (FITF) website
• Q&A panel discussion

Pre-registration is not required; seating is first-come, first-served.  CLE is not available."

Webcast access instructions:

• Event number: 996 792 614
• Event password: 12345
• Event address:  https://uspto-events.webex.com/uspto-events/onstage/g.php?t=a&d=996792614

Copyright © 2014 Robert Moll. All rights reserved.

Federal Circuit - Elcommerce.com v. SAP - Evidence Required to Support Indefiniteness, 35 USC 112

In Elcommerce.com v. SAP, the Federal Circuit vacated a district court's holding system claims of US Patent No. 6,947,903, owned by Elcommerce, invalid for indefiniteness under 35 USC 112, because the defendant SAP (1) misinformed the district court the Federal Circuit does not require evidence on the knowledge of the technology by persons of skill in the field; and (2) declined to provide evidence of how such persons would view the description of "structure, materials, or acts" in the specification for performance of the functions recited in means-plus-function elements.

Claim 37 is representative of all of the system claims:

• means for extracting, at each supply chain site, the supply-related data to be monitored, wherein the data is maintained in plural formats located among the supply chain sites, at least one of the supply chain sites corresponding to an independent entity in the supply chain, being independent of another supply chain site;
• means for translating the data to a common format;
• means for uploading and collecting, from each supply chain site, the extracted data to a data collection site;
• means for formatting, at the data collection site, a portion of the collected data, retrieved from at
• least one of the supply chain sites other than the site of the user, into one of a plurality of views, responsive to criteria selected by a user associated with a supply chain site, for presentation to the user, the portion of formatted data being dependent on access rights granted to the user’s supply chain site . . . .

The '903 patent col. 15 ll. 32–48 (emphases added).

SAP argued at the Markman hearing that such "means plus-function terms in the '903 patent do not have supporting 'structure or acts' in the specification, and argued that since such support is absent, SAP could satisfy its burden on indefiniteness without expert testimony or other evidence of the existing knowledge in the field of the invention. SAP urged that Federal Circuit precedent does 'not require' such evidence."

Elcommerce in turn argued "that determination of the adequacy of the supporting structure or acts is made from the viewpoint of persons of skill in the field of the invention, and that evidence of how such persons would view the description should be presented to the court."

During the Markman hearing the district court asked for such evidence:

'THE COURT: Well, what evidence is there of what a person of ordinary skill in the art would understand the structure as defined in the patent to be, what evidence is there of that?

SAP: Your Honor, we haven’t submitted a declaration or separate evidence from somebody of ordinary skill in the art who says, I read the patent and I don’t see any structure. We’re actually not required to do that and, under the case law, the Federal Circuit’s case law, as well as other cases interpreting it, that's not a requirement. We can simply point to the absence of structure and, if it's not there, it's not there."

SAP persisted that the Federal Circuit "does 'not require' evidence of how a person of ordinary skill would understand the patent. The record shows the judge’s concern with this decisional approach to complex technology:

THE COURT: How am I to determine what one of ordinary skill in the art would think?

SAP: Well, your Honor, that’s what I’m here to do is to try to convince you that all those things Mr. Benson pointed to, it’s not structure. He’s simply pointing to phrases in the patent that repeat the function and simply repeating the function and drawing a box around it doesn’t convert it into structure."

This court's inquiry continued at the Markman hearing. "SAP presented only attorney argument concerning the structure and acts set forth in the patent, and Elcommerce stressed that SAP bears the burden of proving invalidity of duly granted claims:

ELCOMMERCE: So, when SAP comes up here, they have to show you that one of ordinary skill in the art would not understand things like the DTE or the DCS or whatever structure we point to, would not be understood by one of ordinary skill in the art to perform the particular function. And they have presented zero evidence about how one of ordinary skill in the art would view what we've shown.

THE COURT: But, how do I determine what is understood by one skilled in the art?

ELCOMMERCE: You’d probably have to get somebody up in the box, that’s the witness box, raise their right hand and testify one way or another. That’s probably, that’s the only way that I know of doing this. To come in and just have a lawyer argue it, is not enough. This is to be determined in view of one of ordinary skill in the art. They have not submitted any declarations of any experts. They haven’t submitted declarations of one of ordinary skill in the art."

The Federal Circuit concluded:

"The district court rightly was concerned about what a person of skill in the art might make of the lengthy written description and flow-charts and the multiple claimed functions. The judge repeatedly asked for evidence of what such a person would understand in this particular setting. Instead of evidence, SAP submitted only attorney argument. The district court accepted SAP’s position that no external evidence was 'required' and could be relied upon to show how a person of ordinary skill would understand the descriptive text and flowcharts and diagrams in the patent. However, the adequacy of a particular description is a case-specific conclusion, not an all-purpose rule of law. Findings as to what is known, what is understood, and what is sufficient, must be based on evidence.

Without evidence, ordinarily neither the district court nor this court can decide whether, for a specific function, the description in the specification is adequate from the viewpoint of a person of ordinary skill in the field of the invention. We do not of course hold that expert testimony will always be needed for every situation; but we do hold that there is no Federal Circuit or other prohibition on such expertise. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993). The district court persistently asked for evidence and was given none. Without more SAP cannot overcome the presumption of patent validity.

We conclude that the district court erred in granting summary judgment without a proper evidentiary basis for its conclusion. The burden was on SAP to prove its case, and in the absence of evidence provided by technical experts who meet the Daubert criteria there is a failure of proof. Attorney argument is not evidence. We vacate the district court’s rulings on the system claims, and remand for application of appropriate evidentiary standards and judicial procedures."

Copyright © 2014 Robert Moll. All rights reserved.

Professor Lemley - Does "Public Use" Mean the Same Thing It Did Last Year?

Prior to the America Invents Act's effective date of March 16, 2013, 35 USC 102 states an inventor loses patent rights if the invention is in "public use" more than one year before the filing date. The purpose is to prevent too much delay (i.e., more than one year) in filing a US patent application while the invention is being commercially used.

In Does 'Public Use' Mean the Same Thing it Did Last Year?, Stanford Law Professor Mark Lemley makes a compelling argument that the AIA did not change the meaning of "public use" nor eliminate the rule of Metallizing Engineering v. Kenyon Bearing & Auto Parts.

The Metallizing case held that a secret commercial use is not prior art that bars a third party from obtaining a US patent, but does start the one-year grace period for the commercial user seeking the US patent. The PTO Examination Guidelines stating otherwise doesn't seem to squarely address how the AIA impacts Metallizing.

Professor Lemley appears to be right on the statutory interpretation of 35 USC 102 under the AIA despite other opinions in the USPTO Examination Guidelines (See America Invents Act - One Sale Bar, 35 USC 102), Bob Armitage, a principal AIA drafter, and Senator Kyl's staffer Joe Matal.

If Professor Lemley turns out to be wrong, the US patent system has handed out an incentive to commercially use inventions as trade secrets indefinitely until filing a patent application.

Copyright © 2014 Robert Moll. All rights reserved.

Federal Circuit - Lighting Ballast v. Philips - District Court Patent Claim Construction Entitled to No Deference on Appeal

In Lighting Ballast Control LLC v. Philips Electronics N.A. Corp., an en banc Federal Circuit held that claim construction is a question of law reviewed de novo (i.e., anew) on appeal.

Claim construction is often a pivotal event in patent litigation since it often determines if (1) a patent claim is infringed; and/or (2) the claim is valid. The Lighting Ballast case focuses on the standard of appellant review of trial court's claim construction established in Cybor v. FAS Technologies, which gives no deference to a trial court's claim construction.

Because of the Federal Circuit's high reversal rates of district court's claim construction, since the Cybor case was decided 15 years ago, some argued it was time for the Federal Circuit to reconsider its view. The Federal Circuit agreed and invited amicus curiae participation on the following questions:

(1) Should this court overrule Cybor?

(2) Should this court afford deference to any aspect of a district court’s claim construction?

(3) If so, which aspects should be afforded deference?

The Federal Circuit states the 21 amici briefs stated three general views:

The Federal Circuit states the first view "favored by Lighting Ballast is that the Cybor decision is incorrect and should be entirely discarded. Lighting Ballast argues that this court in Cybor misapplied the Supreme Court’s decision in Markman II, in that the Court had focused only on whether questions of patent claim construction are subject to jury trial, or whether this issue should be decided solely by a judge. These proponents state that the Court in Markman II, in deciding;the judge-jury question, did not change the traditional distinction between fact and law, recognized that there are factual aspects of claim construction, and did not address the standard of appellate review."

The Federal Circuit states the second view "favored by some amici curiae including the United States, may be viewed as a fusion or hybrid of de novo review and deferential review. These proponents acknowledge that the Court in Markman II described patents as “legal instruments” and stated that interpretation of patent claims is a “purely legal” matter, 517 U.S. at 391, but argue that the correct appellate approach is for the factual aspects of claim construction to be reviewed on the clearly erroneous standard, while the final conclusion receives review as a matter of law. Some of these amici suggest a solution whereby the standard of review would depend on whether the district court’s claim construction drew solely from the record of the patent and its prosecution history (called "intrinsic evidence"), or whether external information or witness testimony was presented in the district court (that is, "extrinsic evidence")."

The Federal Circuit said the third view "supported by some amici curiae, is that Cybor is both reasonable and correct in view of the Court’s rulings in Markman II. These proponents stress the Court’s statements that claim construction is a 'purely legal' matter, 517 U.S. at 391, and that 'the interpretation of a so-called patent claim . . . is a matter of law,' id. at 372. They argue that de novo review of the scope and meaning of patent claims conforms to the rule that applies in all areas of law, that “interpreting a set of legal words . . . in order to determine their basic intent' is a 'purely legal matter.' Buford v. United States, 532 U.S.59, 65 (2001). They state that sufficient reason has not been shown to change this established and effective precedent in patent cases."

The Federal Circuit stated its own viewpoint:

"The question that this court has now reconsidered is whether we should continue to review claim construction as a whole and de novo on the record, or whether we should change to a different system that at best would require us to identify any factual aspects and how the trial judge decided them, and review any found or inferred facts not for correctness but on a deferential standard, with or without also giving deferential review to the ultimate determination of the meaning of the claims. We conclude that such changed procedure is not superior to the existing posture of plenary review of claim construction. Over these fifteen years this court has applied Cybor to diverse subject matter, and the body of precedent has grown large. Deferential review does not promise either improved consistency or increased clarity. We have been offered no argument of public policy, or changed circumstances, or unworkability or intolerability, or any other justification for changing the Cybor methodology and abandoning de novo review of clam construction. The proponents of overruling Cybor have not met the demanding standards of the doctrine of stare decisis. They have not shown that Cybor is inconsistent with any law or precedent, or that greater deference will produce any greater public or private benefit. We conclude that there is neither 'grave necessity' nor 'special justification' for departing from Cybor."

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Prior Art Used in Examination of Software-Related Patent Applications – Request for Comments Due March 14, 2014

On December 5, 2013, the USPTO held a software partnership meeting focusing on prior art used in examination of software-related patent applications. See Software Partnership and the Prior Art Federal Register Notice.

This is an important topic, because prior art tells us whether an invention is patentable. Under the America Invents Act (AIA), prior art has an intricate definition, but can be viewed as technology in the same field as the invention or reasonably pertinent to the problem addressed by the invention. When does this technology qualify as prior art? Under AIA, it's technology (short of inventor disclosures) prior to the filing date of any US patent application that cannot claim an effective filing date before March 16, 2013.

As a follow up on January 6, 2014, the USPTO published a Federal Register Notice that sets forth the following questions about prior art for public comment due March 14, 2014:

(1) What specific databases, Web sites, tools and other resources do you find useful in searching for software-related inventions? Please indicate the strengths and limitations of each resource.

(2) What are your concerns regarding the manner in which USPTO examiners formulate and implement search strategies to identify prior art for software related inventions? How should these concerns be addressed?

It will be interesting to see what tools and techniques people share in the public comments in response to question (1). Of course, it is cost effective to search using online databases and Google using keywords, images, and/or classification of the prior art in the US. If one wants to spend more, the search can be extended into other major patent countries or regions such as the Europe, and Japan as well as PCT applications.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Examination Guidance and Training Materials

The USPTO has published resources (PDF and Powerpoint slides) that should prove helpful to both applicants and examiners in working through Office actions.

For details see Examination Guidance and Training Materials that discusses:

• Guidelines for determining compliance with 35 USC 112, including identifying limitations that invoke 35 USC 112(f), means-plus-function limitations
• Evaluating subject matter eligibility under 35 USC 101
• Rules of Practice Before the BPAI in Ex Parte Appeals (also useful for PTAB)
• Examination Guidelines in view of KSR Int'l. Co. v. Teleflex Inc. (Obviousness)
• Best Practices in Compact Prosecution
• Interview Practice

Copyright © 2014 Robert Moll. All rights reserved.

Professor Feldman - Patent Trolling: Why Bio & Pharmaceuticals Are at Risk

In the study, Patent Trolling: Why Bio & Pharmaceuticals Are At Risk, Professor Feldman and Harvard Fellow Dr. Nicholson Price discuss patent trolls- also referred to as non-practicing entities, patent assertion entities, and patent monetizers- moving into the biotech, pharmaceutical, and life science industries.

The authors state highlights include:

"With the Association of University Technology Managers revisiting its policy against selling to NPEs, the authors considered whether universities could provide an extensive pool of ammunition for NPEs to launch against current products.

To supplement increasing anecdotal evidence that patent trolling is moving into bio and pharma, the authors examined the life science holdings of five major universities.We skimmed the patent holdings for four of the of five university systems with the highest number of patents issued in fiscal year 2011: the University of California system, the University of Texas system, MIT, and CalTech. We added as a wild-card the University of Southern Florida, the school among the top 10 in 2011 patent grants which had the lowest ratio of license revenues to research expenditures.

The study identified dozens of patents that could be deployed against current bio and pharm industries, following the patterns that NPEs have used against other industries. These include patents on drug formulas, methods of treatments, research methods, dosage forms, and others.

In deciding whether to undertake the study, the authors agonized over whether the potential for harm outweighed the potential benefit. After all, if reform efforts are not undertaken, the work could simply provide a handy road map for those who would follow.

Life sciences trolling is predictable and in its infancy, however. The study is intended to sound a warning bell."

Even if you are not the biotech or life science industries, the study gives insight into patent troll strategies.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Deputy Director Michelle Lee's Speech to AIPLA on January 30, 2014

On January 30, 2014, USPTO Deputy Director Michelle Lee delivered a state of the agency speech to a gathering at the 2014 Mid-Winter meeting of the American Intellectual Property Law Association (AIPLA), which is the largest organization of patent attorneys. I just read the speech, which is impressive and gives the USPTO's plans.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - US Residents Filing A Design Application under Hague Agreement?

Can US residents file an international application for a design patent?

When I first reviewed this question, I checked to see if the PCT allows for design patent applications. The PCT permits filing a single application in English that starts the process of seeking protection of the invention in many countries. Although not strictly a patent application, a PCT gives applicants an 18-month extension past the convention year to consider whether the cost of foreign filing is justified while keeping the benefit of the priority filing date.

However, the PCT does not permit filing a design application. Instead, an international design application must be filed under the Hague Agreement Concerning International Registration of Industrial Designs, 35 USC 381- 390, Title I of the Patent Law Treaty that President Obama signed into law on December 18, 2012.

It may appear a US resident can file a Hague application in the USPTO today, because 35 USC 382 states any person who is a national of the United States, has a domicile, a habitual residence, or a real and effective industrial or commercial establishment, may file an international design application in the USPTO.

However, a USPTO staff member informed he expects legislative processes to delay the ability for US residents to file Hague application until late 2014. First, the Senate must consent to a complete package of laws, since it's a Treaty. Although 35 USC 381-390 is law, the USPTO proposed rules are still open to public comments. The USPTO must review the comments and make any revisions to the proposed rules to produce the final rules. After this Senate consent requires Senate Foreign Relations Committee recommendation and 2/3 or more of Senators to vote in favor of the complete package.

Until that day, US residents may still file a Hague application in a country (i.e., Hague contracting state outside the US) if the applicant has a "real and effective industrial or commercial establishment" in the country. What's a real and effective industrial or commercial establishment is determined by that country's laws. It may not require applicant have its principal place of business in that country, but the more business activity in a country the more likely the Hague application will be valid. Thus, operation of a warehouse may not suffice, while a manufacturing factory might. A third party distributor or a subsidiary might not suffice, while applicant's sales office might. As was explained to me, "the establishment must be operated by the applicant, rather than merely with the applicant’s consent or approval" and not a "sham establishment." Finally, a Hague application on this basis would typically require engaging a foreign associate knowledgeable with the specific requirements of that country.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - How to Reduce the Backlog of Applications and Increase the Quality of US Patents - PTO Interviews

People frequently question the backlog of applications in the USPTO. Somehow hiring more examiners has not significantly reduced it. File an application and wait for at least a year or two for examination. It is particularly bad in the tech and software fields. Another question is how to improve patent quality or ensure only good patents issue? The last question is for smarter people to resolve, but if we want to reduce backlog and improve patent quality, I think we must focus on the quality of initial examination.

One way to increase the quality of initial examination is within each applicant's control. Instead of filing a written reply to an Office action, consider sending an email to the examiner with a detailed written proposal along with a request for an interview. You may find this sets the stage for a mutual understanding on how to claim an invention with respect to the prior art. Don't file a formal amendment until you understand the examiner.

I also think interviews should be the default and examiners should initiate more interviews. Call any of us and say, "I think I see how to place this application in condition for allowance." Most of us would welcome that call. On the other hand, examiners should not refuse a request to interview after a final Office action. One reason some appeal is they are frustrated with a revolving door of prior art rejections that appear to be fueled by some examiner's desire to get another RCE on the docket.

Until we address how we conduct initial examination, the backlog may not go away. It applicants' responsibility to efficiently prosecute cases and part of this is doing a good job at interviews. The USPTO web page Interview Practice has additional guidance on how to conduct PTO interviews.

Copyright © 2014 Robert Moll. All rights reserved.

PTAB - Cyrus Morton - Do the new patent office trials really make patent litigation cheaper? - A Comment

In IP: Do the new patent office trials really make patent litigation cheaper? Mr. Cyrus Morton tells us patent litigation is famously expensive, but then argues that because you can lose at various stages in patent office trials and end up in court, they are on average probably not much more cost effective.

Does the data support his views? The AIPLA Report of the Economic Survey stated in 2013 (1) when $1-25 million is at risk the median patent infringement suit cost is $1.4 million through discovery and $2.6 million including all costs; and (2) when more than $25 million is at risk the median patent infringement suit cost is $3.5 million through discovery and $5.5 million including all costs.

How about the cost of going to trial before the Patent Trial and Appeal Board (PTAB)? The inter partes review is recent so the AIPLA Economic Survey has not published any data. However, for inter partes reexamination, which is the closest procedure to inter partes review IPR, the AIPLA Report of the Economic Survey states in 2013 the median costs are (1) $50K for filing of a request, (2) $70K including the first patent owner response, (3) $100K including all patent owner responses, (4) $130K including an appeal to the Board, and (5) $250K including an appeal to federal court.

However, it is important to note IPR has fundamental differences with inter partes reexamination, which would raise its costs. IPR is more trial-like, has limited discovery and motion practice, and a hearing, unlike inter partes reexamination which has a prosecution style after the request is granted.

Although the AIPLA does not break out how much is at risk in the inter partes reexamination, if we triple the $250K total of inter partes reexamination to give us a rough comparison it still looks favorable to patent litigation, e.g., $750K vs. $2.6 million. Thus, if you get into a patent dispute, it is smart to consider filing a request for ex partes reexamination (the lowest cost option) and/or filing a petition for inter partes review and in either case requesting a stay of any pending patent litigation.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Written Description Requirement for Design Applications

The USPTO is hosting a roundtable and soliciting public comments on how the written description requirement should be applied to design applications on March 5, 2014.

As background at the Design Patent Conference Design Day 2013: Designs in the New Digital Age on April 23, 2013, an attendee asked whether an originally disclosed design provides an adequate written description where a new or amended claim is presented or where a claim is made for an earlier effective filing date under 35 U.S.C. 120.

More specifically, the USPTO is considering how the written description requirement under 35 U.S.C. 112(a) is applied to design applications where only a subset of elements of the original disclosure are shown using solid lines in an amendment or continuation application."

See the USPTO Request for Comments and Notice of Roundtable Event on the Written Description Requirement for Design Applications.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Proposed Rules Require Many Identifications of Attributable Owner To Avoid Abandonment of Application and Loss of US Patent?

On January 24, 2014, the USPTO notified that it proposes to change the rules to identify the attributable owner on filing of an application (or soon after), whenever ownership of the application changes, when the issue fee and maintenance fees are paid, and when a patent is involved in supplemental examination, ex parte reexamination, and a trial before the Patent and Trial Board (PTAB).

A theme for all these requirements is it will increase transparency and reduce patent litigation abuse, but it is unclear how identifying the attributable owner multiple times during pendency of the application is necessary. Maybe it gives big tech a way to track and monitor third party patents.

It will increase the cost of prosecuting applications and maintaining patents and even result in abandonment of an application or lapse of U.S. patent whenever someone fails to identify the attributable owner to the USPTO within a non-extendable three months. Congress is the legislative body that has a process for ensuring we discuss whether the benefit of this ownership rules outweigh the cost of subjecting owners to loss of US patent rights.

The proposed rule also raises a question if these rules exceed the USPTO law making authority.

Under the proposed rules someone can lose a US patent even if it is not the subject of any licensing or litigation activity simply if they fail to update their ownership records within three month. If a patent is the subject of litigation, ownership must be stated in the complaint. To say you can petition if you have delayed in updating the records is insufficient, because the USPTO may decline to grant the petition. I wouldn't be surprised to see articulate comments opposing this proposal.

See the USPTO notice on the proposed rules: Changes to Require Identification of Attributable Owner.

Copyright © 2014 Robert Moll. All rights reserved.

Twitter's New Patent Strategy

In IBM's Complaint to Twitter Leads to Patent Purchase, Susan Decker reports Twitter settled a dispute over three patents with IBM, signed a cross-license, and agreed to purchase 900 IBM patents. Twitter says it will "gain access to new technology and build a defense against infringements suit."

In a world that prizes massive patent portfolio's Twitter had just nine patents and 95 applications. Twitter danced around the issue by seeking to get the industry to transfer control of patents to employee-inventors to put an end to the patent war, but not much happened. I don't think people wanted to give up their patent rights. See Twitter Innovator's Patent Agreement - Unlikely Adoption. Anyway, Twitter has a new patent strategy.

Would Twitter have done better to pursue a strong patent position going into the IPO? It is impossible to know and it may not matter since Twitter stock has remarkably increased from $44.90 at IPO to $64.50 on January 31, resulting in a market capitalization of $35.8 billion. Twitter doesn't need to seek its own patents to catch up, it can purchase 900 IBM patents. IBM knows how to make patents available when you "need" them. See Facebook Buys 750 IBM Patents - Call to Arms. Time will tell how much the IBM patents relate to Twitter, but some appear to be tangential (e.g., protecting semiconductor chips from damage). One thing appears to be certain on this confidential agreement Twitter has joined the ranks of companies owning NPE patents.

Thanks to Alan Snyder for passing the above article and the one below my way!

Updated on March 7: Twitter Paid $36 Million for IBM Patents, which = $34,000 per patent or application when you ignore the nine patents Twitter owned in the cross-licensing transaction.

Copyright © 2014 Robert Moll. All rights reserved.