Archive for January, 2009

PTO to Consider Deferred Examination

January 29, 2009

The PTO will conduct a roundtable discussion on Feb. 12 to determine whether there is sufficient support to consider a deferred examination procedure.

The PTO currently examines every non-provisional patent application that is filed with the requisite fees.  Many countries, such as Canada and Japan, allow applicants to defer examination for up to three years from the filing date.  This gives the applicant more time to determine whether the invention is commercially feasible and whether it is worth pursuing all the way through the prosecution procedure.  If the applicant does not file a request for examination by the deadline, the application is abandoned and not examined.

Supporters of deferred examination believe it to be a great way to relieve some of the congestion and backlog of applications at the PTO.  Many applications for inventions that turn out to not be of significant importance to the applicant can be dropped without examination.  This frees examiner resources to be used to examine applications that the applicants believe to be more worthwhile.

Opponents of deferred examination argue that this would increase uncertainty in the market.  One of the big problems with the patent system, they argue, is the pendency of applications at the PTO.  Although publication of applications helps to an extent, competitors do not know whether or to what extent a product in which they have invested a large amount of capital will be covered by an earlier-filed later-granted competitor’s patent.  Permitting examination to be deferred would increase this uncertainty further by potentially lengthening the time that an application is pending at the PTO, and even permit more time for patent applicants to revise their claims to cover products in the marketplace.  On the other hand, it would seem that a shorter backlog at the PTO would permit their competitor’s “important” patents to get through the PTO more quickly, reducing uncertainty.

Many of these issues were covered in the U.S. Department of Commerce’s Global IP Center set of recommendations released in December to the new administration for dealing with the PTO.

In 2000, the PTO created a deferred examination procedure where an applicant can petition the PTO for a deferment of up to three years, by paying an additional fee (on top of the previously filed application and examination fee).  The PTO reports that fewer than 200 applications have taken advantage of this option.

Why is deferred examination more popular in other countries than in the US?  Dennis Crouch gives a good summary of reasons with which I generally concur.  These include that in other countries, examination fees are also deferred, while in the US all fees are paid at filing regardless of the deferment.  Also, in other countries, examination must be affirmatively requested, while in the US deferment currently has to be affirmatively petitioned for, something many applicants may be reluctant to do.

Will deferred examination solve the backlog and pendency ills of the PTO?  This is doubtful, but it is a step in the right direction.

Cert Petition Filed in Bilski

January 29, 2009

Yesterday, Bilski filed a petition for certiorari asking the Supreme Court to review the Federal Circuit’s en banc decision limiting patent eligible subject matter.  Specifically, the petitioners raised the following questions to the Supreme Court:

Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”

Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional
intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.

The petitioners argue that the “Machine-or-Transformation” test conflicts with Supreme Court precedent and congressional intent.  Specifically, the Supreme Court’s last two patentable subject matter cases, Chakrabarty and Diehr, each set forth the proper tests for determining patentable subject matter and only excluded laws of nature, natural phenomena, and abstract ideas from patent protection.  The Supreme Court declined to adopt the Machine-or-Transformation test in both Gottschalk and Flook.

The petitioners also argue that by enacting the prior inventor defense in § 273, Congress embraced the proper test for patent eligible subject matter in effect prior to the Bilski decision.  Indeed, the section defines “method” for purposes of the defense as meaning “a method of doing or conducting business.”

The next argument made in the petition is that process patents should not be limited to manufacturing processes, but should also include emerging technologies.  Although the Federal Circuit rejected a categorical exclusion of business method patents, in reality, the test makes it very difficult to obtain such a patent (a reality that is being played out at the Federal Circuit and at the Board of Appeals).

Should the Supreme Court Hear Bilski?

As Dennis Crouch noted earlier, the case is well developed, having been heard by the entire Federal Circuit and having garnered 38 amicus briefs.  But, he also notes that the invention itself is not a compelling one for review.  There may be other issues of patentability dealing with prior art and the like (although these issues have no bearing on the § 101 issue).  There are a number of other cases coming through the PTO and the courts that may present a better case with a better invention for review.  On the other hand, a decision on this petition will not occur until late in the current term (by June).  If the Supreme Court hears the case, it will not be until fall, with a decision sometime next spring.  Waiting for another case could cause a longer delay and result in a preclusion of business method patents for a longer time.

John W. Thompson is Leading Candidate for Commerce Secretary

January 28, 2009

Dept of Commerce SealThe US Patent and Trademark Office is a part of the Department of Commerce and as such is under the jurisdiction of the Secretary of Commerce.  New Mexico Governor Bill Richardson was Pres. Obama’s original selection for that post, but Richardson withdrew his name from consideration due to an ongoing federal investigation.

A new name has emerged as a candidate for this cabinet position.  John W. Thompson, chairman and CEO of Symantec Corporation, announced that he will be retiring as CEO in April, a position he has held for 10 years.  Symantec is a network security company.  Prior to joining Symantec, Thompson had spent 28 years with IBM in various capacities.

On the one hand, it would be nice to have a Commerce Secretary who has a background in dealing with technology issues.  This is especially true in light of the continued push for patent reform.

On the other hand, as previously noted by Dennis Crouch, Symantec is a leading member of the “Coalition for Patent Fairness.”  Rather than focusing on fairness, the Coalition’s website includes an agenda for limiting the power of patents:

Over-broad patent grants stifle future innovators, while unjustified lawsuits that aim to extort settlements without regard to the merits of underlying patents clog the courts.

The lobbying group is pushing for patent reform through reduction of infringement damages, limitations on assertions of willful infringement, creation of a strong system for post-grant patent challenges, and reduction in patentee forum shopping.  Dennis also notes:

Previously, the Coalition also supported eBay and reduced willfulness findings. Each of these changes reduce the potential power individual patents.

In any case, Mr. Thompson’s potential nomination gives some reason for optimism that Pres. Obama is seeking qualified individuals for government leadership posts.  Hopefully, he doesn’t have a political agenda to further limit patents and make it too onerous to acquire and assert patents.  There is general agreement that some changes are needed to the patent system.  Changes that go too far, however, could stifle innovation and have a negative impact on the already precarious economy.

Congress Tries Again on District Judge Pilot Program

January 26, 2009

On January 22, Senator Arlen Spector (R-PA) introduced S. 299 and Reps. Darrell Issa (R-CA) and Adam Schiff (D-CA) introduced H.R. 628.  These bills seek to establish a pilot program for district judges to obtain training and expertise in patent cases.  The legislation is an attempt to redress the high reversal rate in patent cases at the Federal Circuit.  Similar bills were introduced in the previous two congresses.  Each time, the bills passed the House, but were never considered by the Senate.  The new bills have each been assigned to their respective judiciary committees.

Under the proposed legislation, 15 district courts would be chosen to be a part of the pilot program where the judge and the judge’s clerks receive special training in patent law and technical issues.  If a patent case is randomly assigned to a judge in the district who is not a part of the pilot program, the judge can pass the case to the pool of judges who are a part of the program.  In this way, patent cases within participating districts would generally be handled by judges who have an interest in patent law and who have special training in the specialized area of the law.  The pilot project would last 10 years.

PTO Problems are Not New; The More Things Change, the More They Stay the Same

January 26, 2009

pto-swamped1Questions about patent application pendency, backlog, and quality are not new.  An article in the June 1930 issue of Popular Science Monthly is entitled “The Patent Office Has Become A National Disgrace.”  The article came to my attention from Professor James G. Conley of Kellogg School of Management, Northwestern University.

The article refers to the Patent Office as being “[u]ndermanned, out of date, with inadequate equipment . . . with facilities designed for the needs of years ago.”  As of the writing of the article the PTO had a backlog of 118,000 patent applications and was receiving about 2,000 new applications per week.  Only four years earlier, the backlog had been 41,000 applications.  Compare this to the 466,147 filed in fiscal year 2008, nearly 9,000 per week (a nearly 450% increase) and the 1.2 million application backlog (an increase of more than 1000%).  The article decries the nearly 45% of applications that took longer than two years to obtain a patent.

The article also recognizes the problem of “secret prior art” with the backlog.  There was no pre-grant publication in 1930.  A new applicant’s invention may already be described in one of the 118,000 applications that had not yet issued as a patent.

The patent application filing fee in 1930 was $20, along with a $20 issue fee (about $250 each in 2009 dollars).  Compare that with the $1,090 filing fee, $1,510 issue fee, and $300 publication fee today.  One improvement today is the ending of fee diversion.  In 1930, the Patent Office made a profit of $6 million, but was unable to use the money to increase its productivity.  The PTO was stuck with only the funding allocated to it by Congress.

The article also talks about the state of the examining corps in 1930.  There were 650 examiners (compared to over 6,000 today).  Eight to ten of the examiners resigned each month, with a 50% turnover every two and a half years.  At the time, examiners were required to pass a two day examination, understand French or German, have training in reading mechanical drawings, have three years of college courses in physics, chemistry, or mechanical engineering, and have completed math courses through differential calculus.  Becoming an examiner also required a physical examination.

New examiners were paid $2,000 per year (about $25,000 in 2009 dollars).  In order to become the head of an examining division, the examiner had to have a law degree.  Most patent examiners were new college graduates looking to use the position as a stepping stone to a career in engineering or patent law, where they could make significantly more money.  Thus, attrition was a worse problem than it is today.

The article also gives anecdotal evidence of poor examination leading to poor patent quality.  The article refers to a situation where an inventor had his patent invalidated because an examiner had not found a particular piece of prior art that should have been discovered during the search phase of the examination; and this after waiting over two years to get his patent!

The article continues by noting that the problem was only going to get worse.  The PTO granted more patents from 1920-1930 than it did from 1789-1889.  Patent, trademark, and design applications in 1929 numbered 114,496.  In 1930, this number had increased about 12%, with a 100% increase in the number of trademark applications.  The article’s author recognized that this increase in the amount of available prior art for searching makes the job more difficult as time goes on.

The author concluded by urging readers to write to their congressmen for patent relief.  He urged them to tell Congress to update and expand the PTO’s facilities and increase the number of examiners significantly.

It is interesting to note that the more things change, the more they stay the same.

AIPLA Urges Federal Circuit Not to Proscribe Patents for Biomedical Diagnostic Tools

January 23, 2009

The American Intellectual Property Law Association (AIPLA) has filed an amicus brief supporting the patentee in Prometheus Labs. v. Mayo Collaborative Services which is on appeal at the Federal Circuit.  AIPLA is an organization of IP professionals and related entities that generally supports strong IP rights.  AIPLA lobbies Congress and submits amicus briefs on behalf of its membership.

Prometheus is another case where the patent includes Metabolite-type claims.  Claim 1 of U.S. Patent No. 6,680,302 reads:

1. A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising: (a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and (b) determining a level of 6-thioguanine or 6-methyl-mercaptopurine in said subject having said immune-mediated gastrointestinal disorder, wherein a level of 6-thioguanine less than about 230 pmol per 8 x 108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and wherein a level of 6-thioguanine greater than about 400 pmol per 8 x 108 red blood cells or a level of 6-methyl-mercaptopurine greater than about 7000 pmol per 8 x 108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

In its brief, AIPLA argues that the district court judge in finding the claims to be invalid because they were not patentable subject matter, made several errors.  First, the judge did not apply the machine-or-transformation test set forth in Bilski.  AIPLA argues that the invention involves the physical transformation of a composition of matter, a drug, into a metabolite.

Next, the district court relied to a large extent on Justice Breyer’s dissent from the Supreme Court’s dismissal of Lab. Corp. v. Metabolite Labs. AIPLA argues that only three justices joined the dissent–the majority of the Supreme Court rejected the dissenting opinion–so it is not controlling law.  AIPLA also argues that the current case is different from Lab. Corp, and that the dissent was wrong.  No other judge had addressed the patentable subject matter issue in that case, so the record wasn’t sufficiently developed on the issue.  The dissenting justices were acting as trial judges on this issue.  Finally, the brief notes that “the statements of a Supreme Court justice appear to have had an intimidating effect” on the district court in this case.

AIPLA also argues that the district court applied the preemption test rejected in Bilski.  The preemption test holds that where a patent claim attempts to preempt all uses of a natural phenomenon, the claim is not directed to patentable subject matter.  The Bilski court found this test to be very difficult to apply and had generally rejected the test.  By definition, a patent attempts to exclude, i.e., preempt others from practicing the claimed invention.

Finally, AIPLA implores the court to not proscribe patents for the entire field of biomedical diagnostic tools.  These tools are very important in medicine and the court should not remove the incentives to innovate in this area.  The Federal Circuit addressed issue here.

This case remains in the briefing stage and a decision is not expected until late spring or summer.

The Importance of an Agreement Prior to Inventing

January 21, 2009

If you are going to be inventing with another person, you should consider an agreement with that person.  Here’s why.

Prior Art

“Prior art” in general refers to information that is publicly available prior to the date of invention.  Prior art would include, for example, a publication ( including a patent, published application, journal article, etc.).  Activities can also qualify as prior art.  Examples of such activities include if an invention is “known or used by others in this country” prior to the invention by a patent applicant, or if an invention was in public use or on sale in this country more than one year prior to an application for patent.

“Secret Prior Art”

There is also a type of prior art that is often referred to as “secret prior art.”  An inventor may do a diligent prior art search and discover no publications disclosing his invention.  A prior filed, and not yet published, application that discloses the same invention would still be prior art against his applicationunder 35 U.S.C. § 102(e).

For example, Inventor A conceived of an invention and filed a patent application for his invention on January 21, 2009.  Inventor B, having no knowledge of Inventor A or his activities, conceived of the same invention and filed a patent application for the invention on January 22, 2009.  Inventor A’s application will not be publicly available until at least July 21, 2010 ( when the application is published 18 months after filing).  Nevertheless, Inventor A’s application is prior art against Applicant B’s application, even though Applicant A’s application is secret and unknown to anyone by Applicant A.

Obviousness

In order to obtain a patent, an invention must not only be new or novel, it must also be non-obvious.  This means that it cannot be simply a slight modification or variation (or even an improvement) over the prior art, if such modification, variation, or improvement would have been obvious to one of ordinary skill in the art of the invention.  This can be a real problem when 102(e) “secret prior art” is taken into account.

Inventor C conceives of an invention and files a patent application for it on January 21, 2009.  Inventor D, having no knowledge of Inventor C’s invention or application, conceives of an improvement to Inventor C’s invention and files a patent application for it on January 22, 2009.  Inventor D has the same problem as Inventor B did above if the improvement would be obvious in light of Inventor C’s invention to one of ordinary skill in the art.  This is even true if Inventor C and Inventor D work together on the improvement (in which case the prior application may not technically be “secret” from Inventor D, but is still not publicly available).

103(c)

35 U.S.C. § 103(c) is intended to alleviate this problem.

(1) Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person.

(2) For purposes of this subsection, subject matter developed by another person and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person if -

(A) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made;

(B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and

(C) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.

(3) For purposes of paragraph (2), the term “joint research agreement” means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.

Subsection (1) refers to the situation where the invention and the improvement are owned by the same entity or that the inventors are both obligated to assign to the same entity.  So, as above, if both Inventor C and Inventor D had an obligation to assign their inventions to Acme Corp., this section precludes the use of Inventor C’s application as prior art for obviousness purposes against the application filed for the later improvement.

Subsection (2) refers to the situation where there is no single entity for assignment or obligation of assignment, but there is a joint research endeavor.  If there is a written agreement, and the improvement is invented as part of the agreement, then the original application cannot be used in an obviousness rejection of the application filed for the improvement.

Inventors Should Have an Agreement to Take Advantage of 103(c)

What does all this mean?  When inventors get together with the idea of inventing or creating a new product, it would behoove them to have at least a written joint research agreement.  In that case, none of the individual inventors prior inventions that might otherwise qualify as “secret prior art” can be used to reject any new inventions as obvious.

An even better scenario is when the inventors form a common entity, such as an LLC, to which they are obligated to assign all inventions.  This can avoid potential conflicts of interest when the inventors approach an attorney to represent them individually with respect to the inventions.  That, however, is a topic for another day.

Patent Reform Legislation on Damages May Hurt Patents and the Economy

January 16, 2009

Many critics have complained that patent damage awards are too high and that the damages should be based solely on the patentable features of the invention, rather than on the entire market value of the product that incorporates the invention, as is currently the case.  Congress has responded with proposed legislation to “apportion” damages in this way.  No patent reform bills made it through Congress in 2008, but patent reform remains hot in 2009.

Critics of apportionment calculations, including Chief Judge Michel of the Federal Circuit, have argued that such calculations will make infringement trials even more complex than they already are and that the courts are not equipped to make such determinations on damages.  They also argue that no studies have been conducted as to the effect of the proposed legislation on the value of US patents.  Well, now we have one such study.

Professor Shane’s Study

The Manufacturing Alliance on Patent Policy has issued a paper entitled The Likely Adverse Effects of an Apportionment-Centric System of Patent Damages by Scott Shane, Professor of Economics at Case Western.  Prof. Shane believes the proposed damages legislation will result in the following:

1. Reduction in U.S. patent value of between $34.4 billion and $85.3 billion.
2. Reduction in value of U.S. public companies of between $38.4 billion and $225.4 billion.
3. Reduction in R&D of between $33.9 billion and $66 billion per year.
4. Between 51,000 and 298,000 U.S. manufacturing jobs put at risk.
5. Industries employing fewer people favored over those employing more people.

Reduction in Patent Value

Prof. Shane believes that the value of patents is no longer based on the opportunity to obtain an injunction against infringing activity after the Supreme Court’s eBay decision.  The value is now based on damages that can be obtained in an infringement suit.

To get the numbers on the reduction in the value of patents, Prof. Shane conducted a survey of patent attorneys at law firms.  The survey respondents estimated that the proposed patent reform legislation would result in a 20% to 39% reduction in damage awards.  He then relied on several academic studies that put the average value of a US patent at $93,463 to $118,988, and numbers from the PTO of about 1.8 million patent in force.  This puts the total value of US patents at $171.8 to $218.7 billion.  A 20 to 39% reduction in damage awards would reduce these numbers by $34.4 to $85.3 billion.

Reduction in Company Value

Prof. Shane then uses two studies that suggest that the the percentage of a company’s worth that based on patents held by US public companies is 0.8% to 1% on the low end to 11.3% on the high end.  As of November 2008, market capitalization of Wilshire 5000 companies was $9.8 trillion.  A 20% to 39% reduction in these numbers results in a decrease of about $38.4 to $225.4 billion in the value of the companies.

Reduction in R&D Investment

Prof. Shane relies on a paper that estimates that anything that reduces the value of a patent by 10% will result in a corresponding 7% reduction in R&D investment.  A 20% to 39% reduction in patent value will result in a reduction in R&D investment of 14% to 27.3%.  According to the National Science Foundation, industry paid $241.8 billion in R&D in 2006.  A 14% to 27.3% drop in patent value would thus result in a $33.9 to $60 billion decrease in industry-funded R&D.

Prof. Shane provides similar calculations to reach his other conclusions that would result in job loses and smaller firms.

While it is good to finally have a study on damage reform, there are too many assumptions that Prof. Shane has to make to give us a real picture of the effect on patents and innovation.

Non-US Companies Obtain Majority of US Patents

January 15, 2009

US-based companies obtained only 49% of US patents in 2008, according to IFI Patent Intelligence, which conducts an annual study of issued US patents.

The PTO issued 157,774 utility patents in 2008, up slightly from 157,284 in 2007.  Given the poor economy, it might be expected that fewer patents would issue in 2008.  Most of the patents issuing in 2008, however, were filed in 2005 or 2006 when times were better.

That being said, the PTO reported a 6% increase in patent application filings in fiscal year 2008 to 466,147.  Taking the recent allowance rate of 44.2% into account, one would expect over 206,000 of these applications to eventually issue as patents.  This increase in filings is one reason the PTO’s backlog is increasing to an estimated 1.2 million pending applications.

IFI’s study comes up with a list of the 35 companies receiving the most utility patents in 2008.  American companies only occupy four of the top ten spots and 12 of the top 35.  Japanese companies hold five of the top ten spots and 14 of the top 35.  Overall, Japanese companies received 23% of the US utility patents.  US company IBM led the way with 4,186 patents, followed by South Korean company Samsung with 3,515, and Japanese company Canon with 2,114.

The study also reviewed specific market sectors, finding that semiconductor manufacturing and multiplex communication were the subject of 4,430 patents.  Both of these are hot electronics areas.  Among the bio sector, drug compositions had 2,990 patents and biotechnology had 2,680 patents.

It will be interesting to see if these numbers go down over the next couple of years given the current economic situation.  Because of the approximate three year lag between filing and issuance, companies that cut patent filings too far at this time may find themselves behind their competitors once the economy turns around.

Comiskey at the Federal Circuit, Rehearing En Banc Denied

January 13, 2009

The Federal Circuit voted 7-5 against rehearing In re Comiskey en banc.  Judge Moore issued a well-reasoned dissent from the denial.

Background

Comiskey filed a patent application in 1999 directed to methods and systems for requiring and conducting mandatory arbitration.  The patent examiner rejected the claims as being obvious over the prior art and the Board of Appeals affirmed the rejection.  During the many years of prosecution, there was no mention by the PTO or by the inventor as to whether the claims were directed to statutory subject matter.  Comiskey appealed the rejection to the Federal Circuit.

At oral argument at the Federal Circuit, the court, for the first time, raised the question of whether the claims were directed to statutory subject matter, although neither party had appealed that issue.  Judge Moore characterizes the exchange in footnote 1 of her dissent:

In fact, during oral argument, counsel for the PTO was clearly puzzled by the panel’s suggestion that it could affirm on an alternative ground: “When I think about a question like that, I think of this court’s role as an appellate court which is supposedly empowered to review the decisions of the lower tribunal.” Oral Arg. 21:48-22:00, available at http://oralarguments.cafc.uscourts.gov/mp3/2006-1286.mp3. When
pressed, counsel added: “[I]t would be unusual—I’ve never seen it my nine years—where this court has affirmed on a completely different ground.” Id. at 22:07-22:21.  After surprising Mr. Comiskey and the PTO with its questions directed to § 101 during oral argument, the panel asked the parties to submit letter briefs of no more than 7000 words limited to the issue of whether Mr. Comiskey’s claims were directed to patentable subject matter under § 101. Nowhere in its brief did the PTO address the propriety of this court reaching a new ground of rejection on appeal, likely because of the limited scope of the supplemental briefing. Nonetheless, Mr. Comiskey spent half of his short brief objecting to the panel reaching a different ground of rejection on appeal. Mr. Comiskey had no opportunity to consider or respond to any of the PTO arguments on this entirely new ground of rejection as both briefs were due simultaneously.

The opinion issued by the Federal Circuit panel that included Judges Dyk, Michel, and Prost did not address the PTO’s obviousness rejection at all.  In fact, the panel concluded that the method claims in Comiskey’s application were not directed to statutory subject matter, so they were unpatentable.  The panel held that the system claims were directed to patentable subject matter because they included a machine.  Then, the panel held decided to

remand to the PTO to determine whether the addition of a general purpose computer or modern communication devices to Comiskey’s otherwise unpatentable mental process would have been obvious.

The original panel decision is here.

What?  The PTO had already concluded that all of the claims were obvious over the prior art, both the examiner and the Board of Appeals had so ruled.  Now, the Federal Circuit does not address this question on appeal, but directs the PTO to consider the question again?  What are they supposed to do, say “we still think they’re obvious.”

Rehearing

The Federal Circuit deferred decision on the petition for rehearing in Comiskey until after they decided Bilski.  The court realized that what the original panel did didn’t make sense. The original panel decision was withdrawn and reissued as to the final determination.  The new opinion still holds that the process claims are not patentable subject matter, but now simply remands the system claims to the PTO to make a determination as to whether they are directed to patentable subject matter.  The panel still does not address the obviousness rejection, but at least now doesn’t tell the PTO to reconsider that question without ruling on it.  Now, the PTO is to consider the 101 question on the system claims.  This still begs the question as to why the court could rule on the process claims but not the system claims.

Judge Moore’s Dissent

In her dissent, Judge Moore states that the original panel had an obligation to consider the obviousness rejection that had been appealed to them.  If the panel found a flaw in the PTO’s logic on the obviousness question, it could have affirmed on other grounds, namely non-statutory subject matter.  She considers the remand to the PTO to be wasteful because the PTO’s obviousness rejection was not reviewed and still stands.  She notes that the court did not point out a need for additional evidence, fact findings, or legal analysis.  She also states that it is not the Federal Circuit’s job to direct the PTO’s examination process.

She also cannot understand why the system claims were remanded, but not the process claims.  Why the distinction?  What additional information does the panel need from the PTO?  Neither Bilski, nor any other case, has changed the rule that machine claims are patent eligible subject to the exceptions to patentability (abstract idea, natural phenomenon, or law of nature).

On remand, even if the PTO agrees with the original panel decision that yes, the system claims are patentable subject matter, what then?  Comiskey still won’t get his patent because the PTO’s obviousness rejection remains.  Does he have to re-appeal the same rejection again to the Federal Circuit?  The court has put Comiskey in an impossible situation that will require him to win two additional appeals to get his patent.  Prosecuting a patent application for nearly ten years at the PTO and then having to appeal to the Federal Circuit multiple times is not cheap.  Is this evidence that the Federal Circuit is also against patent owners?


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