INVENTIVE STEP

PTO Publishes More Rules Packages

February 17, 2012

Last week, the PTO published a number of additional rules packages to implement the America Invents Act.

Technical Invention

Section 18 of the America Invents Act is a special transition program for challenging business method patents. The section defines “business method patents” as

a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.

The bill directed the PTO to issue regulations as to what a “technological invention” is. The PTO has now proposed a definition:

whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.

This determination is to be made on a case-by-case basis. The PTO supports this definition by reference to the legislative history of the AIA. Unfortunately, this does not help very much. What is a “technical problem”? What is a “technical solution”?

Posted in Patent Reform, US Patent & Trademark Office | Leave a Comment »

Book Review: Patent Professional’s Handbook

February 13, 2012

A Training Tool for Administrative Staff

By Susan Stiles

http://patentprofessionalshandbook.com/

Patent Professional’s Handbook is a training and reference guide for administrative support staff that work for a patent attorney or agent. The book provides an overview of the patenting process, including summaries of the various documents that may be filed during prosecution. The summaries provide a decent understanding of why various documents are filed without getting into the legal arguments or theory that is more appropriate for the patent attorney or agent.

The book details the various types of patent applications and other filings that need to be made during patent prosecution, such as IDS’s, amendments, assignments, priority documents, and others. There are details on how to deal with applications after allowance, including payment of maintenance fees and the like.

The book covers how to conduct business with the PTO including how to file various papers. There are details on hand delivery, fax submissions, mail submissions, and electronic filing. The book does get a bit redundant in detailing the same procedures over and over for filing many different types of documents.

The book includes a number of checklists and charts that can be used by an administrative professional at various points in the process, such as when filing an application, an IDS, or an amendment, or when reviewing a notice of allowance. There is a glossary of terms that can be helpful to newer professionals.

The handbook clearly took a lot of time to prepare. It includes a large number of addresses, phone numbers, and web page links associated with the PTO. I am worried that if the material is not updated regularly that much of the material will quickly fall out of date. The risk of that happening is especially great at this time as the PTO is changing many rules and procedures to comply with the America Invents Act.

AIPLA offers a legal secretaries and administrators course, but I am not aware of any other reference book like this that is directed specifically to non-attorney administrative support personnel. The book is quite detailed and can be used both as a training tool and a reference guide. It does a good job in both respects and for those purposes, I would recommend it.

UPDATE

The author has informed me that she is currently working on a 2012 edition that should alleviate my concerns about the material becoming dated. This edition should be available in the coming weeks or months.

Posted in Uncategorized | 2 Comments »

PTO Fee Proposals

February 9, 2012

The America Invents Act granted the PTO the right, for the first time, to set its own fees. Previously, PTO fees were set by Congress.

The PTO has now published its proposed fee schedule. Not surprisingly, the fees are going up. The PTO seeks to increase its funding to deal with backlog issues in applications and appeals. But, as noted by Patently-O, the PTO is clearly also attempting to influence applicant behavior through its proposed fees.

Here are the PTO’s new fee proposals:

Basic filing, search, and exam fee: $1,840 from $1,250 (up 47%);
More than 3 independent claims: $460 each, from $250 (up 84%);
More than 20 toal claims: $100 each, up from $60 (up 67%);
Request for Continued Examination (RCE): $1,700 from $930 (up 83%);
Notice of Appeal: $1,500 from $620 (up 142%), but the PTO proposes to waive the issue fee if the examiner withdraws the final rejection;
Proceeding with appeal: $2,500 after examiner’s answer to move to board; there is no longer any fee for filing an appeal brief (was $620);
Issue and Publication fees: $960 from $2,040 (DOWN 53%);
Maintenance fees: $1,600, $3,600, $7,600 from $1,130, $2,850, $4,730 (up 42%, 26%, 61%, respectively).

The PTO notes that the combined filing/search/exam and issue/publication fees for obtaining a patent will actually decrease from $3,290 to $2,800. Of course this means that rejected applications will be higher and issued patents lower.

These fees are a significant increase from the current system. One could certainly argue that the basic filing fee should be raised to address the backlog, but a 47% increase seems a bit steep.

The PTO’s count reform efforts to deal with RCE filings has obviously been a failure, such that it now proposes an 83% increase to the fee for filing an RCE in the hopes that this will discourage applicants from filing them. Unfortunately, most RCE’s are dictated by examiners who refuse to consider anything after final rejection, so this will probably not help with that goal. To truly reduce the number of RCE filings, the PTO needs to develop a better after final mechanism for handling amendments and finding patentable subject matter, as well as dealing with IDS submissions after the issue fee is paid.

The board is currently swamped with ex parte patent appeals. To deal with this problem, the PTO proposes increasing the fees for filing a Notice of Appeal and proceeding to the board to $4,000, up from the current $1,240 ($620 for the notice and $620 for the appeal brief). This is an increase of over 320%! Again, that is unreasonable. Perhaps the appeal problem should be attacked at the front end by improving examination and training examiners to work with applicants to find allowable subject matter during prosecution. The one bone throne to applicants is that if the examiner withdraws the final rejection prior to the examiner’s answer (not an uncommon occurrence), the issue fee is waived.

The PTO is also proposing a significant increase in the maintenance fees due during the lifetime of the patent. The stated reasoning is that by then the patent owner will know the true value of the patent and will have been able to reach the market for the patent.

Small/Micro-Entities

The above stated fees are for large entities. Small entities (companies with less than 500 employees) will pay 50% of the stated amount.

The real winners here are the new category of micro-entities. Micro-entities receive a 75% discount on the stated fees.

To qualify as a micro-entity, the application must not include any inventor that have been named on 5 or more U.S. non-provisional patent applications. The application must not be licensed or the inventors must not be legally obligated to license or assign the application to any entity that does not meet the micro-entity requirements. The assignee and each inventor must have an income of less than 3 times the average gross income reported by the Department of Labor for the previous calendar year.

One group that successfully lobbied to be added to this definition are universities and “institutes of higher eduction.” Thus, large entities will subsidize not only small or individual inventors, but also enormous universities with operating budgets in the billions of dollars. A big win for them.

Next Steps

The PTO has sent the proposed fee structure to the Patent Public Advisory Committee (PPAC) and they will begin a series of public hearings. PPAC will hold hearings, gather feedback from the public and prepare a report to the PTO. After the hearings, the PTO will publish the final proposed rules on fees in the Federal Register, probably in June. This will begin a 60-day comment period on the rules which they hope to implement by fall.

Posted in US Patent & Trademark Office | 2 Comments »

Foreign Patent Protection

February 7, 2012

A patent permits its owner to exclude others from making, using, selling, offering for sale, or importing the patented invention without his permission. A patent is, however, unique to the country where it is granted. Thus, if a patent owner does business in more than one country, it would be necessary to obtain a patent in each country to protect the invention.

Some countries have restrictions on what can be patented. For example, some countries do not permit patenting software, business methods, drugs, or methods of treatment for humans.

PCT Applications

One way to obtain patent protection in multiple countries is to file an application under the Patent Cooperation Treaty (PCT). A PCT application is an international application that is filed through the World Intellectual Property Office (WIPO), where an applicant can designate a large number of countries in which he desires to file his patent application. Currently, 144 countries are members of the PCT.

A PCT application does not give the applicant an “international patent”, as all patents are national in nature (although certain organizations like the European Patent Office (EPO) issue a “European Patent” that must be registered in each member country where the applicant desires the patent to be in effect). Instead, the PCT provides a mechanism that gives the applicant 30 or 31 months from the earliest filing date (the first filed patent application) to determine whether to file the patent application in various individual countries. A PCT application can either be the first filed application for an invention or it must be filed within 12 months of the first filed application.

The PCT also provides an International Search Report and an examination, if desired, so that the applicant can get an early search performed to see if the invention is patentable. The delay also permits the applicant to determine whether the invention is commercially valuable and whether it is worth spending the money to obtain a patent in each country. While applicants may designate all 144 countries at the time of the PCT filing, they can decide later in which individual countries they would like to pursue patent protection.

A PCT application can also save money on translation costs early in the process. While most individual countries require patent applications to be filed in the native language of that country, PCT applications permit applicants to delay the cost of translating the application into the various languages.

Once the 30 or 31 month period from the first filing date elapses, a PCT applicant must “enter the national stage” in each country where a patent is desired. Otherwise, the application is abandoned and patent protection cannot be obtained. It is at this stage where translations must be obtained and filing costs for the various countries must be paid.

Each country usually requires that the applicant work through an attorney or patent agent who is registered to practice before that country’s patent office. Thus, to obtain a patent in Brazil, the applicant must work with a Brazilian patent attorney or agent. These attorneys and agents charge fees for their services, further adding to the costs of obtaining patent protection in various countries.

If the PCT procedure is not utilized, applicants must file in each individual country within a year of the filing date of the first filed application. The translation, filing, and agent costs are due at that time. A primary advantage of the PCT is the 18 to 19 month delay for these costs.

While 142 countries are currently members of the PCT, there are several significant countries that are not members; these include Argentina, Paraguay, Uruguay, Venezuela, Taiwan, and the Middle East. To obtain patents in these countries, a patent application must be filed in each within 12 months of the first filed application.

Patent Prosecution Highway

The United States PTO has entered into an agreement with 21 other patent offices called the Patent Prosecution Highway. Under this program, once a patent claim is found to be allowable by the patent office where the application was first filed, the applicant may request that other patent offices fast track examination of the application. This is a type of work-sharing program intended to cut reduce redundancy in examination.

Posted in Patent Strategies | 3 Comments »

Patent Mass Aggregators

January 31, 2012

There has been a great deal of news recently about large patent portfolio acquisitions, such as Google’s $12.5 billion acquisition of Motorola Mobility that includes a portfolio of more than 17,000 patents and patent applications, or Apple, Microsoft, and RIM pooling resources to acquire Nortel’s 6,000 patent portfolio for $4.5 billion.

In a new study with results recently published in the Stanford Technology Law Review, Tom Ewing and Robin Feldman, law professor at the University of California-Hastings, discuss specifically the case of Intellectual Ventures and patent mass aggregators. Intellectual Ventures has become one of the top 5 owners of U.S. patents. The authors estimate that their portfolio includes 30,000-60,000 patents worldwide. Their study recites potential positive and negative effects of such large numbers patents being owned by a single entity.

An Abstract of their article is below. The complete article is available at: http://stlr.stanford.edu/category/articles/

The Giants Among Us

Tom Ewing & Robin Feldman

2012 Stanford Technology Law Journal 1

Abstract

The patent world is undergoing a change of seismic proportions. A small number of entities have been quietly amassing vast treasuries of patents. These are not the typical patent trolls that we have come to expect. Rather, these entities have investors such Apple, Google, Microsoft, Sony, the World Bank, and non-profit institutions. The largest and most secretive of these has accumulated a staggering 30,000-60,000 patents.

Investing thousands of hours of research and using publicly available sources, we have pieced together a detailed picture of these giants and their activities. We consider first the potential positive effects, including facilitating appropriate rewards for forgotten inventors, creating a market to connect innovators with those who can manufacture their inventions, and most important, operating as a form of insurance – something akin to an Anti-Troll defense fund.

We turn next to the potential harmful economic effects, including operating as a tax on current production and facilitating horizontal collusion as well as single firm anticompetitive gamesmanship that can raise a rival’s costs. Most important, we note that mass aggregation may not be an activity that society wants to encourage, given that the successful aggregator is likely to be the one that frightens the greatest number of companies in the most terrifying way.

We argue that mass aggregators have created a new market for monetization of patents. It is vast, rapidly growing, and largely unregulated. We conclude with some normative recommendations, including that proper monitoring and regulation will require a shift in the definition of markets as well as a different view of corporations and their agents.

Posted in Uncategorized | 1 Comment »

Supplemental Examination, Reexamination

January 26, 2012

Yesterday, the PTO published regarding supplemental examination, as well as fees for the procedure and an adjustment of fees for ex parte reexamination and associated ex parte and inter partes reexamination petitions. Supplemental examination goes into effect September 16, 2012.

The America Invents Act includes a new procedure called “supplemental examination” that may be used by a patent owner to have certain information relevant to the patent considered, reconsidered, or corrected. In contrast to reexamination proceedings, supplemental examination is not limited to issues relating to patents and printed publications. Other types of evidence may be submitted and considered concerning issues related to other provisions in the Patent Act and issues related to potential inequitable conduct.

Within three months, the PTO would make a determination as to whether the information submitted raises a substantial new question of patentability. If the PTO determines that such a new question has been raised, the patent will proceed to ex parte reexamination where the issues to be considered will not be limited to patents and printed publications.

A request for supplemental examination made by the patent owner is limited to 10 items of information. Additional requests may be made at any time to have additional items of information considered. The request must be accompanied by sufficient information regarding the relevance of each item and its potential impact on the patent.

Fees

To cover the costs of these proceedings, the PTO is proposing significant fees associated with supplemental examination and ex parte reexamination. The proposed fees are as follows.

Request for supplemental examination: $5,180.

Proceeding to ex parte reexamination, if granted: $16,120.

Submission of documents over 20 pages in length: $170.

Submission of documents over 50 pages in length (for each 50 page increment or fraction thereof): $280.

Request for ex parte reexamination (not supplemental examination): $17,750.

Petition in ex parte or inter partes reexamination: $1,930.

The current fee to request ex parte reexamation is $2,520, so the PTO is proposing more than a 700% increase in the fees for that proceedure.

The fees for the request and for proceeding to ex parte reexamination will be due upfront (a total of $21,300) with the ex parte reexamation fee being refunded if the PTO determines that no substantial new question of patentability was raised by the request. In addition, the PTO will refund all but $4,320 for a refused request for ex parte reexamination.

PTO Number Estimates

During FY2011, the PTO received 758 requests for ex parte reexamination where 104 were filed by the patent owner. Thus, the PTO estimates it will receive about 800 such requests in the years going forward, with those filed by the patent owner now being requests for supplemental examination.

The PTO expects that most requests for supplemental examination will be to correct allegations of inequitable conduct. About 2,900-3,300 patent cases have been filed each year in district courts for the past 5 years. Inequitable conduct is pled in about 40% of the cases. Thus, the PTO estimates about 1,430 requests for supplemental examination to be filed annually, with approximately 500 being filed by small entities.

Analysis

The PTO has received a significant amount of criticism for the lack of celerity with handling ex parte reexamination proceedings. The office’s response to this seems to be a 700% increase in the filing fee associated with the request! The PTO estimates of the number of each of these proceedings does not take into account simple economic theory. When the price goes up significantly, the demand for the goods or services goes down.

The PTO’s numbers also do not take into account the Federal Circuit’s recent decision that should cut the number of allegations of inequitable conduct dramatically. The number of supplemental examination requests to deal with this issue should be significantly lower than the PTO’s estimate.

The PTO would respond that each of these proceedings is significantly cheaper than litigation, and that is true. Many ex parte reexaminations are not filed due to litigation, but due to other issues relating to the patent. These requests may not be made with the significant increase in cost. Presumably, the PTO would also argue that it requires the significant increase in the fee because, under the current fee structure, it cannot afford to conduct the proceedings with any speed.

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The Importance of Inventorship

January 23, 2012

In the US, patents must name the inventors of the claims of the patent. Any individual who contributed to the conception of the invention recited in a single claim of the patent must be named as an inventor. If the proper inventors are not named, the paent can be declared invalid. In addition, if the improper addition or exclusion of a true inventor is done with deceptive intent, the patent can be unenforceable due to inequitable conduct.

What may be of greater significance, however, is the rights acquired by each true inventor. Unless the inventors have assigned their rights to another entity, or are under and obligation to do so (such as as a condition of employment), each inventor of even one claim of the patent has an undivided ownership right in the patent. As an owner, each true inventor has the right to assign, license, or otherwise dispose of his or her rights in the invention without the permission or consent of the other owners or inventors.

Falana v. Kent State University

Dr. Falana was hired by Prof. Seed of Kent State to synthesize chiral organic compounds for a research project. The compounds were intended for use in LCD displays. After developing some appropriate compounds, Dr. Falana left to take another position. The University (and a related company) filed a patent application naming Prof. Seed and several others as inventors, but not naming Dr. Falana. Prof. Seed, Dr. Falana, and the other inventors later published a journal article on the invention.

After the patent issued, Dr. Falana inquired as to why he was not named as an inventor in the application. When he didn’t receive a satisfactory response, he filed suit against the owners and inventors of the patent asking the court to order the PTO to add his name to the patent as an inventor. The district court determined that he did qualify as an inventor and issued the requested order. The case then moved to the Federal Circuit.

The question before this court is whether a putative inventor who envisioned the structure of a novel chemical compound and contributed to the method of making that compound is a joint inventor of a claim covering that compound.

The defendants argued that that the conception of the method of making the compound was irrelevant to the question of inventorship of the compounds themselves. The court disagreed.

Where the method requires more than the exercise of ordinary skill, however, the discovery of that method is as much a contribution to the compound as the discovery of the compound itself. This case is simply the application of the well-known principle that conception of a compound requires knowledge of both the chemical structure of the compound and an operative method of making it. Accord-ingly, this court holds that a putative inventor who envi-sioned the structure of a novel genus of chemical compounds and contributes the method of making that genus contributes to the conception of that genus.

The defendants tried another tactic, arguing that the particular commercial compound that embodies the claimed invention was not synthesized until after Dr. Falana left the position so he could not have been an inventor of that compound. The court found this argument to be inapposite. The claims were broader than the particular commercial compound. The relevant inquiry is whether Dr. Falana contributed to the conception of the broad genus recited in the claims, not the particular compound that is used commercially.

Perhaps if the claims had been narrowly directed to the commercial compound, Dr. Falana would not be a proper co-inventor. This is another issue to ponder when preparing patent applications and strategies for drafting claims.

Posted in Court Decisions, Federal Circuit | Leave a Comment »

Track I Accelerated Examination

January 18, 2012

Passage of the America Invents Act in late 2011 allowed the PTO to proceed with its earlier announced plan for prioritized examination. For payment of a rather large fee and several other requirements, an applicant can get a final PTO determination of patentability of his application in about a year. New Commissioner for Patents Peggy Focarino provided some information on the status of the program in a post on the Director’s blog several weeks ago. The information she provides is through the end of 2011.

As of that date, 1,694 petitions had been filed. The PTO took an average of 40.8 days to process the applications from petition to completion of the pre-examination phase. This compares favorably with the 69.6 days required for a standard application; the office, however, is working to cut down on this time. Of the petitions filed, 1,231 had been decided by the end of the year, with 1,218 being granted (98.9%).

First office actions have been issued in 648 of these applications an average of 30.7 days after approval of the petition, or 66.4 days after filing of the petition. The PTO goal is 3 months from petition filing; they have met this in every case.

Notices of Allowance have been mailed in 23 applications, an average of 39.2 days after petition approval. Final rejections have been mailed in 3 applications, an average of 34.3 days after petition approval.

For those applicants or practitioners concerned about whether Track I applications will be treated differently from others in terms of grant/denial rate, our examiners are being given exactly the same training, credits and incentives to accurately examine Track I cases as for all other cases, and no training, credits or incentives are being given to bias examiner decisions in any way. And as for the data, given the statistics provided above, so far there is no basis to believe there is any difference in result for Track I versus non-Track I processing, other than the significantly faster responsiveness.

So far, the PTO is performing admirably in its prioritized examination applications, easily beating the one year goal to final action. The first patent issued under the program was filed Sept. 30, 2011 and issued Jan. 10, 2012, just 103 days (U.S. Patent No. 8,094,942 to Google). The program is limited to 10,000 prioritized application during FY2012. It will be interesting to see if the numbers for “regular” applications is affected by the program.

For applicants who need a quick decision on an application and have the money to participate, accelerated examination appears to be a great option so far.

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Virginia State Bar Section on Intellectual Property Law Law Student Writing Competition

January 12, 2012

Virginia State Bar Section on Intellectual Property Law Law Student Writing Competition

The Intellectual Property Section of the Virginia State Bar has a total membership of over 1,400, including both lawyers and members of the judiciary. The Intellectual Property Law Student Writing Competition seeks to promote academic debate and the dissemination of ideas and scholarly writing in the field of intellectual property. The Competition is sponsored by the Intellectual Property Section of the Virginia State Bar.

Prize

$4,000 cash and publication on the Section’s website.

Eligibility

The Competition is open to all students enrolled and in good standing during the 2011-12 academic year (including December 2011 graduates) at (i) any Virginia law school, or (ii) a law school outside Virginia as a resident of Virginia (with proof of residency). Articles must have been written solely by the entrant while enrolled in law school.

View the complete rules at www.vsb.org/site/sections/intellectualproperty/view/writing-competition/.

More information: flyer and rules.

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PTO to Open Detroit Satellite Office by July

January 11, 2012

The PTO today announced plans to open the long-awaited Detroit satellite office by July.

Detroit was announced as the site of the satellite office in December 2010. By April, Congress had conspired to appropriate PTO funds causing the agency to postpone the opening of the office indefinitely. The America Invents Act permits the PTO to open 3 satellite offices within the next 3 years. With the resources now available, the PTO is moving forward with plans for Detroit.

Given the state of the economy in Michigan, Detroit is a good choice for the first satellite office. The unemployment rate in Michigan dropped below 10% in November for the first time in 3 years. There is a large number of unemployed engineers and scientists in the area, a world-renowned research university (my alma mater!), and not a large legal market. In Washington, DC, patent examiners who spend some time at the PTO can command large salaries at area law firms. That won’t be a problem in Detroit.

It is also a good move for President Obama politically. While Michigan has been solidly Democratic for the last few elections, the state did elect a Republican governor in 2010. The Republican presidential nominee may end up being someone who was born in Michigan and whose father served as the state’s governor. The choice of Detroit can’t hurt his chances in the state.

In November, the PTO requested comments on locations for other satellite offices that it plans to open in the coming years, assuming the funds are available. Comments must be provided by January 30.