Archive for April, 2010

Another Bad Inequitable Conduct Decision

April 28, 2010

Yesterday, the Federal Circuit issued yet another split panel decision on inequitable conduct.  Avid Identification Systems, Inc. v. Crystal Import Corp.

The duty of disclosure to the PTO is governed by 37 C.F.R. § 1.56 (Rule 56).  Rule 56 requires that information that is “material” to the claims of a patent be disclosed to the PTO.  This would include search reports, prior art references, and similar information.

“Material” Information

What exactly is information “material” to patentability?  Prior to 1992 amendments, Rule 56 defined “material” information as:

Such information is material where there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent.

The rule was amended in 1992 to make the standard more objective.  Currently, Rule 56 specifically sets forth the standard for what constitutes materiality:

(b) Under this section, information is material to patentability when it is not cumulative to information already of record or being made of record in the application, and

(1) It establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or

(2) It refutes, or is inconsistent with, a position the applicant takes in:

(i) Opposing an argument of unpatentability relied on by the Office, or

(ii) Asserting an argument of patentability.

A prima facie case of unpatentability is established when the information compels a conclusion that a claim is unpatentable under the preponderance of evidence, burden-of-proof standard, giving each term in the claim its broadest reasonable construction consistent with the specification, and before any consideration is given to evidence which may be submitted in an attempt to establish a contrary conclusion of patentability.

Unfortunately, the Federal Circuit refuses to read the amended rule, as numerous panels continue to use the old “reasonable examiner” standard that is broader than the standard set forth in the current rule.  Indeed, all three judges on the panel in Avid used the incorrect “reasonable examiner” standard in finding that a public disclosure of the invention that did not affect its patentability was “material” under the old standard.

Who Owes the Duty of Disclosure?

Who owes the duty of disclosure was the issue at stake in Avid.  The Federal Circuit has previously ruled that the duty of disclosure does not apply to corporations, but only individuals.  Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009).  Rule 56 states that the duty is owed by individuals associated with the filing or prosecution of the patent application.

(c) Individuals associated with the filing or prosecution of a patent application within the meaning of this section are:

(1) Each inventor named in the application;

(2) Each attorney or agent who prepares or prosecutes the application; and

(3) Every other person who is substantively involved in the preparation or prosecution of the application and who is associated with the inventor, with the assignee or with anyone to whom there is an obligation to assign the application.

In Avid, Dr. Hannis Stoddard was the founder and president of the plaintiff, a closely held corporation.  He came up with a new idea for a system for identification and processing of recovered animals.  He hired three engineers to come up with a way to implement his idea.  They did so and filed a patent application in August 1991 for the new invention with only the three engineers named as inventors. 

Dr. Stoddard had demonstrated some of the company’s technology at a trade show in April 1990.  This public disclosure more than a year prior to the filing of the patent application was not disclosed to the PTO.  It was, however, disclosed to the jury in the infringement trial.  The jury determined that the disclosure did not include all of the elements in the patent claims and did not invalidate the patent.

The district court, however, determined that this disclosure was the closest prior art, was thus material to patentability of the claims, and that it was withheld with deceptive intent.  The court therefore held the patent to be unenforceable due to inequitable conduct.

On appeal, the patent owner did not dispute that the disclosure was withheld with deceptive intent.  The sole issues were whether the disclosure was material and whether Dr. Stoddard owed the duty of disclosure to the PTO.

Under the incorrect “reasonable examiner” standard, all three judges on the panel concluded that as the closest prior art, the disclosure was material to patentability.  Where the panel split, however, was over whether Dr. Stoddard owed the duty of disclosure.

Dr. Stoddard was not an inventor or the attorney or agent who prepared or prosecuted the application.  The question then was whether he was a “person who is substantively involved in the preparation or prosecution of the application and who is associated with the inventor, with the assignee or with anyone to whom there is an obligation to assign the application.”  The panel majority held that he was.

We read “substantively involved” to mean that the involvement relates to the content of the application or decisions related thereto, and that the involvement is not wholly administrative or secretarial in nature.

The dissent noted that there was no evidence in the record that Dr. Stoddard was involved in any way in the preparation or prosecution of the patent application.  The majority cited the district court’s finding that Dr. Stoddard was the founder and president of the patent’s assignee, a closely held company, and that he hired the inventors to develop his idea.  They inferred his involvement in the patent application because of his involvement in “all aspects” of the company.  There were also two communications relating to a corresponding European patent application or rights in Europe on which Dr. Stoddard was a recipient.

As far as other damning facts, the district court found Dr. Stoddard to lack credibility as a witness, that his memory was selective, and that he didn’t acknowledge certain incontrovertible events.  He also was involved in the demonstration that was deemed to be the material prior art.

In dissent, Judge Linn argued that Dr. Stoddard was not substantively involved in filing or prosecuting the application.

Because one cannot assess whether information is “material to patentability” without knowledge of the technical details or legal merits of an application, it should be self-evident that when Rule 56(c)(3) talks about persons who are “substantively involved” it is referring to those persons who are both (1) engaged in the preparation or prosecution of an application and (2) sufficiently apprised of the technical details or legal merits of the application as to be able to assess the materiality of any information they may know or discover as the application is prepared or prosecuted.

He argued that the majority was reading “substantively” out of the rule.  Because there was no evidence that Dr. Stoddard had knowledge of the technical details or legal merits of the patent application, he could not know that the prior art demonstration was material to the patentability of the claims.


These decisions are getting out of hand.  The definition of “material” has expanded to include nearly everything related to the application, including the PTO’s own correspondence from potentially related applications.  The standard for what consitutes intent to deceive is a moving target.  Now, the definition of who is bound by the duty of disclosure has expanded.  Until Congress fixes inequitable conduct law, the only solution is to dump huge quantities of information on patent examiners.  I know they love that.


Report: Patent Reform Passage Near in Senate

April 27, 2010

IP Watchdog is reporting that Senate passage of the patent reform bill, S. 515, may be near.

He reported yesterday that an agreement has been reached between the chair and ranking member of the Senate Judiciary Committee, Sens. Patrick Leahy (D-VT) and Jeff Sessions (R-AL), on changes to the patent reform bill.  These changes have won the support of Sen. Sessions.  The details of these changes are not yet available.

In a disturbing development on patent reform (albeit par for the course in the current Congress), Sen. Leahy seems to be unable to secure floor time before the entire Senate to debate the bill.  That doesn’t seem to be an impediment to its passage, however.  IP Watchdog reports that Sen. Leahy plans to “hotline” the bill.  I was not familiar with that term.  Apparently it means that the bill’s sponsor will ask for unanimous consent from the entire Senate to simply deem the bill as passed.  Not only will there be no debate on the bill in the Senate, but there will be no record of votes on the bill.

It gets worse.  This isn’t like a voice vote where the chair calls the vote and those in favor say “aye”.  Instead, anyone dissenting from the procedure must call the leader’s office and state that they object to the procedure.  As IP Watchdog characterizes it:  “instead of requiring explicit unanimous consent to pass a bill, the hotline process really only requires a lack of dissent.”

Whether or not you agree with the merits of the patent reform bill, this is simply politics at its worst.  We need some kind of patent reform, but we need it to be done in the open.  We need open debate and open on-the-record votes.  Government that operates in secret is not accountable to the people that elect the leaders.  Although I do not object to the merits as strongly as Mr. Boundy, I concur with his call to voice your displeasure with this situation to your congressional representatives.  This piece of reform legislation is too comprehensive for passage based on back room deals.

The only good news on this front is that we don’t yet know what will happen in the House.  But, I am not overly optimistic that this sort of political gamesmanship won’t happen there as well.  And the House passed a patent reform bill in the last Congress that died in the Senate.

Federal Circuit to Hear Inequitable Conduct Case En Banc

April 26, 2010

Today, the Federal Circuit issued an order in Theresense, Inc. v. Becton Dickinson and Co. granting the plaintiffs’ petition for rehearing en banc.  Specifically, the court asked the parties to consider six issues:

1.  Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced?

2.  If so, how? In particular, should the standard be tied directly to fraud or unclean hands? See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard for fraud or unclean hands?

3.  What is the proper standard for materiality? What role should the United States Patent and Trademark Office’s rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?

4.  Under what circumstances is it proper to infer intent from materiality? See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc).

5.  Should the balancing inquiry (balancing materiality and intent) be abandoned?

6.  Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context.


The plaintiffs have not had much luck in this case.  They sued the defendants for infringement of a number of patents.  The district court and the jury found the patents to be invalid for anticipation, obviousness, and violating the written description requirements.  The court also held that U.S. Patent No. 5,820,551 was unenforceable due to inequitable conduct based on failure to disclose statements made to the European Patent Office in a revocation proceeding for a European patent.  The court held that these statements were directly contradictory to statements made to the PTO in prosecution of the ‘551 patent.  A Federal Circuit panel affirmed.

 Judge Linn issued a lengthy dissent where he argued that the district court erred in its factual determinations in this case.  The plaintiffs had an adequate explanation for how the statements were not contradictory and why they were not disclosed to the PTO.  He also argued that there was no intent to deceive on the part of the plaintiffs because they did not recognize that the statements were material.  The trial court simply disagreed with the plaintiffs’ interpretation and explanation of the facts.

Inequitable Conduct

Inequitable conduct is a finding by the court that the patent applicant violated the duty of disclosure to the PTO during prosecution of the application.  The applicant and other related parties may have directly misled the PTO or they may have withheld information that was considered material to the patentability of the patent.  If this is done with an intent to deceive the PTO into granting the patent, the penalty is that the entire patent is unenforceable.

This case is not the first time that Judge Linn has called for the court to revisit the standard for inequitable conduct.  He also made such a request last year in Larson Manufacturing v. Aluminart Products.  In Therasense, he notes that “[o]ur circuit already entertains five different standards for materiality.”  The majority seemed to want to add another standard that heightens the disclosure requirement for close cases.

Hopefully, this case will give the court the opportunity to fix an issue that has been called “a plague.”  Surprisingly, although this is an important issue to Sen. Orrin Hatch, it was not a part of the bill that the Senate Judiciary Committee passed last year.

Guest Post: David Boundy – Patent Reform That Hurts Small Inventors and Small Businesses

April 21, 2010

The following is a guest post of David Boundy who is a Vice President and Assistant General Counsel for Intellectual Property at Cantor Fitzgerald.  The views he expresses here are not those of Cantor Fitzgerald or its clients.  His post follows:

Yesterday, a major effort was launched to ram patent legislation through the U.S. Senate without crucial changes needed by small businesses. The article at bottom describes the “public relations campaign” organized by the Senate Judiciary Committee and its chairman, Sen. Patrick Leahy (D-VT), with the help of America’s largest corporations. Small companies and individual inventors are not mentioned in the article, because they will be badly hurt. A few phone calls from your members this week could make a huge difference.

For years, small businesses, start-ups, entrepreneurs and independent inventors have asked Sen.. Leahy to make changes to his bill to accommodate their concerns. Leahy’s bill essentially repeals the one year “grace period” for small companies (called “first to file” in the bill), and adds a “post-grant review” that would be devastating to those of us with limited resources. We have received occasional lip service, but that is all. The weak grace period and post grant review remain in the bill.

Now the proponents know they have a very short window of opportunity. If the bill does not go to the Senate floor soon, time will run out. Leahy will soon have the task of shepherding a Supreme Court nomination through the Senate, which will take weeks, maybe months. Because of Congressional elections in November, members of Congress will go home to campaign in early October. If the patent bill does not pass soon, it will not pass at all.

And that is our leverage. To bring the bill to the Senate floor, Leahy needs “unanimous consent” of all Senators. If one Senator objects, it will take too long to overcome that objection.

Therefore we need to act now. Every American innovator needs to call his or her U.S. Senators and ask them to object to consideration of this bill until changes are made to accommodate small patent holders – no First to File, no Post Grant Review, no changes that tilt the balance of power toward large infringers. All it takes is for one Senator to object — then the bill will either have to be changed or die.

We urge you to take five minutes to call both your Senators. It is VERY easy. Here is how.

1) Call the U.S. Capitol at 202-224-3121 and ask for your Senator’s office; (you can identify your Senators at

2) When you reach your Senator’s office, ask to speak to “the staffer who handles patent reform.”

3) When you are put through to that person, give them your name and address, and urge that their boss object to “unanimous consent” on the patent bill (S. 515) because it does not make the changes that small businesses have requested – specifically, removing the first to file and post grant review provisions. Explain that these provisions will allow infringers to take intellectual property without practical recourse by the small patent holder. Ask if the Senator will agree to do that – to object until the bill is corrected for small businesses. Get the staffer’s name, and if possible, their email address. Share your email address if you would like to do so, and ask the staffer to send you any future information regarding the patent bill’s status.

4) If you reach a voice mail box, leave the message above and ask for a return call to discuss the issue.

5) Repeat the process with your other Senator. Both Senators are equally important – either may say the magic words, “I object” to Senator Leahy’s unanimous consent request.

Doing this via telephone is the only effective way at this point. Email may not find its target for a long time. Congressional offices get hundreds of emails a day. Sorting them out and getting them to the right staffer can take a week or more. Making a phone call is the one way you can know that your message has been received. We encourage you to take the time today to make a call to each of your Senators. It is actually quite easy, and most Senate offices are extremely professional and responsive.

Also, if you would like to share the results of your call back with us, please do so that we can help keep track of the responses. David Boundy,

Thank you for taking time to act on this crucial matter. Thank you for working with us to protect small business innovation today, before it’s too late.

 I have also attached a one-pager that gives the substantive analysis that some of your members might need.

Boundy also references an article that appeared in BNA (subscription service) yesterday that referenced a public relations campaign by the Senate Judiciary Committee in an attempt to claim broad support for the pending bill.

Department of Commerce Supports Patent Reform

April 21, 2010

Let me start by saying that there are a number of provisions in the Senate patent reform bill that I strongly support.  That being said, the Department of Commerce released a White Paper suggesting that patent reform will wildly benefit the US economy by significantly reducing patent pendency and reducing litigation costs.

This is hardly a surprise given that the PTO is part of the Department of Congress.  The paper was written by two PTO officials and the Commerce Department’s chief economist.

The good thing about the paper is that it suggests that the Obama Administration understands the role of innovation in our economy.  This can hardly be said for many in the anti-patent movement.  The paper notes that wages in highly innovative industries such as computers, electronics, and chemicals grew at nearly two and a half times the national average at US companies from 1990-2007 and 76% of startup managers reported that venture capitalists consider patents to be very important to their funding decisions.  The paper aknowledges that patents can be especially important to R&D investment in the biotechnology, pharmaceutical, and medical device industries.

Next, the paper recognizes that the PTO’s application backlog, long pendency, poor quality patents, and high cost of litigation are significant problems affecting investment in innovation.  The paper cites a recent work by the UK Intellectual Property Office that concludes that “backlogs of the sort that the USPTO is currently facing could lead to ‘foregone innovation,’ costing the economy billions of dollars annually.”

The paper continues by noting that the high costs associated with litigating a patent may preclude a number of invalid patents from being adjudicated as such.  Many competitors may simply wait until someone else challenges the patent and thereby reap the benefits of an invalidity judgment.  The paper cites litigation costs of $5 million or more per side in cases where $25 million is at stake.  The paper also cites civil litigation rules as hampering patent challenges by competitors.

Patent Reform

So, what is the solution to all of these woes besetting the patent system?  Why, the patent reform bill currently pending in the Senate of course.

First, the paper supports granting the PTO fee-setting authority for which the agency has long lobbied.  The paper suggests that patent applicant fees are too back-loaded.  Issue and maintenance fees subsidize a large share of the cost of applications that are abandoned.  The majority of the PTO’s work is at the examination stage, but current filing and examination fees only cover about a third of the cost of undertaking those tasks.  Very little work is required in the case of processing maintenance fees, and these are paid at the whim of the applicant.  During the recent economic downturn, many patents were abandoned for failure to pay maintenance fees.  Since the PTO relies so heavily on this revenue, this has significantly contributed to the PTO’s recent revenue woes.

The paper cites current patent pendency at 34 months, which we know is not the real number given how the PTO calculates RCE’s as new applications and applicant priority claims.  The real number is significantly higher.  The paper then makes the outrageous statement that the 34 month number could be reduced by 40% by simply giving the PTO fee-setting authority.  This would put average pendency at the absurd level of 20 months.  That is a pipe dream.  Not surprisingly, the paper provides no support for this assertion.

Next, the paper cites post-grant review as the solution to the problem of high cost litigation.  The paper suggests that the costs of post-grant review will be 50-100 times lower than for patent litigation.  This means that for the $25 million dispute cited above, the costs to each side would be only $50,000-100,000.  Again, that seems pretty unlikely.

[R]esearchers believe the cost-benefit ratio of adopting an efficient system of enhanced post-grant review procedures, such as that created by patent reform, could be as high as 1 over 15 — in other words, so long as PGR costs do not exceed $100,000, benefits are expected to range, conservatively, from a high of $15 to a low of $8 for each $1 invested.

Wow!  In that case, by all means let’s do it!  The paper asserts that one-third to one-half of the patents challenged in a post-grant review procedure would be held to be invalid, thus saving future litigation costs surrounding those patents. 

Finally, in another misleading statement, the paper recites that the time for a patent to reach final judgment in a district court action is 8 years on average from patent grant to final resolution of validity.  In a quarter of the cases, the time is more than 11 years!  The post-grant review procedure, by constrast, would resolve validity within a year of the patent grant. 

This would suggest that average district court pendency is 8 years with many cases lasting more than 11 years.  Post-grant review is such a significantly better procedure because it can cut 7 years off the average.  What the paper fails to note is that most patent lawsuits are not filed on the day the patent is granted.  In fact, they may be filed one year, two years, five years, ten years, or longer after the patent is granted, indeed at any time during its effective life.


Again, as I noted above, I am not completely against patent reform or the current Senate bill.  I think the bill has many flaws that should be addressed, but there are many improvements there as well.

The White Paper, unfortunately, is not effective in advocating for passage of the bill because it contains too many over-the-top assertions and outrageous predictions.  There is no way that by simply providing the PTO with fee-setting authority that all of its current ills will be resolved:  the backlog will disappear and pendency will drop to 20 months.  Especially given that the bill calls for a relatively small number of test cases for post-grant review during the first few years, it is unlikely that the procedure will solve all of the problems with patent litigation.

A more effective paper would have cited smaller projected improvements based on passage of the reform bill.  As we know, that’s not how the political game is played.

Prior Art Searches

April 19, 2010

It’s been about a year since I wrote about what to do if you have a new idea or invention.  A question that is often asked by new inventors is:  should I do a prior art search before filing a patent application?  The answer, as in most areas of law and life in general, is that it depends.

For individual inventors and smaller companies including start-ups, in most circumstances, I would suggest that yes you should do a prior art search.  Many larger companies have a number of scientists and technologists who are familiar with the technology and what their competitors are doing.  They can also absorb the potential risks of not doing a prior art search.  Most small entities and start-ups do not and can not.

Many, if not most, new inventors are convinced that they are the only ones that have thought of the idea that they seek to patent.  They believe that they have had a flash of insight that no one else has had.  They may even do a bit of Internet research to convince themselves that they are in the clear and that there is no need to do a prior art search.  They are often surprised by the results when they do have a search conducted.

The risks of not doing a search are several.  First, and most importantly, if you plan to commercialize or market the invention as a product or service, you don’t want to get slapped with an infringement lawsuit right out of the gate.  These suits are extremely expensive even if you don’t get hit with a large damage award.  There is a risk that you will not be able to afford to defend such a suit and that all of your hard work in developing the invention, getting it through the prototype stage, and getting it to market would be wasted.  Usually, there is a significant monetary and time investment involved with these steps.  There is also a risk that a court could issue an injunction that would prohibit you from making, using, selling, or offering the invention for sale.

Second, conducting a prior art search prior to preparing a patent application may make prosecution of the application more efficient and cost-effective.  By knowing the closest prior art, the patent application and the claims may be prepared more strategically to take advantage of areas of patentability.  Claims may be prepared that get close to the prior art without encroaching on it.  It may be possible to develop arguments and strategies for convincing the patent examiner that the invention is non-obvious vis-a-vis the prior art. 

You may find that the invention needs to be reconfigured to “design around” patents that are found.  This could add to the value of the invention and potentially give you a competitive advantage.  You may find, however, that someone else has a patent that directly prevents you from patenting your invention.  In such a case, you may determine whether to abandon your endeavor or seek to partner with or secure a license from the patent holder.

The main disadvantages of conducting a prior art search are that it will cost some money and that any material prior art that is uncovered must be disclosed to the Patent Office during prosecution of any patent application that is filed for your invention.  The cost is usually not significant in the overall scheme of bringing a new product or service to market and preparing and prosecuting a patent application.  In fact, a good prior art search can make these endeavors more efficient.  Most patent applicants are looking for strong patent protection in which case it is not a disadvantage to bring prior art to the patent examiner’s attention.  This will permit the patent to be “vetted” over that prior art.


A patent attorney can assist you in having a prior art search performed.  A brief written description and possibly a few drawings or sketches of the invention should be prepared.  This information is provided on a confidential basis to a professional patent search firm that will conduct the patent search.  These firms are usually located in Northern Virginia near the PTO and are staffed with engineers and scientists, at least some of whom may be former patent examiners.  The search firm provides the information to a person with skill in searching the subject matter of the invention who conducts the search.

A good “freedom to operate” and patentability search takes a couple of weeks to complete and usually costs less than $2,000, often less than $1,000.  For a “freedom to operate search,” the searchers will search that claims of US patents that are currently in effect.  For a patentability search, the searchers will also search for older US patents, foreign patents, and non-patent literature that may disclose the invention.

The results will typically include a stack of the closest 20-30 patents and other prior art references.  My practice is to provide these results to the inventor with instructions to review them in detail and to bring any that the inventor believes warrant further review by me to my attention, in any event the closest 3-4.  This saves on attorney time of having to review the entire stack.  The inventor is usually in the best position to determine any differences or similarities between the references and the invention.  At that point, we determine how best to proceed with the matter based on the search results.

One might reasonably ask why the inventor or the attorney cannot themselves conduct the prior art search on Google, the PTO website, or another search engine.  One answer is that it is far more efficient for these experts to perform the search than for the attorney to do so.  Their hourly rates are typically much less.  Second, I am always amazed that the professional searchers find prior art that I or the inventors have not been able to find.

In sum, I almost always advise a new inventor, small company, or start-up to have a prior art search done prior to marketing the invention or preparing a patent application.  In my opinion, the advantages of such a search far outweigh the risks or costs of doing so.

Edward DuMont Nominated to Federal Circuit

April 15, 2010

Yesterday, the White House announced that President Obama has nominated Edward DuMont to fill the upcoming vacancy on the Federal Circuit when Chief Judge Michel retires at the end of May.

DuMont is a partner at WilmerHale where he is a Supreme Court and appellate litigator.  He has argued 18 cases before the Supreme Court.  His practice includes appeals in a diverse array of subject areas including patent, trademark, antitrust, and constitutional issues.  Prior to joining WilmerHale in 2002, DuMont worked in the Justice Department as an Assistant to the Solicitor General and as Associate Deputy Attorney General where he handled cases on computer crime, e-commerce, and privacy.  After graduating from Stanford Law School, DuMont clerked for Judge Richard Posner on the Seventh Circuit.

While DuMont does not appear to have an extensive background in patents and patent law (as many patent practitioners were hoping), Patently-O reports that his recent patent appeals include Tivo v. Echostar, Princo v. ITC (pending en banc rehearing), Airgo IP v. ArvinMeritor, Agfa Corp. v. Creo Prods., Purdue v. Endo, US Philips v. ITC.  He does appear to have a distinguished civil litigation career, especially at the appellate level.

Judge O’Malley’s nomination is still pending in the Senate as well.  No date has yet been set for her confirmation hearing.  Her nomination has garnered fairly wide-spread support.  It will be interesting to see whether the bar is similarly enthusiastic about Mr. DuMont’s nomination.

Justice Stevens to Retire From Supreme Court

April 9, 2010

For the second time in less than a year, there will be a vacancy on the U.S. Supreme Court.  Justice John Paul Stevens has announced that he will retire from the Court at the end of its current term.  Justice Stevens, who turns 90 on April 20, was appointed to the Court by President Gerald Ford in 1975. 

Justice Stevens is the second oldest man ever to serve as a Supreme Court justice, trailing only Justice Oliver Wendell Holmes, who was less than two months shy of his 91st birthday when he retired from the court in 1932.  Depending on the effective date of his retirement, he will be the second or third longest serving justice with a tenure of nearly 34 and a half years.  Justice William O. Douglas is the longest serving Supreme Court justice at 36 and a half years.

Impact on Intellectual Property Law

Justice Stevens wrote a number of important patent and intellectual property law opinions as a member of the Supreme Court.  Some of the highlights are listed below.

Justice Stevens authored the Court’s 6-3 1978 opinion in Parker v. Flook where the Court reversed a Court of Customs and Patent Appeals decision in holding that a claim to a method for updating alarm limits in a catalytic converter was not patent eligible subject matter because the only novel feature of the invention was the use of a particular mathematical algorithm.  The algorithm was a principle or law of nature that could not be patented.  The case has been rightly criticized for conflating the § 101 analysis with a prior art analysis under §§ 102 and 103.

Justice Stevens wrote a dissenting opinion in the Court’s 1981 6-3 opinion in Diamond v. Diehr.  In Diehr, the court held that the execution of a physical process, a method for curing rubber, controlled by running a computer program was patentable.  Justice Stevens’ dissent again seems to argue that because he did not believe the process to be novel, it does not contain patent eligible subject matter, another confusion of the issues.

He also joined Justice Breyer’s dissent in the LabCorp. case.

In other patent cases, Justice Stevens also wrote the Court’s opinion on the on-sale bar in Pfaff v. Wells in 1998.  In Pfaff, the Court clarified the standard that the invention must be “ready for patenting” before it can be barred as having been on-sale for more than a year.  He also wrote the opinion on patent misuse and anti-trust in Illinois Tool Works in 2006.  Justice Stevens dissented in Microsoft v. AT&T where the Court ruled that Microsoft was not liable for infringement under § 271(f) for shipping master disks overseas.

In the copyright arena, Justice Stevens wrote the opinion permitting time-shifting for “VTR’s” in the 1984 Sony decision.  He dissented from the Court’s opinion in Eldred v. Ashcroft where the Court permitted Congress’ extension of the copyright term.

Justice Stevens also wrote the opinion in the trademark dilution case Moseley v. Victoria’s Secret in 2003.

Professor Joe Miller of Lewis & Clark Law School has speculated that Justice Stevens may be writing the long-awaited decision in Bilski.   That does not bode well for patentees, considering his positions in Flook, Diehr, and LabCorp.

Who’s Next?

President Obama will get his second opportunity to nominate a member of the Supreme Court.  Although Justice Sotomayor has some experience with intellectual property, it is unlikely that IP will be a high priority in finding a successor.  Still, having some experience with intellectual property would make us less nervous when the Court reviews Federal Circuit decisions as it is now doing with some regularity.

PTO Launches Ombudsman Program

April 7, 2010

Yesterday, the PTO announced the launch of a new ombudsman pilot program.  This is the latest intiative by Director David Kappos to work cooperatively with patent applicants in conducting the business of the Office.

The program is designed to assist patent applicants “when there is a breakdown in the normal prosecution process” and is not meant to replace the normal channels of seeking assistance from examiners and supervisory patent examiners (SPEs).  Only when the applicant is unable to get assistance from those channels should the applicant contact the ombudsman. 

The PTO also indicates that general questions should still be directed to the appropriate customer service center.  The ombudsman program is not designed to provide general information or to replace customer service centers.  Instead, the ombudsman is designed to assist with issues regarding specific applications where the applicant cannot get a satisfactory answer or be directed to the appropriate party by the normal routes of inquiry.  Similarly, the ombudsman is not designed to deal with the merits of a patent application, but is rather for resolving problems dealing with procedures, such as unusual delays or the like.

To participate in the program, the applicant fills out an electronic form on the PTO’s website that includes the general nature of the problem.  The PTO promises call the applicant within one business day of receiving the form.  The form should include only general information because information about the merits of a pending application will be placed in the application file. 

The Ombudsman Program is staffed by SPEs, Training Quality Assurance Specialists, and subject matter experts.  The initial pilot program is slated to run for one year at which point the PTO will evaluate the program.  Thus, the PTO is also accepting comments regarding the procedure.

As anyone who has dealt with the PTO (or other governmental agencies) over the years knows, it can at times be quite frustrating.  It is often difficult to know who at the PTO to contact regarding specific problems.  In fact, often the person you contact at the PTO doesn’t even know to whom to refer the problem.  In such cases, the problem can often be unresolved resulting in frustration for applicants.

This program sounds like a great idea if it is well implemented.  Having a PTO director who has dealt with the agency from the other side is great.  I look forward to other initiatives to improve the agency’s ability to interact with applicants and resolve problems quickly and efficiently.

The Federal Register notice regarding the program is available here.

PTO Proposes to Extend Provisional Applications to 24 Months

April 5, 2010

Notwithstanding the fact the the patent statute provides that provisional applications expire 12 months after their filing date, the PTO published a request for comments in the Federal Register last week that would effectively extend the term of a provisional application to 24 months.  The proposal is a bit complicated, so stay with me.

Under current practice, in order to gain the benefit of a provisional application, an applicant must submit a nonprovisional application within 12 months of filing the provisional application, or must at least convert the provisional application to a non-provisional application.  The non-provisional application may be filed without the required filing fees or an executed oath or declaration.  In such a case, the applicant is given two months to respond to a PTO “Notice to File Missing Parts” by including the missing fees and declaration.  For additional fees, the time period may be extended up to 5 additional months.  Given that the PTO usually takes a couple of weeks to send the Notice, the applicant can file the missing information up to about 7 1/2 months after the non-provisional filing.  The surcharge for the benefit of late filing is $130, plus $2,350 for the 5 month extension of time (plus the application filing, examination, and search fees), although these fees are reduced by half for small entities.

Under the new proposal by the PTO, a non-provisional application would still need to be filed within 12 months of the provisional application filing date.  The non-provisional application must include at least one claim, an executed declaration, and the basic filing fee (currently $330/$165 small entity).  In addition, the applicant could not request non-publication of the application.  The new procedure would permit the applicant up to 12 additional months to decide whether to move forward with the application by filing the search and examination fees (currently $760/$380 small entity) and any excess claim fees.  At the end of the 24 month period, the applicant can file additional claims and other disclosure by way of a preliminary amendment.

The purpose of the new procedure would be:

permitting additional time to determine if patent protection should be sought at a relatively low cost and by permitting applicants to focus efforts on commercialization during this period.

The PTO notice indicates that about 50% of all provisional applications are currently abandoned without a corresponding non-provisional application being filed and that the percentage has been declining over time.  Some applicants use the Missing Parts procedure to effectively extend the time of the provisional application, and some even file one or more continuation applications to extend the time even further.  The PTO believes this procedure would result in significant savings to applicants and focus PTO resources on applications that applicants want to have examined.


It seems that an easier solution would be to have Congress amend the statute to permit provisional applications to last for 24 months.  This is a bit complicated however.  First, the Paris Convention requires that any foreign or international patent application claiming priority to a provisional application must be filed within 12 months of the provisional filing date.  This is not and cannot be changed by the new procedure.

Second, 35 U.S.C. § 102(b) creates a statutory bar to inventions that are publicly disclosed, offered for sale, or that appear in a printed publication more than 12 months prior to the applications earliest priority date.

Provisional applications are supposed to permit an applicant to file an application and then spend the next 12 months seeking to commercialize the application.  The PTO contends (and many would agree) that this is not enough time.  Unfortunately, many (probably a majority) of provisional applications are not worth the paper (or pixels) they are written on.  Many applicants write and file their own provisional applications and only turn to a patent attorney for assistance once a non-provisional application is required.  Hopefully, this is done prior to first public disclosure or commercialization.  Given the 12 month provisional pendency, this is typically the case.  The inventor files the provisional, then seeks to commercialize the application.  Under the PTO’s newly proposed procedure, however, the inventor may instead wait to seek an attorney’s assistance near the end of the 24 month period.  By that time, it may be too late.

The PTO’s notice does suggest that provisionals be as complete as possible, but few inventors read such notices.  The bottom line:  if this procedure becomes effective, don’t wait to seek assistance from an attorney until after the 12 month statutory bar period.  If you write your own provisional application, BE CAREFUL.  Provisional applications only provide a benefit to the applicant when they provide as complete and enabling a disclosure as is available at the time of filing.  Any new claims or disclosure added later must be supported by the original provisional (or non-provisional in the case of the new procedure) or they may be rejected as adding new matter.

Hal Wegner has prepared a paper warning about these issues.

I would submit that a better suggestion would be one that the PTO considered last year:  deferred examination.  In my experience, most applicants would prefer quicker PTO examination, not slower.  The PTO could, however, implement a procedure to give applicants more time by implementing deferred examination where the search and examination fees could be deferred for a specific period of time to give applicants who desire it this additional time.

The PTO is accepting comments on the new procedure until June 1.