Archive for October, 2010

Federal Circuit Caseload – FY2010

October 27, 2010

The Federal Circuit has provided a statistical update on its caseload through the end of the 2010 fiscal year.  Here’s a brief rundown.

There were 399 appeals filed in patent infringement cases from district courts, nearly identical to 2009’s 398, and the highest level since 2006.  Of those, only 220 (60%) were decided by the court on the merits, with the remainder either settled, mediated, dismissed, or disposed of in another manner.  The court issued 130 (59%) precedential decisions, 48 non-precedential decisions (22%), and 42 summary orders (19%).  The percentage of cases being dismissed by summary orders, such as a Rule 36 affirmance without opinion, is increasing.  There were also 65 patent appeals from the PTO.

For all cases, the Federal Circuit had a 12% reversal rate, with another 12% of cases reversed-in-part.  In appeals from district courts, 15% were reversed, and another 22.5% were reversed-in-part.  This means that 37.5% of the district court cases appealed to the Federal Circuit are sent back to the district court to reconsider at least some part of the case. 

On a positive note, the court is disposing of appeals at a fairly quick rate given that it is working severely short-handed.  District court appeals continue to require an average of 11.0 months from docketing to disposition, while appeals from the PTO (which include trademark appeals) are down to just 8.2 months on average from docketing to disposition.

The Federal Circuit’s high district court reversal rate (or reversal-in-part) is still a concern.  Meaningful appellate review is certainly a necessary right for all litigants who are not satisfied with the district court’s decision.  With a reversal rate so high, however, litigants are not encouraged to settle cases.  It is difficult for attorneys to advise clients because 3 of every 8 cases are reversed, at least in part, by the Federal Circuit.  It is only slightly more than irrelevant how the district court rules.  The case is still in serious doubt until the Federal Circuit issues its decision.


Senate Gridlocked on Judicial Nominations

October 25, 2010

Congress is again causing problems for the Federal Judiciary.  The crisis is a lack of judicial resources due to the fact that Congress refuses to confirm Federal judges.

We know that there are currently 3 vacancies on the 12 member Federal Circuit:  that’s 25% of the court’s membership.  The oldest vacancy was Judge Schall’s retirement to senior status last OctoberJudge O’Malley was nominated in March and finally passed the Judiciary Committee in September (unanimously).  Will she get a vote on the floor in a lame duck Senate session?  The other 2 vacancies are only about 4 and 5 months, respectively.  Edward DuMont was nominated in April.  He still hasn’t even gotten a hearing before the Judiciary Committee yet.

But the Federal Circuit is one court, right?  Things must be better on the other courts.  Let’s take a look.

DC Circuit

There are currently 2 vacancies on the DC Circuit out of its 11 judge membership.  Justice John Roberts’s former seat has been vacant since 2005 after Senate Democrats blocked President Bush’s nomination of Peter Keisler.  The other seat has been vacant since 2008.  This one can’t be completely blamed on the Senate, as President Obama just made his first nomination to this court at the end of September.

Second Circuit

The Second Circuit has a membership of 13 judges, but currently has 3 seats that have been vacant for over a year.  President Obama made nominations in February, March, and May, respectively to fill these seats. 

The February nominee was confirmed in June by the Judiciary Committee on an 11-7 party line vote, but the nomination was returned to President Obama without consideration by the entire Senate.  The president resubmitted the nomination last month.

The March nominee received approval from the Judiciary Committee in May.  He is still awaiting consideration by the entire Senate.  The May nominee had a hearing last month, but has yet to be voted on by the committee.

Fourth Circuit

Two of the 15 seats on the Fourth Circuit are currently vacant.  The oldest vacancy dates to 2007 after Democrats refused to even conduct a hearing on President Bush’s nominee.  The other seat has been vacant since July 2009.

The president’s November 2009 nominee to the oldest vacancy was unanimously approved by the Senate Judiciary Committee in January.  Yet, no vote by the full Senate has taken place in the 9 succeeding months.

Fifth Circuit

The Fifth Circuit has 2 vacant seats out of 17.  The oldest has been vacant since August 2009.  President Obama didn’t get around to a nomination until June.  The Judiciary Committee did conduct a hearing last month, but has not yet voted on the nomination.

Seventh Circuit

One of the 11 seats on the Seventh Circuit is vacant.  The vacancy occurred in January; President Obama nominated a replacement in July.  No action has been taken on the nominee in the last 3 months.

Ninth Circuit

The largest circuit with 29 seats, currently has (only) 4 vacancies.  One has been vacant since 2004(?), the others since January 2009 and February and June 2010, respectively.  No nomination has been made for the seat vacated in 2004, as Obama has instead made nominations for the next two longest vacancies in February and March of this year.  It appears that the 2004 seat may be designated as an Idaho seat for which a replacement has not been found(?).

The February nominee is a fairly controversial professor at the University of California Law School.  The Judiciary Committee has approved his nomination twice, largely along party lines, and the entire Senate sent the nomination back to the president once.  The most recent committee approval was in September.  Republicans have vowed to fight this nomination.

The March nominee was approved by the committee in August, with no full Senate action in the last 3 months.

Tenth Circuit

The Tenth Circuit 12 judgeships with 2 vacancies.  The oldest vacancy dates to August 2009, with the other being in June 2010.  President Obama has sent one nominee to the Senate in March.  The Judiciary Committee approved the nomination in June.  The entire Senate has not yet acted on the nomination.

Eleventh Circuit

The Eleventh Circuit has had one empty seat, out of 12, since August.  No nomination has been submitted to fill this seat.


In total, there are 179 authorized appellate court judgeships, with 20 of those being vacant.  President Obama has nominated 13 individuals to fill those seats.  The overall vacancy rate of 11% is not as bad as the 25% rate on the Federal Circuit.  And the Federal Circuit nominees do not appear to be controversial.

At the trial court level, things are worse.  In district courts, there are currently 104 vacancies out of 679 authorized judgeships, a vacancy rate of 15.3%.  President Obama has only submitted 47 nominations to fill the vacancies thus far, many of them very early in 2010.  Yet, the Senate has not acted on them.

As Congress continues to create more Federal causes of action and more cases that make their way to Federal Court, the Senate is embroiled in partisan squabbling to prevent even non-controversial nominees from getting confirmation votes.  The resulting backlogs in Federal courts mean that, in many cases, justice is substantially delayed.

How is this allowed to happen?  In general, because the media pays very little or no attention to judicial nominations outside of the Supreme Court.  Nominees to the High Court are not allowed to languish because of the potential media backlash. 

Yet, one asks why Senators do not use the media for other judicial nominees.  Under Senate rules, a single senator, sometimes anonymously, can request a secret hold on a nominee.  One does not understand what Judiciary Committee Chairman Patrick Leahy (D-VT) or Majority Leader Harry Reid (D-NV) gain from not vigorously advancing President Obama’s nominees in the Senate, especially given that they will probably have significantly fewer seats after next week’s election. 

If the fault lies on the other side of the aisle, such as with the committee’s Ranking Member Jeff Sessions (R-AL) or Minority Leader Mitch McConnell (R-KY), it would seem that Sen. Leahy or Sen. Reid could use the media to place pressure on their colleague’s in the minority to allow up-or-down votes.

In the meantime, the Federal Judiciary, including the Federal Circuit, operates at a substantial handicap.

End of FY2010 PTO Numbers

October 15, 2010

Earlier this week, Director Kappos referred to the PTO’s performance at the end of FY2010 in a blog post.  It’s time to refer back to the Data Visualization Center to see the results.  The numbers below are as of September, the end of FY2010.  This will be an update to the August results posted previously.

First Action Pendency – 25.7 Months

Incredibly, this number is down by half a month from August!  Being the end of the fiscal year, the examiners made great progress during September.  As of the end of FY2009, the Data Visualization Center reports that it was 25.8 months.  This is not a significant decrease for the year.

“Traditional” Total Pendency – 35.3 Months

This number is down by 0.1 months from August.  At the beginning of FY2010, it was 34.6 months, so this number has increased by 0.7 months for the year.

Application Pendency with RCEs – 42.6 Months

This number was 42.8 months in August, so it is going down.  At the beginning of FY2010, it was 41.1 months.  The increase in 1.5 months for the fiscal year is not good.

Applications Awaiting First Office Action – 708,535

The PTO didn’t make its goal of getting this number down to 700,000 by the end of FY2010, but it made a significant one month reduction in September from 728,055.  That’s nearly 20,000 applications or 2.7%.  That is great for a single month.  The numbers for the year aren’t quite as good.  FY2010 started with a backlog of 718,835.

Patent Application Allowance Rate – 45.6%, 61.1%

The first number counts RCE filings as abandonments, while the second number does not, but counts them as continuing prosecution.  These numbers are up from 41.3% and 57.4%, respectively, at the beginning of FY2010.  The rate has generally been increasing for the last couple of years.

Number of Patent Examiners – 6,129

The number of examiners was finally increased as the PTO began significant hiring during September from 6,038 in August.  For the year, the number was fairly steady, falling from 6,145 at the beginning of FY2010.


As noted in Director Kappos’ blog post, the PTO made significant progress during September and did pretty well overall during FY2010.  It faced significant challenges with the hiring freeze for new examiners, the lack of ability to pay overtime, and an increase in application filing of about 4%.  If the PTO can continue to hire and pay examiners, this trend could continue and the backlog could continue to shrink.

Let’s hope so.

Supreme Court to Hear Induced Infringement Case

October 12, 2010

This morning the Supreme Court granted certiorari in Global-Tech Appliances, Inc. v. SEB, S.A.

In February, the Federal Circuit affirmed a finding that the defendant induced infringement of a patent even though there was no evidence that the defendant had any knowledge of the patent.  Knowledge of the patent is generally an element of such a finding.  The court held that deliberate indifference to the whether a patent existed on a product that it had copied was sufficient to warrant the finding of infringement.

A number of bar associations and other groups filed amicus briefs supporting a petition that the entire Federal Circuit consider the case to clarify this area of the law that has been further confused by the Federal Circuit decision.  This petition was denied.

Now, it appears that the Suppreme Court has agreed to step in to rule on this area of the law.  The Court will hear the case during the current term with a decision expected by June 2011.

HT:  Hal Wegner

Should You Apply for a Patent?

October 12, 2010

Who Has Rights in the Invention?

If you have a new idea or invention, you may need to determine who else may have rights in the invention, such as a co-inventor or employer.  For example, as an employee, if you develop a new idea or invention, you may need to discuss it with your employer to determine how best to proceed.  In general, employees retain ownership of their inventions that they invent unless there is an agreement with the employer to assign the invention to the employer, or if the employee was hired to invent.  Even if the employee retains ownership of the invention, the employer may have certain “shop rights” in the invention that may permit the employer to practice the invention.

If technology is or may be important to a company, it is important to have an employment or other type of agreement in place to be certain that rights to any inventions created by your employees are assigned to the company.  Ideally, these agreements are signed upon engagement of employment.  They can, however, with certain restrictions, be used at other times during employment.  An attorney can help prepare such an agreement to make sure that rights would be properly transferred.  This can also create an “obligation of assignment” in the invention to avoid certain obviousness rejections during prosecution of the patent application.

If you determine that you, or you and a co-inventor, have rights in an invention, you may want to determine whether to apply for a patent.  Anyone who is a co-inventor of an invention claimed in a patent application has an undivided right of ownership in the invention.  Each co-inventor has the right to license, assign, sell, or transfer his or her rights in the invention, or any part of the rights, without permission of the other co-inventors.  This is another reason that agreements between co-inventors is so important.

Should You Apply for a Patent?

One approach that can be used to determine how to proceed, that is, to determine whether to apply for a patent, is as follows:

If you have a new idea or if you have ownership rights in a new idea, the first thing you may wish to do is to try to determine whether it would be best protected by a patent or by another type of intellectual property protection, such as whether to keep the idea a trade secret or whether the idea is one best protected by copyright.  If the idea is easily kept secret, it may be better to keep the idea as a trade secret.  Trade secrets may be protected for an indefinite period of time, as long as they remain secret and provide a competitive benefit.  Other factors in this decision include whether it will be difficult to obtain patent protection, or if it will be difficult to detect infringement of the invention.  Such cases may also weigh in favor of trade secret protection.

If you believe the idea would be best protected by a patent, you should document and record any evidence of inventive activities, as these could become important when prosecuting the patent application.

Next, you may want to determine whether your idea is sufficiently developed to pursue patent protection at this time.  While it is not necessary to have made a model or prototype to obtain a patent, a patent application must include sufficient description and drawings of the invention to permit someone skilled in the art to which the invention pertains to make and use the invention.  If you have not yet determined these details, the invention may not yet be ready for patent protection.

The next step that you may wish to take is to determine whether filing a patent application is warranted and develop a business plan.  Is there a market for the invention?  Will you be able to sell or license the invention, or manufacture the product?  Will it be easy to detect infringement?  Does the investment justify the cost?

Before proceeding further, you may want to do any Internet search to determine the closest products that might affect the novelty or obviousness of the invention and also to determine who might be competitors.  This can be done initially using a search engine and also on a website that includes patents, such as  This search may help determine whether applying for a patent is warranted.  Many patents have been issued for products that never made it to the marketplace.  You may have never seen anything like your new invention, but there may be a patent that describes it, which would preclude you from patenting the same invention.  This initial search does not substitute for a search performed by a professional search company, but it is a good start.

You should then bring any search results and a brief description, as well as any drawings or models to a meeting with a patent attorney.  You should also provide any information that may be a statutory bar and any evidence of inventive activities.  The attorney can help advise you further on whether to file a patent application and prepare one for you should you decide to do so.

Clearance Searches & Opinions

Once you’ve developed a new product or invention, another consideration is whether anybody else has a patent that covers the product or invention that they can enforce against you.  Before undertaking significant investment in filing a patent application or in bringing the product to market, it may be prudent to perform a patent clearance search, sometimes called a “freedom to operate” search.  Otherwise, it may be that you receive a cease and desist letter or are sued for infringement after these investments have already been made and you could be on the hook for infringement damages and/or be prevented from using your invention.  At the very least, you may have to defend an expensive patent infringement lawsuit.

A patent attorney can assist you by having a search performed for a third party’s patents that may pose a risk of infringement for your product or invention.  If there are patents that are close or that may pose a problem, the attorney can work with you to design around the patent or you may abandon the idea and try something else before making significant investment.

What should you do if you have received a letter from a third party that threatens you with a patent infringement suit or asks you to license a patent?  Again, the advice of a patent attorney is invaluable here.  Simply ignoring the letter could potentially lead to your having to pay triple damages to the patentee in an infringement suit and being faced with an injunction.  The patent attorney can help you to decide an appropriate response and potentially give you a non-infringement opinion or an opinion that the patent is invalid.  The opinion could be used as a defense to a charge of willful infringement that may require a payment of triple damages.

Performing a bit of due diligence and spending a bit of time and money performing some background research can be invaluable before undertaking the marketing of a product or filing a patent application.  Spending some money now, could save you from a big lawsuit or failure to obtain good patent protection, or any patent at all, later.

Although the cost of protecting the invention may seem high, it usually pales in comparison to the cost of an infringement suit or the initial investment in getting a new product or service to market.

PTO to Change Examination Quality Metrics

October 11, 2010

How does one determine whether the PTO has properly examined a particular patent or application?  One way is by independently determining whether the application was properly granted or rejected.  Was a proper search conducted?  Should the claims have been allowed?  Did the PTO miss certain prior art?  These determinations are generally made on a post hoc basis in a reexamination or invalidity challenge in litigation.  The PTO needs a way to determine patent examination quality at an earlier stage in the examination process.  It has been using a quality measure in recent years to determine an error rate.  Director Kappos realized that the PTO needed to update the metrics used to make this determination.

On Friday, the PTO announced new quality metrics for patent examination.  The new metrics, which went into effect in FY2011, were a joint effort between the PTO and the Patent Public Advisory Committee (PPAC) and culminate a long process of public comment and hearings.  The new metrics focus on seven distinct areas.

Final Disposition Compliance Rate

This metric was one of the PTO’s prior measures that has been modified.  The PTO will conduct a random audit of applications for which a notice of allowance or a final rejection has been mailed. 

The PTO will review the final disposition of the application using a clear error standard.  When a claim is allowed, a clear error means that there was an unreasonable failure to make a rejection for one or more reasons provided in the patent laws.  When a claim is finally rejected, a clear error means that the rejection is unreasonable.  This means that it is not enough that the examiner’s supervisory patent examiner (SPE) would not have followed the course of action undertaken by the examiner.  The examiner’s action must be unreasonable for a clear error to have occurred.

The review will include whether final rejections were proper or premature, whether the rejection was properly maintained over the applicant’s response, and whether the disposition could have been handled by an interview.  Sampling is conducted by the PTO’s Office of Patent Quality Assurance (OPQA).  OPQA has the power to rescind allowances and correction to final rejections.

In-Process Compliance Rate

A second metric used by the PTO has also been modified.  This review is similar to the final disposition review, but instead reviews applications that have not yet received a final disposition.  The review will generally occur after the first office action on the merits.  Again, the standard of review is for clear error.

The PTO is looking for instances where the error will result in unnecessary expenditure of resources by the applicant or the PTO to correct the error.  These would include a second non-final office action, reopening prosecution, or RCEs.

First Office Action on the Merits Search Review

A new metric added by the PTO is a review of the examiner’s initial search.  The PTO will randomly sample a number of applications where a first office action has been mailed.  Factors used in this review are whether prior art from another patent office was properly considered, whether the examiner carefully considered prior art submitted by the applicant, and whether the examiner’s search included the inventive concepts of the claims, the proper classifications were searched, and whether the search was properly recorded.  The search is measured against a list of factors that make up the PTO’s best practices to determine a score for the initial search.

Complete First Action on the Merits Review

Another new metric is a review of the complete first office action.  This review will be in much greater detail than the in-process application review.  The PTO believes that high quality first office actions can significantly reduce patent pendency.

The office action is measured against a list of factors that make up the PTO’s best practices to determine a score for the initial office action.  These factors include proactive use of interviews on the part of examiners, propriety of all rejections, and compliance with all laws, rules, the MPEP, and PTO practices for office actions.

Quality Index Report

The PTO will perform a statistical analysis of applications to determine whether there are trends indicative of quality concerns.  These include reopening of final rejections, multiple non-final office actions, filing of RCEs, late restriction requirements, and others.  The PTO believes these events are harmful to reducing patent pendency and seeks to determine the frequency and reasons for such events.  The PTO is also measuring office actions per disposal as a factor in this measurement.

External Quality Survey

The PTO conducts a quantitative analysis of results to surveys of patent applicants and practitioners regarding the patent application experience.  The surveys have been conducted regularly and request information regarding examination quality from the stakeholders.  Some surveys will address particular aspects of the examination process, such as examiner interviews.

Internal Quality Survey

Next, a survey will be conducted of PTO staff,  including examiners and SPEs, to determine whether they have particular concerns or see particular trends affecting patent quality.  The survey will request the examiners’ experience regarding the quality of claim drafting, including breadth, definiteness, and whether the claims capture the essence of the invention.

Overall Metric

The PTO will use this information to determine and report an overall quality metric at the end of each year and the progress toward patent examination quality goals. 

The attachment, linked above, provides greater detail as to the factors that will be included in each quality metric and samples of surveys the PTO will use.

This new examination quality initiative by the PTO is another huge step forward for the adminstration of Director Kappos.  He has worked much more closely with stakeholders in PPAC and with applicants and practitioners to develop these metrics than any previous administration.  Hopefully, these can result in the elimination of needless additional non-final office actions, late restrictions, and unnecessary RCEs, all of which slow down the examination process.  This will result in progress toward the overall goal of reducing patent pendency while maintaining or increasing patent quality.

Jimmie Reyna Nominated to Federal Circuit

October 1, 2010

President Obama has announced the nomination of Jimmie Reyna to the Federal Circuit to fill the seat of Judge Mayer who took senior status on June 30.

Mr. Reyna is a partner in the Washington, DC office of Williams Mullen where he is head of the firm’s international trade and customs practice group.  Mr. Reyna serves on the U.S. roster of dispute settlement panelists for trade disputes under Chapter 19 of the North American Free Trade Agreement (NAFTA), and the World Trade Organization (WTO) Dispute Settlement Mechanism for both trade in goods and trade in services. 

He is a former president of the National Hispanic Bar Association.  He graduated from the University of Rochester in 1975 and received a law degree from the University of New Mexico in 1978. 

He does not appear to have much, if any, experience in intellectual property or patent matters.  President Obama clearly nominated him for his expertise in international trade issues.

It is unknown if or when Mr. Reyna would be confirmed.  It will definitely not happen in the current Congress.  Judge Kathleen O’Malley was nominated in March to the vacancy created when Judge Schall took senior status.  She received a confirmation hearing in July, but has yet to receive a vote by the Judiciary Committee.  Edward DuMont was nominated in April to replace retiring Chief Judge Paul Michel.  He has yet to even get a hearing.

Meanwhile, the Federal Circuit operates with nine active judges.