Archive for June, 2011

Supreme Court to Hear More Patent Cases in October 2011 Term

June 29, 2011

The Supreme Court seems to be taking a greater interest in patent cases during the last decade or so.  During the 2009 term, the Court decided Bilski.  During the 2010 term, the Court decided Global-Tech where it ruled that willful blindness=knowledge for induced infringement, and i4i where it ruled that patent invalidity must be proved by clear and convincing evidence.  After a number of years of hearing and reversing the Federal Circuit on most cases, such as KSR and eBay, the Court affirmed the Federal Circuit on both major cases this term.

As it nears the end of the current term, the Supreme Court has agreed to review three more patent cases during its October 2011 Term.  First, the Court has granted cert. for the second time in Mayo Collaborative Services v. Prometheus Labs., Inc.  This is another patentable subject matter case directed to methods of calibrating drug dosages.  The Federal Circuit originally reversed the district court opinion finding the patent invalid as not directed to patentable subject matter in 2009.  After the Supreme Court’s decision in Bilski, the Court ordered the Federal Circuit to reconsider this case.  The Federal Circuit did so and again confirmed the patentability of the claims.  The Supreme Court has again agreed to hear the case, presumably because the Federal Circuit disregarded the District Court’s and Mayo’s extreme reliance on Justice Breyer’s dissent from the dismissal order in LabCorp.

Next, the Supreme Court agreed to review the Federal Circuit’s decision in Kappos v. Hyatt.  Once a patent applicant has received a final agency action from the Board of Patent Appeals and Interferences, the applicant has two means of challenging that final decision.  The applicant may appeal the decision to the Federal Circuit or the applicant may file a civil action against the PTO in district court in Washington, DC and challenge the decision through a trial.  In Hyatt, the Court will decide whether an applicant may present new evidence in a district court challenge of the PTO decision that was not presented to the PTO and whether the district court must give deference to the PTO’s prior factual findings in the case.  The en banc Federal Circuit had decided both issues in favor of the applicant and the PTO has requested consideration by the Supreme Court.

Finally, Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S is a case involving a particular aspect of the Hatch-Waxman Act as pertaining to pharmaceutical approval.  The Court will decide whether in a patent infringement suit, a generic pharmaceutical company may counterclaim that the brand pharmaceutical company has submitted an overbroad description of its patent claim scope to the FDA.  May this information be corrected as argued by the petitioner, or must it simply be deleted as the Federal Circuit ruled.

The Court will hear arguments in these cases during the fall or winter of 2011-12 and issue decisions by the end of the term in June 2012.

House Passes H.R. 1249

June 24, 2011

After two days of debate that included the issues of the constitutionality of the first-to-file regime and PTO funding provisions, the America Invents Act overwhelmingly passed the House of Representatives yesterday, 304-117.

Earlier in the day, the House had passed Judiciary Committee Chairman Lamar Smith’s (R-TX) Manager’s Amendment, 283-140.  The Manager’s Amendment stripped the original bill of the PTO’s fee-setting authority.  Although Chairman Smith argued that the newly worded fee provision requires PTO collections be placed in a specific fund that can only be used by the PTO, the fact is that the provision is very similar to the status quo.  The fees the PTO collects must still be appropriated by Congress.  House members promised not to steal any more funds from the PTO, but we all know how much congressional promises are worth.

Patent Docs has a recap of the voting on various proposed amendments to the bill.

Now, the House bill must be reconciled with the Senate bill before anything is sent to Pres. Obama for signature.  The leading proponent in the Senate for ending fee diversion, Sen. Tom Coburn (R-OK), issued a press release urging the House to reject the bill that lacks the provisions to end fee diversion.  He argued that without this safeguard, there is no reason to believe that the Appropriations Committee will not continue to steal funds from the PTO.

Meanwhile, the Aministration, through Director Kappos, issued a statement praising passage of the bill and encouraging expeditious final passage.  Director Kappos seems more confident in a promise from the Appropriations Committee than seems warranted given that that committee is responsible for the current mess that siphoned off close to $1 billion from the PTO over the last 20 years.

Will the Senate accept the removal of the fee diversion prohibition language?  What about the House’s broad prior use rights?  Let’s hope not.  The bill that passed the House is a far cry worse than the one that passed the Senate.

If Fee Diversion Continues, Kill the Bill

June 20, 2011

David Boundy is reporting on Patent Docs that House Republican leaders have reached an agreement to remove the provisions of H.R. 1249 that would prohibit Congress from stealing PTO funds.  If this is true, the bill must be defeated.

As noted previously, the America Invents Act has numerous problems such as prior user rights and the near removal of the grace period. 

The best part of the bill, the one that IP professionals have been fighting for for over a decade was the end of fee diversion, Congress’ continued theft of PTO user funds.  The PTO is completely funded by user fees; it does not operate with tax money.  Those fees should be set at a level that permits the PTO to conduct thorough and expeditious examination of all applications that are filed, as well as all reexamination and similar proceedings.  The PTO is also in serious need of replacing its ancient IT infrastructure.  Because patent examination takes more than one year, the PTO also needs the ability to budget for more than one year at a time.  In an era where Congress cannot even pass a budget for a single fiscal year, the PTO cannot operate in this manner.  It requires fee-setting and retaining autonomy.  Congress’ near $1 billion theft from the PTO over the years is a lot of what got us into the current mess at the PTO.  Simply permitting the PTO to be adequately funded, apart from other reforms, would go a long ways towards fixing any problems with the patent system.

Other Provisions

Section 18 of the bill 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.

OK, so what’s a “technological invention”?  The bill does not define that term, but instead leaves it to the PTO to “issue regulations for determining whether a patent is a technological invention.”  The Federal Circuit earlier ruled that the PTO does not have general substantive rule-making authority.  Does this section of the bill grant the PTO such authority, or would such rules be merely procedural in nature?

More troubling, however, is the question of whether the patent law going to turn into the tax code where each industry or lobby gets its own provisions and special procedures and defenses.

The word is that the bill could come to the floor of the House for a vote as soon as Wednesday.  It’s getting to be crunch time for patent reform.

Amendments to America Invents Act

June 14, 2011

The battle over Patent Reform continues.  Judiciary Committee Chairman Lamar Smith (R-TX) has introduced an amendment to H.R. 1249 that includes changes to a number of provisions.

Chairman Smith’s Amendment

First, in a bout of extreme modesty, he proposes to change the name of the bill yet again, to the “Leahy-Smith America Invents Act.” 

The amendment changes the wording of the prior commercial use defense.  The elements of the defense were previously covered here and are largely unchanged.  This defense rewards those who commercially use an invention for more than one year before the application of the patent, but otherwise keep the invention secret.  The amendments since the bill’s introduction have provided for exceptions to the defense for patents owned by universities or technology transfer organizations because they decried the defense most loudly.  The defense is also not available if the commercial use was abandoned prior to its assertion.  This is a terrible provision that seeks to reward not those who disclose their inventions to “promote the progress of science and the useful arts,” but those who conceal their inventions.

The amendment conforms the post-grant review timing provisions with the Senate version of the bill, reducing the time for filing a post-grant review petition from 1 year to 9 months after the patent issues.

The amendment now specifically defines universities or other institutions of higher learning as “micro entities” for fee purposes.

Interestingly, given the congressional opposition to the director’s fee-setting authority, the amendment increases the sunset provision from 6 years to 7 years for such authority.

The amendment adds a defense for activity that would otherwise infringe a patent that relates to genetic diagnostic testing, obviously directed toward the Myriad case.  If the district court got the case right, why would this defense be necessary?

The amendment includes a new section that “no patent may issue on a claim directed to or encompassing a human organism.”  Who knows what this section is intended to mean.  No patents can currently claim a human organism.  The amendment does indicate that this section does not affect the validity of any currently issued patents.

Other Proposed Amendments

Numerous other amendments have been proposed by various members of Congress. 

Reps. Baldwin (D-WI) and Sensenbrenner (R-WI) seek to remove the prior user rights defense.  Rep. Terry (R-NE) would require a study to be undertaken to determine that this defense would not harm the patent system prior to its taking effect.

Reps. Conyers (D-MI), Manzullo (R-IL), and Sensenbrenner (R-WI) seek to strike nearly the entire bill, except the PTO’s fee-setting provisions.

Reps. Conyers (D-MI) and Rohrabacher (R-CA) seek to preclude a change to first-to-file until at least one other major patent office adopts a one year grace period.  Rep. Sensenbrenner (R-WI) would simply seek to strike the provisions changing the US to first-to-file.  In a separately proposed amendment, Rep. Terry (R-NE) also seeks to strike this provision.

Rep. Lofgren (D-CA) seeks to fully restore the current one year grace period.

Rep. Manzullo (R-IL) seeks to eliminate the PTO’s fee-setting authority.

A number of other proposed amendments seek to implement preferences for minority or women-owned businesses in the patent system or to at least study and collect information on the number of minority or women inventors.

Other Information

Patent Docs reports that Chairman Smith and Sen. Tom Coburn (R-OK) have responded to the letter from Reps. Rogers (R-KY) and Ryan (R-WI) opposing the PTO’s ability to set fees and keep the fees it collects.  Patent Docs also reports that Reps. Conyers (D-MI), Kaptur (D-OH), Manzullo (R-IL), and Sensenbrenner (R-WI) have circulated a letter urging their fellow congressmen to vote no on the bill.


The bill had a ton of momentum when it resoundingly passed the Senate in March.  Happily, Congress has now slowed it down a bit and will hopefully seriously consider all of the implications of the bill.  Recently, a fair amount of opposition to the bill has arisen from those involved in venture capital, several from the media, and from within Congress itself.  Is it enough to significantly alter or kill the bill?  It still remains doubtful.  Most of the opposition and significant proposed amendments are from the same group of representatives.  They will need to rally significantly more opposition to achieve their ends.

I have generally withheld judgment on the bill because I do think that the patent system does need some improvements.  After further consideration, I think the bill presents too many problems and I would now oppose it.

I am in favor of permitting the PTO to set and keep its own fees.  If the provisions prohibiting fee diversion are removed, as advocated by some congressmen led by Reps. Rogers and Ryan, the bill should be defeated in its entirety.  IP professionals that practiced under previous administrations that were adverse to patent applicants have difficulty granting the Office so much power.  Director Kappos has entirely reversed this trend to the point that IP professionals and applicants can and should trust him to do the right thing.

But the theft of fee diversion must be ended immediately.  Estimates are that Congress has stolen close to $1 billion from the PTO in the last decade or so.  As a user-funded agency that gets no tax dollars, the PTO must be permitted to keep all of the fees that it collects.

But, the bill also has numerous problems.

  1. Prior user rights.  This is an awful provision that rewards users who keep their technology secret.  This is entirely at odds with the purpose of the patent system which is to promote the progress of science and useful arts.  Such progress is only promoted if inventors share their new innovations with the public so that other may build on it “by standing on the shoulders of giants.”  There is simply no reason for a blanket defense that promotes such secrecy.  If this defense is so great and so necessary, why the university exception?
  2. Near elimination of the grace period.  Although this provision may be fixed by amendment, it is hard to understand how or why this provision got as far as it did.  Under current law, patent applicants can use evidence of inventive activity to pre-date third party references and the inventor’s own public activity that occurred within a year of the application’s filing date. 
    Even under a first-to-file regime, inventors should be able to pre-date prior references that are used for obviousness rejections.  The current bill eliminates the grace period for all third party activity and for the inventor’s own activity of public use or sale.
    The way Congress has botched this provision of the bill shows how complicated § 102 of the current patent act is.  When one asks what the definition of “prior art” is, the answer is not always easy.  The answer is basically whatever § 102 says it is.  By completely changing the system, we disrupt the delicate balance created by the various subsections of § 102.  This will create uncertainty for a number of years until sorted out by the courts.
  3. Switch from first-to-invent to first-to-file.  Virtually, the only arguments in favor of this change are (1) second filers never win interferences anyway so why have them, and (2) harmonization.  This issue relates to issue 2 to some extent.  If interferences are not a big deal, why make the change?  The new derivation proceedings would seem to be quite difficult for a smaller party to win over a larger entity.  
    First-to-file will understandably create a rush to file new applications at the PTO.  Our patent system has strict requirements of written description and enablement of the invention.  Applicants who file later after trying to make sure their inventions are perfected and ready may be disadvantaged by waiting too long.  They may lose the race to file first.  Applicants who file early may find they don’t have enough support or details of the invention in the application to gain patent protection.  Thus, a patent attorney’s advice to potential clients would be to file early and often:  try to win the first to file race and try to file applications that meet the disclosure requirements.  Small inventors and start-ups who now barely have enough money to file one application will be at a severe disadvantage to larger companies with larger patent budgets.  This will be a significant change to our patent system.
    The US has been the most innovative country in the world and has arguably the best patent system.  Why are all calls for harmonization for us to harmonize our laws and not for others to harmonize with us?
  4. Failure to eliminate secret prior art from obviousness rejections.  While we’re on the topic of harmonization, it is worth noting that most of the world does not permit unpublished or secret prior art to be used for obviousness rejections, but only for novelty defeating purposes.  This is especially important when making a change for first-to-invent to first-to-file and virtually eliminating our current grace period for third party activities.  Why not harmonize with respect to this issue?

Thanks to Hal Wegner for bringing these amendments to my attention.

Supreme Court Affirms Clear and Convincing Standard

June 9, 2011

The Supreme Court affirmed the existing standard of proving patent invalidity by clear and convincing evidence.  Microsoft Corp. v. i4i L.P.

Initially, when the Court agreed to review this case, it was thought that they planned to continue efforts to erode patent protection.  Slowly, as the case has proceeded through the briefing stage and oral argument, the balance seemed to tip back.  The Solicitor’s support of i4i’s position was of particular importance.  It now seemed more uncertain what the outcome would be.  Perhaps the Court would affirm the current standard.

It is still a surprise, however, that today’s opinion of affirmance was unanimous.

The Opinion

Justice Sotomayor delivered the opinion of the Court which took a very straightforward approach to the case.  The case is simply one of statutory interpretation as to the meaning and intent of Congress in enacting 35 U.S.C. § 282. 

The Court relied heavily on Judge Rich’s opinion in American Hoist where he indicated that the intent of § 282 was merely to codify the existing common law presumption that the PTO did its job properly.  The challenger’s burden is to prove invalidity by clear evidence.  Judge Rich, being a principal drafter of the 1952 Patent Act, was determined to be authoritative in the matter.

The Court noted that § 282 indicates who has the burden of proving invalidity, it does not indicate a standard for so proving.  Since Congress didn’t explicitly state the standard, it was presumed to be codifying or acquiescing the existing standard.  To determine the standard as of enactment of the statute, the Court relied on Justice Cardozo’s opinion in RCA where he referred to a patent challenger’s “heavy burden” that must be greater than a “dubious preponderence.”  The Court must presume that Congress intended to incorporate this heavy burden into § 282.

The Court rejected Microsoft’s arguments that the heightened burden only related to oral testimony or proof of prior inventorship.  The Court also addressed Microsoft’s argument that, under the Federal Circuit’s interpretation, the first sentence of § 282 would render the second sentence superfluous.  The Court agreed with Microsoft on this issue, but could determine no construction that would avoid excess language.  Thus, the Court would rely on the common law standard.

Next, the Court addressed Microsoft’s proposed hybrid standard of proof that would require clear and convincing evidence for evidence previously considered by the examiner and a preponderence for new evidence that was not previously considered.  First, the Court noted that if this had been Congress’ intent with regard to § 282, it would have said so explicitly.  Contrary to Microsoft’s contention, no lower courts had applied the hybrid standard.  Even had they done so, that would not be relevant to the Supreme Court’s determination.  Finally, the Court recognized that patent examiners are not required to cite on the patent every reference they have considered.  This alone would render the hybrid approach impractical.

The Court did recognize that newly uncovered evidence may be granted more weight when determining whether invalidity has been proven by clear and convincing evidence.  In fact, the Court endorsed the position that the jury could be instructed as to the effect of the new evidence.  If it is disputed whether the evidence was previously considered, the jury can be instructed to consider the issue.

The Court briefly reviewed the various policy arguments raised in the numerous briefs in the case.  Many had argued that too many bad patents were being issued and that these patents were insulated from challenge by the heightened standard.  Others argued that the heightened standard is part of the patent bargain.  The Court declined to address these issues believing them to be for Congress and not the Court to consider.

Finally, the Court noted that Congress has modified § 282 many times since its enactment and even since the Federal Circuit began to consistently interpret the statute to require the clear and convincing standard of proof.  Never once has it considered an amendment that would change that standard.  Thus, Congress clearly intends to maintain the clear and convincing standard.

Other Opinions

Justice Breyer, joined by Justices Scalia and Alito, joined the Court’s opinion, but wrote separately to address the fact/law distinction raised in the AIPLA’s amicus brief.  Only facts need be proven by clear and convincing evidence.  The overall legal determination of invalidity does not require a clear and convincing standard.  He advocated using special interrogatories or special verdicts to separate the legal and factual issues for the jury.  This would also facilitate appellate review.

Finally, Justice Thomas wrote separately.  He was the only member not to join the Court’s opinion, but he did concur in the judgment.  He does not believe that Congress sought to codify any standard of proof in § 282.  He does believe, however, that the Supreme Court established the clear and convincing standard in the RCA case.  This case has not been overruled and controls the case.


This opinion shows that the Supreme Court can, at times, get patent cases right.  Reducing invalidity challenges to a preponderence of the evidence would have severely weakened issued patents.  Installing a new hybrid system of proof would have severely buried the PTO in prior art.  That result would have further exacerbated the problems with the application backlog and pendency.

Opposition to Patent Reform Bill from Congress

June 8, 2011

Most opposition to the America Invents Act, previously passed by the Senate and likely to come to a vote in the House in the coming weeks, has been from smaller companies and universities.  Now, however, some opposition is being raised by members of Congress themselves.


Reps. Dana Rohrabacher (R-CA) and Marcy Kaptur (D-OH) have raised the question whether the change from first-to-invent to first-to-file is constitutional.  They have even requested time to debate this issue on the House floor prior to a vote on the bill.  Their request has been joined by 50 other members of Congress.

While I don’t believe they have a strong argument, they base their position on the Patent and Copyright Clause of the Constitution.

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

They argue that the current system guarantees a patent to the first inventor (provided that the application meets the requirements for patentability).  By changing to a first-to-file system, someone other than the first inventor may be granted a patent, contrary to the Patent and Copyright Clause. 

The counter to this argument is that the change is actually a change to a first-inventor-to-file system.  Someone cannot simply file a patent application on someone else’s invention.  The new derivation proceedings are supposed to be a safe guard against this type of theft.  The only way to get a patent is to be an inventor.

But, what does that mean?  If you are not the first to conceive or reduce an invention to practice, are you actually an inventor?  If two individuals independently conceive of an invention, is the one who conceived second but filed first an inventor?  I guess these are the types of questions that Reps. Rohrabacher and Kaptur would like to debate.  IPWatchdog has a discussion of some of the issues here.

Fee-Setting Authority Would Make PTO Too Powerful

One of the top mandates of Patent Reform has been to keep Congress’ hands off PTO users’ money.  Theft of this money in the form of fee diversion has been an on-going problem for a number of years, stretching back through several administrations.  The America Invents Act seeks to end this practice by permitting the PTO to set its own fees and keep all of the money it collects.

Some members of Congress, however, won’t let go of the PTO cash cow without a fight.  Reps. Harold Rogers (R-KY) and Paul Ryan (R-WI) have sent a letter to Judiciary Committee Chairman Lamar Smith (R-TX).  Rep. Rogers is the Chairman of the House Committee on Appropriations and Rep. Ryan is the Chairman of the House Committee on the Budget.

We strongly oppose this proposed shift of billions in discretionary funding and fee collections to mandatory spending.  Putting PTO funding on auto-pilot is a move in exactly the wrong direction, given the new Republican majority’s commitment to restraining spending, improving accountability and transparency, and reducing the nation’s unparalleled deficits and debt. . . . It would be both irresponsible and unwise to allow the [USPTO] to operate solely under the authority of bureaucrats and White House political appointees — without being held accountable to the American public through their elected representatives in Congress.

They urge that the fee-setting provisions of the bill be deleted or modified before it comes to the floor for a vote.

Nowhere in their letter do they indicate how this provision would increase mandatory spending or increase the deficit or national debt.  Reading between the lines, one can only surmise that they are referring to the loss of the ability to steal PTO funds in the future.  The removal of this provision should doom the bill.

Is there enough opposition forming that the chances of passage are becoming slimmer?  It’s hard to say.  The more time that passes, however, the more opportunity the opposition has to organize.  We shall see in the coming weeks whether the votes remain for passage or whether the bill will die.

HT:  Patent Docs.

References in Obviousness Rejections Must Be Analogous Art

June 8, 2011

On Monday, the Federal Circuit reversed several PTO obviousness rejections in In re Klein.

Klein had invented a feeder for birds and butterflies that held sugar and water for preparation of nectar.  The feeder included separate compartments for the sugar and water and a divider that is removed to mix the sugar and water in precisely specified ratios based on the type of animal to be fed.  The ratios were already known; the claimed invention was directed to the particular device for mixing the sugar and water.

The Rejections

The patent examiner had issued 5 obviousness rejections that were affirmed by the PTO Board of Patent Appeals and Interferences.  The Board characterized the problem sought to be addressed by the invention as “making a nectar feeder with a movable divider to prepare different ratios of sugar and water for different animals.”

The rejections relied on the following references.  Roberts was directed to an “Apparatus for Keeping Accounts” that included receptacles designed to receive statement cards.  The receptacles included removable partitions.  O’Connor was directed to a tool tray having dividers that were easily removed.  Kirkman was directed to a plastic cabinet drawer with removable partitions.  The drawer is used to contain relatively small objects.

Next, Greenspan was directed to a blood plasma bottle having a compartment for dried plasma and a compartment for water.  During transport, a wall separates the plasma from the water.  When the plasma is to be used, the wall is removed permitting the plasma to mix with the water.  Shaking is required to dissolve the plasma in the water.

Finally, De Santo was directed to a fluid container having two compartments to hold two different types of fluid.  A valve between the two compartments permits the fluids to be mixed together without opening the container.

The Federal Circuit’s Holding

The Federal Circuit addressed Klein’s arguments relating to the references being “non-analogous art.”

A reference qualifies as prior art for an obviousness determination under § 103 only when it is analogous to the claimed invention. . . . Two separate tests define the scope of analogous prior art:  (1) whether the art is from the same field of endeavor, regardless of the problem addressed and, (2) if the reference is not within the field of the inventor’s endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved.

In this case, the Board relied on the second test in finding the references related to the same problem addressed by the Klein invention.

The Federal Circuit disagreed, holding that Roberts, O’Connor, and Kirkman relate to containers designed to separate their contents, as opposed to one designed to mix the contents.  Further, these references all related to separating solid objects; an inventor would not be motivated to consider such references when addressing the problem of mixing liquids, such as sugar and water.  Thus, the references are non-analogous art and do not qualify as prior art for obviousness purposes.

Next, the court likewise held that Greenspan and DeSanto are non-analogous art.  They do not address multiple ratios and do not have movable dividers.


This decision from the court is a refreshing counterbalance to the obviousness decisions issued after the Supreme Court’s KSR decision.  KSR made it significantly easier for patent examiners to issue obviousness rejections because they are no longer required to make specific findings from the references that would demonstrate a motivation to combine or alter the references in such a way as to arrive at the claimed invention. 

Since KSR, I have seen more and more rejections based on references that have little or nothing to do with the claimed invention.  As claims are amended to add additional features in the hopes of overcoming an obviousness rejection, some examiners will simply continue to add additional references that might show an individual element of the claim.  The new references often have nothing to do with the invention.  The examiner will simply argue that the new references were directed to the same problem as the claimed invention.

Klein should help tip the balance back toward equilibrium and give applicants an additional tool for overcoming obviousness rejections based on references from disparate fields.  In some ways, the issue to be addressed may now be the problem the invention seeks to solve.

Patent Prosecution Lessons

June 2, 2011

I recently spoke with another patent attorney who was asked to prosecute a patent application that was originally prepared and filed by the inventor.  The inventor wanted to keep costs down as she didn’t have a lot of  money when she filed the original application.  To prepare the application, she reviewed other patents to get the format down.  She is a smart professional, she can understand how to do this.  She knew the details of her invention well; after all, there’s a lot of do-it-yourself patent sites and books out there.

You might have heard this story before.  Nearly two years after filing her application, she received an office action from the PTO.  The office action included 8 separate drawing rejections, a reminder of the proper format for the specification that included 4 separate specification objections, and an objection to the abstract.  One claim was objected to for informalities and there were 7 separate claim rejections for indefiniteness.  Finally, there were 4 § 102(b) rejections and 3 obviousness rejections.

The attorney stated that it will take him at least triple the amount of time that it would normally take to respond to an office action, as he has to get new drawings, do a substitute specification, and substantially re-write the claims.  The inventive features were not clear to him from the specification; it was not until he spoke to the inventor in detail that he understood.

Will he be successful in obtaining a patent for the invention?  At this point, it is unclear.  He is stuck with the disclosure prepared and filed by the inventor because he can’t add new matter.  There may be important details or inventive features that were not adequately described.  The inventor may find herself out of luck.  In any event, once he files the amendment, the examiner may be able to fully comprehend the invention, but the next office action will be final.  The examiner will, correctly, note that any further search is required by the amendment.  Thus, to get further prosecution, an RCE will be required.

So, what’s the bottom line here?  The inventor was able to save the cost of having an attorney prepare and file the application at the start.  Perhaps she saved $5000-10,000.  The invention is moderately complex, so we’ll say she saved $7,500.  If the application proceeded as normal, the response to the office action would run about $2000-2500.  Prosecution is always a bit unpredictable, but hopefully, the claims would then be allowed.  Instead, the attorney says it will cost triple that amount to respond with new drawings, a substitute specification, and substantially re-written claims.  That means about $6000-7500.  Then, the case will require an RCE and another response plus the RCE filing fee.

And, there’s no certainty that she can even get a patent now.  Did she save money by preparing and filing the application herself?  It would appear not.  She will probably end up spending $8000-10,000 on prosecution costs, plus an RCE filing fee, to save about $7500 up front.  And, she may not get a patent at all.

The lesson here is that the patent system is complex.  The PTO and courts have imposed numerous rules and requirements that patent attorneys are experts in, but are not readily apparent to those who do not work with patents every day.  Patent attorneys can provide invaluable advice on the proper strategy and how to properly prepare the specification, drawings, and claims.  You never know if the invention will be a great commercial success, but if you don’t treat it as such up front, any patent received will be worth the price you paid for it.

Supreme Court: Willful Blindness = Knowledge

June 1, 2011

Yesterday, the Supreme Court affirmed the Federal Circuit’s decision in Global-Tech, Inc. v. SEB, S.A.  The Federal Circuit held that the infringer was liable for inducing infringement of a patent of which it had no direct knowledge based on its “deliberate indifference” of a known risk.  The infringer deliberately withheld information from its patent attorney when the attorney was performing a freedom-to-operate search.

The Supreme Court upheld the knowledge requirement for proving inducement under § 271(b) and held that “deliberate indifference to a known risk that a patent exists” is not sufficient to meet the knowledge requirement.  In its 8-1 decision, the Court affirmed the decision based on the theory of “willful blindness.”

The Court, with assistance from amici, took the concept of willful blindness from the criminal law context.  The doctrine of “willful blindness” includes two requirements:

(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact. 

Willful blindness is a higher standard than recklessness or negligence.  It is more than than knowledge of a substantial risk; it requires active efforts to avoid knowledge of the potentially infringing nature of the defendant’s activities.

Justice Kennedy, in dissent, argued that the Court should not expand § 271(b) to permit liability for willful blindness, but should require that actual knowledge of the patent by the infringer.