Archive for January, 2012

Patent Mass Aggregators

January 31, 2012

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

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

An Abstract of their article is below.  The complete article is available at:

The Giants Among Us

Tom Ewing & Robin Feldman

2012 Stanford Technology Law Journal 1


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

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

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

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


Supplemental Examination, Reexamination

January 26, 2012

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

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

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

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


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

Request for supplemental examination:  $5,180.

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

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

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

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

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

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

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

PTO Number Estimates

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

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


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

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

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

The Importance of Inventorship

January 23, 2012

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

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

Falana v. Kent State University

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

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

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

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

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

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

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

Track I Accelerated Examination

January 18, 2012

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

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

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

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

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

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

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

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

January 12, 2012

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

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


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


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

View the complete rules at  

More information:  flyer and rules.


PTO to Open Detroit Satellite Office by July

January 11, 2012

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

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

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

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

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

Patent Drawings

January 11, 2012

One of the reasons that I tell inventors that we need to begin preparing a patent application well in advance of the deadline is the need for properly prepared drawings.

For provisional applications, just about any drawings will do.  Like other aspects of provisionals, the better prepared the provisional, the better chance of being able to properly rely on the provisional filing date.  Thus, even for provisionals, proper drawings are important.

For non-provisional patent applications, drawings are not an afterthought.  There are a number of very specific PTO rules that must be followed in the drawings.  The drawings must show every feature of the invention specified in the claims.  This means that it is not enough to simply discuss the idea of the invention generally in the specification; the invention must be discussed and the drawings described in detail.

When preparing the specification of a patent application, it is important to provide different levels of specificity.  The invention should be described broadly and generally, but also with increasing levels of detail.  This provides support for claims of varying breadth.

The drawings include reference numerals that point to various parts or elements in the drawings.  These numerals are referred to in the specification to describe the invention, including how it is made and used.  In this way, the drawings are not cluttered with a lot of words that make them difficult to read and understand.

Inventors sometimes think they can save money by preparing their own formal drawings.  There are also a number of specific requirements relating to margins, font size, and lead lines used in the drawings.  The rules for PCT applications are even more specific.  In a typical case, patent draftmen who specialize in preparing patent drawings only charge a couple hundred dollars to prepare the drawings for an application.  When I work with inventors who want to do the drawings themselves, I often go through multiple iterations that require a great deal of my time to correct and explain as the inventor works to comply with the drawing rules.  In these cases, the time involved costs a great deal more than a couple hundred dollars.

Like most aspects of patent preparation and prosecution, a patent attorney can easily provide advice and guidance on the preparation of drawings for a patent application.

Proposed Rule for Third Party Prior Art Submissions

January 5, 2012

A change to US patent law that is being implemented as part of the America Invents Act is that third parties will soon be able to submit references to the PTO in pending applications.  The theory is that competitors and other interested parties have a keen understanding of the art and an incentive to submit the art to the PTO.  This should aid the examiner in issuing proper patents.  The rule will become effective to all applications pending on or after September 16, 2012.

The PTO has published a proposed rule to implement this statutory provision.

Third party submissions may be in the form of patents, published patent applications, or other printed publications.  Submissions must be made before the earlier of:  (1) mailing of a notice of allowance, or (2) the later of (a) 6 months from the date of publication of the application, or (b) the mailing of a first rejection of the application.  A concise statement of the relevance of each document must be included with the submission, as well as a fee. 

Lengthy documents do not need to be submitted in their entirety, but relevant portions themselves may be submitted.  The documents need not be prior art against the application, but if the date is not apparent from the document, the third party bears the burden of establishing that it is indeed prior art.  This burden may be met by accompanying declaration, affidavit, or other evidence to establish the document’s date.

The PTO will review the submission for compliance with the rule before entering it into the patent application file.  Non-compliant submissions would not be entitled to a refund, nor would the time for submission be tolled.  The third party is not required to serve the submission on the applicant (thereby not creating a requirement that the applicant duplicate the submission to the PTO), nor will the PTO notify the applicant of the submission.  It will be available in the electronic file of the application in PAIR.  The listing of submitted documents would also be sent to the applicant with the next office action with an indication of whether they were considered by the examiner.

The Notice reminds third parties to submit relevant prior art early in the prosecution and not to dump large numbers of documents on the examiner.  In such cases, the relevant documents may be obfuscated by the volume submitted.

The fee for submitting documents will be $180 for each 10 documents or fraction thereof submitted.  Interestingly, the rule includes an exemption of the fee for a first submission by a particular third party in an application where the submission is of 3 or fewer documents.  Similar fee-exempted submissions may be made by other third parties in the same application, provided the third parties are not in privity.

The PTO is accepting comments to the proposed rule until March 5, 2012.

RCE Filing to Get Prioritized Examination

January 3, 2012

Several weeks ago, the PTO announced an expansion of the procedures for prioritized examination.  Under the previous rule, Track I prioritized examination could only be requested for new applications or for applications that were re-filed as continuing applications.  Now, applicants may file Requests for Continued Examination to obtain Track I status, provided that the appropriate fees are paid and the application is limited to 30 claims and 4 independent claims.

The final rule states that the PTO has an office-wide aggregate goal of 12 months from granting of special status to final disposition.  As a reminder, a final disposition is (1) a notice of allowance, (2) a final rejection, (3) a notice of appeal, (4) filing of a subsequent RCE, (5) declaration of an interference, or (6) abandonment of the application.  Filing a petition for extension of time also ends the special status of the application.

The PTO is limited to 10,000 expedited applications per fiscal year.