Archive for September, 2012

Gene Patent Fight Continues

September 28, 2012

The ACLU filed another cert. petition where it asks the Supreme Court to overturn the Federal Circuit’s opinion that isolated human genes are patentable.  The questions presented in the petition include:

1. Are human genes patentable?

2. Did the court of appeals err in upholding a method claim by Myriad that is irreconcilable with this Court’s ruling in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012)?

3. Did the court of appeals err in adopting a new and inflexible rule, contrary to normal standing rules and this Court’s decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), that petitioners who have been indisputably deterred by Myriad’s “active enforcement” of its patent rights nonetheless lack standing to challenge those patents absent evidence that they have been personally threatened with an infringement action?

The first and third questions are the same ones that it presented in its December 2011 petition to the Supreme Court.  Question 3 is difficult to understand because the plaintiffs continue to win on this question despite not really have a single person or entity that does have standing.  Why continue to raise the question that it won but shouldn’t have?

The second question is new to this petition.  The Supreme Court issued a GVR order on this case in light of its Prometheus opinion and asked the Federal Circuit to reconsider the issues in light of Prometheus.  The Federal Circuit did so, but reached the same conclusion that the claims to isolated genes are patentable, claims to methods of screening cancer patients are patentable, and claims to methods of comparing and analyzing gene sequences to be ineligible.

We now await Myriad’s response.  The consensus seems to be that the Supreme Court will take this case again.  After Prometheus, it is completely unknown what the Court will do.


PPAC Report on PTO Fee Proposal

September 27, 2012

The Patent Public Advisory Committee (PPAC) has issued its report on the PTO’s fee proposal published earlier this month.

PPAC praises the PTO for seeking to reduce RCE filings by expanding after final practice and permitting consideration of prior art after payment of the issue fee.  PPAC is also positive about the proposed fee reduction for Track I accelerated examination and elimination of the large fee for late filing of a declaration.  Finally, PPAC approves of shifting the appeal fee from the time of filing the appeal brief to the time that the appeal actually moves to the Patent Trial and Appeal Board (PTAB).  This will eliminate the need to pay the fee if prosecution is reopened by the examiner after the brief is filed, which often happens.

PPAC is critical of the PTO’s other initiative to reduce RCE filings by significantly raising the fee for doing so, especially for second and following RCEs.  These fees are higher than fees for filing a continuation and will not reduce re-filings when they are needed.  PPAC also criticizes the extremely high fees for extra claims; there does not seem to be a need for such high fees as the extra work is not commensurate with the fee levels.

PPAC believes that the rules for contested applications, such as post-grant review, are too complicated and should provide a structured or automatic discovery mechanism.  The fees for supplemental examination and the limitations on the number of references that may be considered are too high for this procedure to be adequately utilized.  Similarly, PPAC argues that the fees for ex parte reexamination are way too high and not commensurate in scope with the work required by the PTO.

In general, PPAC believes that the fees proposed are too high.  Perhaps the PTO is trying to meet its 10 month first office action goal too quickly and should slow the process down to keep from having to increase fees so much at the outset.

Controlling Applicant Behavior

Many of the proposed fees seem to be the PTO using its authority to encourage or discourage certain applicant behavior.  PPAC believes this may be inappropriate because the PTO does not take all motivating factors for such behaviors into account.  For example, applicants may take certain actions in response to a court decision.  PPAC suggests that the PTO should also realize that fee levels will influence office personnel and examiner behavior as well.

The PTO needs to take price elasticity into account when setting fees.  Many or most entities that use PTO services have set budgets for doing so.  As the price increases, these entities will have to reduce their requests for such services.  For example, if the price is too high, the number of applications filed will decrease.

An example of this is that less than half of the PTO’s set ceiling of 10,000 Track I accelerated applications were filed during FY2011.  PPAC believes this is because the PTO set the price for this track too high.

PPAC believes that the significant initial application filing fee, and other fees such as maintenance fees, are being raised so high so quickly as to shock the patent system.  This may result in significant reduction in PTO revenue due to reduced usage by applicants.

In its report, PPAC also recognizes another problem with the AIA.  The PTO’s stated goal is to reduce first action pendency to 10 months and total pendency to 20 months by 2015-16.  Patent applications are only published, however, 18 months from their earliest filing date.  Thus, at a first office action after 10 months, there may be a great deal of prior art that is not yet known to the applicant or the PTO.  Perhaps the PTO will allow claims that it later must unallow due to later publication of invalidating prior art.  This will create additional inefficiencies for the PTO and applicants.


Specifically, PPAC argues that the RCEs are a source of frustration to by the PTO and patent applicants.  The PTO seems to place the blame for the increase in RCE filings solely on patent applicants, while PPAC rightfully notes that examiners bear a great deal of the blame. 

The PTO generally measures patent pendency by considering RCE filings as abandonments and new application filings.  Thus, if an RCE is filed, the PTO total pendency numbers go down.  A few years ago, the PTO changed RCE procedures to delay the time for their consideration.  The huge proposed increase in fees significantly aggravates applicants by increasing costs for reduction on service.

PPAC also notes that the recent PTO reduction in unexamined application backlog is nearly commensurate with the RCE backlog plus the appeal backlog.

PPAC is highly critical of the proposed RCE fee increases calling them punitive.

PPAC believes that applicants’ options after a final office action are limited to RCE or appeal.  Both of these fees are too high, especially given that applicants are not allowed to participate in pre-appeal brief conferences.  PPAC supports such participation because without it, these conferences are of little use and the proposed fees are simply too high for RCE or appeals.

Contested Cases

PPAC argues that the fees for contested cases–Inter partes review, post grant review, etc.–are way too high.  PPAC estimates that the costs for these cases, including attorneys’ fees, discovery, etc. will be $250,000 to $500,000.  The proposed fees seem to be much higher than the associated PTO costs.


PPAC’s conclusion is that the PTO did take some public comments into account between its February proposed fees and its September notice and made some reductions to those proposed.  Too many of the fees, however, appear to be attempts to regulate applicant behavior instead of simply to recover the PTO’s associated costs.  PPAC advises the PTO to reconsider some of these proposed fees.

Senate Approves Legislation to Implement Old Patent Treaties

September 25, 2012

Before Congress left Washington to spend full time in campaign mode, the Senate unanimously passed S.3486:  Patent Law Treaties Implementation Act of 2012.

The two treaties, the Hague Agreement Concerning International Registration of Industrial Designs and the Patent Law Treaty, were originally signed by President Bill Clinton and ratified by the Senate in 2007.  This bill and its sister bill in the House, H.R. 6432, are simply implementing legislation necessary for the treaties to take effect in the US.

The treaties generally concern design patents and would change the term and conditions for such patents.  The goal is to make it easier to file a single application for filing in multiple countries.

It is likely that the House will take up, and probably pass, the companion bill during a lame duck session after the election.  There is also speculation that Congress may attempt some technical amendments to last year’s America Invents Act during such as session as well.

IPWatchdog has provided a good summary of the bill.

The Importance of Patent Deadlines

September 19, 2012

Many new inventors and start-ups attempt to nagivate the patent system on their own to save money.  This is understandable to a certain extent because obtaining a strong patent portfolio is not a cheap endeavor.  Aside from problems with not being familiar with PTO practice and procedure or with Federal Circuit caselaw on how certain language used in patent applications and claims can affect patent strength (or the ability to obtain a patent at all), the most dangerous aspect of “going it alone” is the potential loss of patent rights due to missed deadlines.

Currently, under U.S. patent law, an inventor can publicly disclose his invention without losing patent rights, provided that he files a patent application within one year of that disclosure.  To a certain extent, this rule will be changing in a rather significant way as the America Invents Act goes into effect.

Problems can arise, however, when the inventors are advertising the new invention for sale, such as on a website, or even if they disclose the invention to potential investors.  A website publication is quite obviously public, but what about a disclosure to potential investors?  Provided that the investors are required to sign a non-disclosure agreement, this can be OK.  Many investors, however, won’t sign these agreements.  In this case, the inventors should disclose as little as possible regarding the invention.  If too much is disclosed, this could have a significant negative effect on patent rights.  Even if the complete invention is not disclosed, the amount of the disclosure may cause the invention to be adjudged obvious in light of other prior art.

One potential solution is to file a provisional application prior to disclosure to investors.  If the inventors don’t have the money for such a filing, this may not work either.

Foreign Patent Rights

Another problem arises when new inventors and start-ups begin patenting on their own without realizing that there are deadlines for foreign patent filings, or realizing the significance of not obtaining foreign patent protection.  Maybe they think they will file outside the US once they make a few sales of the invention and get more funding.  Or, they don’t consider foreign markets, focusing initially only on the US market.

Under the Paris Convention, a patent application that is filed within one year of the filing date of a first patent application is effective as if filed in that country on the filing date of the first application.  For example, if an applicant files first in the US and then files in Japan within 12 months of the US filing date, the Japanese application is effective as if filed in Japan on the same date as the US application.  This generally includes provisional applications as well.  If the first filed application is a provisional application, any applications filed within 12 months and claiming priority are effective as if filed on the date of the provisional application.

Conversely, if the one year deadline is missed, the application is treated by the foreign patent office as if filed on its actual filing date and not on the date of the earlier filing.  Thus, a “wait until we have money” or a “I didn’t think about foreign markets” approach can result in loss of rights.  One way to extend the time required to deal with these decisions is to use the Patent Cooperation Treaty.

The risk with waiting more than one year after the earliest application’s filing date to file in foreign countries is that most countries have an absolute novelty requirement.  Thus, any type of public disclosure, use, publication, or offer for sale destroys patent rights in those countries.  If an inventor files a US patent application, then discloses his invention to get more funding, and waits more than one year from the public disclosure to file for foreign patent protection, he will not be entitled to any foreign patent rights in absolute novelty countries.  Furthermore, even if the inventor doesn’t disclose his invention, the PTO publishes most patent applications 18 months after their earliest priority date, unless the inventor requests otherwise.  This also results in loss of foreign patent rights.

The bottom line is that patent deadlines that can result in loss of patent rights are another reason that inventors should work with a patent attorney who can guide them through the various deadlines and provide advice regarding US and foreign patent filings.  Saving a bit of money up front often results in the loss of patent rights in the end.

Inequitable Conduct Now Extremely Difficult to Prove

September 14, 2012

The “plague” of inequitable conduct being argued by every accused patent infringer may indeed be over.  After the Federal Circuit’s decision in Therasense, it seems that it will be extremely difficult to prove the defense.  The court showed that again yesterday in 1st Media, LLC v. Electronic Arts, Inc.

In 1st Media, the patent applicant received a PCT search report on an application that was identical to a pending US application that had been allowed by the examiner, but the Issue Fee had not yet been paid.  The search report included a prior art reference that was cited as “particularly relevant” to the application; it was not submitted in the US application. 

Similarly, the patent applicant had filed a second US application on the same day as the application for the patent-at-issue in the case (the ‘946 patent).  The second application was very similar to the ‘946 patent.  The claims of the second application were rejected over another prior art reference.  In response to the rejection, the applicant canceled the rejected claims and allowed the others to issue.  The prior art reference from the second application was also not submitted to the PTO with respect to the ‘946 patent.

Finally, the applicant filed a continuation-in-part (CIP) application of the second US application.  The claims of this application were also rejected over a third prior art reference.  The applicant amended the claims to distinguish this reference as well, which was also not submitted to the PTO with respect to the ‘946 patent.

Under the duty of disclosure, the patent applicant had to submit the new reference (and the search report) to the PTO, right?

During an infringement suit, the defendants defended on the basis that the ‘946 patent was unenforceable due to inequitable conduct, specifically arguing the failure to submit these references to the PTO.  The patent attorney and inventor testified that they did not think of submitting the references to the examiner and considered the inventions to be distinct enough that it was not required. 

Although the district court found this testimony not credible, there was no evidence of the specific intent of either to withhold the references.  The district court held that the inventor and patent attorney knew the references were material and did not provide a good explanation for not submitting them to the PTO.

The Federal Circuit, citing Therasense, reversed.  Inequitable conduct requires the “separate requirements” of (1) “the patentee acted with the specific intent to deceive the PTO”; and (2) the non-disclosed reference was but-for material.

To prove the first prong, the defendant must prove “that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it.”  (emphasis in original).  The court can no longer infer the specific intent to deceive merely because the applicant knew of the reference and knew that it was material.  The patent owner need not provide a good faith explanation of its conduct until the defendant has met its burden of proving the specific intent.

The defendants in 1st Media admitted that they had no direct evidence of an intent to deceive.  Instead, they argued (the pre-Therasense standard) that based on the circumstances, the patent owner must have intended to deceive the PTO (it can be inferred).  It is this fact that is fatal to the inequitable conduct defense in this case.

Ultimately, for all of the references, the evidence supports only that [the inventor and patent attorney] (1) knew of the references, (2) may have known they were material (which this court does not reach), and (3) did not inform the PTO of them. But that is not enough. As Therasense made clear, a defendant must prove that an applicant (1) “knew of the reference,” (2) “knew it was material,” and (3) “made a deliberate decision to withhold it.” . . . It is the last requirement that is missing from the record developed in this case.

Prior Art Searching

September 12, 2012

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.

PTO Proposes New Fee Schedule

September 5, 2012

Utilizing its new power to set its own fees, the PTO has proposed a new fee schedule for implementation in 2013:

The proposed schedule shows significant fee increases.  The current filing, search, examination fee for utility applications would increase from $1,250/625 (380+620+250) to $1,600/800 (280+600+720), a 28% increase. 

Excess independent claim fees will shoot up from $250/125 to $420/210 (68%).

Requests for Continued Examination increase from $930/465 to $1,200/600 for the first and $1,700/850 for subsequent requests.

Fees for appeals will increase dramatically.  The PTO proposes to eliminate the fee for filing an appeal brief, but replace it with a $2,000/1,000 fee for “Forwarding Appeal to Board.”  The total fee would increase from $1,240/620 to $3,000/1,500 (142%).

The PTO bases its fee propoals on the amount of time and work required by PTO personnel.  Explain the huge maintenance fee increases from $8,710/4,355 to $12,600/6,300 (45%).

The only fee the PTO proposes to reduce is the issue fee from $1,740/870 to $960/480 for utility patents.  The PTO has also proposed eliminating the current publication fee.

The proposal also includes a new $120 annual fee for registered patent attorneys and agents.

The details are available at the link above.  Additional analysis comparing the current with the proposed fees is available here.

Comments on the proposed fee schedule will be accepted through early November.

Constitutionality of First-to-File Challenged

September 4, 2012

Madstad Engineering and Mark Stadnyk have sued the U.S. Patent and Trademark Office alleging that the change of the US patent system from a first-to-invent to a first-to-file regime violates the US Constitution.  A copy of the complaint is available here.

The suit was filed in July in US District Court in Tampa, Florida, and alleges that the change violates the Constitution’s Intellectual Property Clause that awards “Inventors” the exclusive right to their discoveries.  Congress is not authorized to award patents to anyone but the true inventor.  The AIA deletes the requirement of the current Patent Act that prohibits an award of a patent to an inventor who did not actually invent the subject matter sought to be patented.

The AIA seeks to redefine the term “inventor” not as the person who makes the first discovery, but as the person who is officially designated as such by the PTO based on fulfilling procedural requirements of being the first to file a patent application at the PTO.

A second “inventor’ is an oxymoron; that person merely rediscovers that which was already discovered by the first inventor.

The complaint continues by arguing that the change is bad policy as it will discourage innovation because small inventors and start-ups lack the resources to compete with well-heeled large corporations in the race to the Patent Office.

Next, the complaint alleges the injury to the plaintiffs as added costs in implementing IT and other security features to prevent inventions and ideas from being stolen by others who would then file patent applications for them.  The plaintiffs will need to expend significant additional resources to expedite development of new inventions and early filing of patent applications for new inventions.

The plaintiffs request the court to enter a preliminary injunction to prevent the law from going into effect.

The plaintiffs are represented by prominent Washington constitutional law attorney Jonathan Massey.

Last week, the PTO filed a response to the initial complaint.  The PTO argued that the plaintiffs failed to show that they would sufferent irreparable and imminent harm, especially since the first-to-file procedures do not go into effect until March.  The plaintiffs have not provided details on lost opportunities or the harm that would result from the new system.  Congress has chosen this system as the best choice in its judgment.


While the AIA was pending in Congress, there were some questions of the constitutionality of this provision.  Some members of Congress requested time to debate the issue.  This was, of course, not done because proponents wanted to get the bill through Congress without proper debate and review.  Unfortunately, this is a common practice with modern legislation.

That being said, it appears highly unlikely that the plaintiffs will prevail in this case.  The courts, including especially the Supreme Court, have not clearly held that only the first person to conceive of an invention is the inventor.  There are some questions as to what the Constitution means by “Inventor.”  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?

The plaintiffs’ policy arguments will be unavailing.  There are many critics of the AIA, and especially of the first-to-file change.  The Constitution does not prevent Congress from enacting bad law; it only prevents Congress from enacting laws that are contrary to the provisions recited therein.