Archive for September, 2013

Patent News Update

September 27, 2013

There have been a number of patent-related news items making their rounds recently.

PTO to Stay Open in Event of Government Shut Down

Hal Wegner shared a memo from Acting PTO Director Teresa Rae to PTO employees that the agency will use its reserve funds to remain open for at least several weeks in the event of a government shut-down on Tuesday.

Dear Colleagues,

As you know, the Obama administration is working diligently with Congress to try to ensure that the federal government remains open and continues to do its work on behalf of the American people. However, I wanted to inform you that even in the event of a government shutdown on October 1, 2013, the United States Patent and Trademark Office will remain open, using prior year reserve fee collections to operate as usual for at least a few weeks. We continue to assess our fee collections compared to our operating requirements to determine how long we would be able to operate during a government shutdown; we will update you as more definitive information becomes available.

Because the USPTO maintains sufficient carryover funding from prior fiscal years, our agency can and will stay open for business for a period of time using these available reserves. During that time we will all continue to conduct our duties and serve our Nation, by processing the patent and trademark applications that drive our country’s innovative economy. Should we exhaust these reserve funds before the government shutdown comes to an end, USPTO would have to shut down at that time, although a very small staff would continue to work to accept new applications and maintain IT infrastructure, among other functions.

I realize you likely have many more questions. As new information becomes available, we will inform you promptly and thoroughly. Your respective business unit managers will also be reaching out to you to provide further clarification, as needed.

I thank you for your hard work, and the continuing dedication you demonstrate to the American people.

Sincerely,

Terry Rea

Congress Continues to Seek More Patent Reform

Patently-O has provided analysis and review of a patent reform bill discussion draft introduced by House Judiciary Chair Bob Goodlatte (R-VA).  The purpose of the bill, according to Rep. Goodlatte is to end “[a]busive patent litigation” specifically by “patent trolls.”

The bill would repeal the right of a civil action against the PTO to obtain a patent, substantially narrow the estoppel provisions of post-grant review, require the PTO to construe patent claims as a court would during post-grant and inter partes proceedings, codify obviousness-type double patenting, expand the scope of covered business methods for review, eliminate patent term extension after the filing of an RCE, and overturn the Supreme Court decision that patent malpractice suits belong in state court.

Other provisions in Rep. Goodlatte’s bill are similar to other bills seeking to reduce patent litigation abuse and patent troll tactics.  The bill would raise patent infringement pleading requirements, require the award of attorneys’ fees to prevailing parties (and against all interested parties), limit discovery prior to a court’s claim construction ruling, require companies asserting patents to disclose all interested parties, require courts to stay infringement suits against customers until suits against manufacturers are resolved, and protect creditor-licensees from foreign bankruptcies by IP owners.

Supreme Court Patent Cases

The Supreme Court’s October 2013 Term begins Monday, October 7.  The Court is scheduled to hear oral arguments in Medtronic v. Boston Scientific Corp. on November 5.  The question that Court will consider in that case is whether a declaratory judgment plaintiff has the burden to prove non-infringement against a patent owner.  The Federal Circuit ruled that the DJ plaintiff does bear the burden of proof.

The Court is considering or will consider petitions in a number of other patent cases as well.

Akamai v. Limelight.  The Court issued a CVSG order in this case in June where it asked for the views of the Solicitor General as to whether it should hear this case.  Akamai concerns multi-party infringement where more than one party completes all of the steps required in a patent claim.  The issues relate to both direct infringement and indirect infringement (inducement or contributory infringement).

Alice v. CLS Bank.  An en banc Federal Circuit could not garner a majority to determine whether the computer-related claims in this case were patent eligible subject matter.  A plurality of the court affirmed the district court’s holding that they were not.

WildTangent v. Ultramercial.  The Federal Circuit has twice held that the internet monetization claims in this case do constitute patent eligible subject matter.  The Supreme Court had earlier asked the Federal Circuit to reconsider its opinion in light of the Mayo v. Prometheus decision.

Senate Finally Confirms Todd Hughes

September 25, 2013

todd_hughes_judge_appeals_courtYesterday, the Senate confirmed Todd Hughes to a seat on the Federal Circuit by a vote of 98-0.  Hughes becomes the first openly gay federal appellate court judge.

The confirmation provides the court with its full allocation of 12 active judges for the first time since Judge Alvin Schall took senior status October 5, 2009.  Along with 6 judges on currently on senior status, the Federal Circuit is now the best equipped it has been in many years.

While Judge Hughes does not have extensive intellectual property experience, he has argued numerous cases at the Federal Circuit while serving as Deputy Director of the Commercial Litigation Branch of the Civil Division at the United States Department of Justice.  He has worked in the Justice Department since 1994 in the Commercial Litigation Branch.  He has extensive experience before the Court of Federal Claims, as well as the Federal Circuit and Court of International Trade.

Patenting Outside the US

September 19, 2013

A patent permits its owner to exclude others from making, using, selling, offering for sale, or importing the patented invention without his permission.  A patent is, however, unique to the country where it is granted.  Thus, if a patent owner does business in more than one country, it would be necessary to obtain a patent in each country to protect the invention.

Some countries have restrictions on what can be patented.  For example, some countries do not permit patenting software, business methods, drugs, or methods of treatment for humans.

PCT Applications

One way to obtain patent protection in multiple countries is to file an application under the Patent Cooperation Treaty (PCT).  A PCT application is an international application that is filed through the World Intellectual Property Office (WIPO), where an applicant can designate a large number of countries in which he desires to file his patent application.  Currently, 148 countries are members of the PCT.

A PCT application does not give the applicant an “international patent”, as all patents are national in nature (although certain organizations like the European Patent Office (EPO) issue a “European Patent” that must be registered in each member country where the applicant desires the patent to be in effect).  Instead, the PCT provides a mechanism that gives the applicant 30 or 31 months from the earliest filing date (the first filed patent application) to determine whether to file the patent application in various individual countries.  A PCT application can either be the first filed application for an invention or it must be filed within 12 months of the first filed application.

The PCT also provides an International Search Report and an examination, if desired, so that the applicant can get an early search performed to see if the invention is patentable.  The delay also permits the applicant to determine whether the invention is commercially valuable and whether it is worth spending the money to obtain a patent in each country.  While applicants may designate all 144 countries at the time of the PCT filing, they can decide later in which individual countries they would like to pursue patent protection.

A PCT application can also save money on translation costs early in the process.  While most individual countries require patent applications to be filed in the native language of that country, PCT applications permit applicants to delay the cost of translating the application into the various languages.

Once the 30 or 31 month period from the first filing date elapses, a PCT applicant must “enter the national stage” in each country where a patent is desired.  Otherwise, the application is abandoned and patent protection cannot be obtained.  It is at this stage where translations must be obtained and filing costs for the various countries must be paid.

Each country usually requires that the applicant work through an attorney or patent agent who is registered to practice before that country’s patent office.  Thus, to obtain a patent in Brazil, the applicant must work with a Brazilian patent attorney or agent.  These attorneys and agents charge fees for their services, further adding to the costs of obtaining patent protection in various countries.

If the PCT procedure is not utilized, applicants must file in each individual country within a year of the filing date of the first filed application.  The translation, filing, and agent costs are due at that time.  A primary advantage of the PCT is the 18 to 19 month delay for these costs.

While 146 countries are currently members of the PCT, there are several significant countries that are not members; these include Argentina, Paraguay, Uruguay, Venezuela, Taiwan, and the Middle East.  To obtain patents in these countries, a patent application must be filed in each within 12 months of the first filed application.

Patent Prosecution Highway

The United States PTO has entered into an agreement with 21 other patent offices called the Patent Prosecution Highway.  Under this program, once a patent claim is found to be allowable by the patent office where the application was first filed, the applicant may request that other patent offices fast track examination of the application.  This is a type of work-sharing program intended to cut reduce redundancy in examination.

Federal Circuit Fight Over Patentable Subject Matter Continues

September 10, 2013

Last week, a sharply divided panel of the Federal Circuit ruled that certain claims asserted by Accenture were invalid as not directed to patentable subject matter.  Accenture Global Services GmbH v. Guidewire Software, Inc.

Accenture had appealed a district court’s ruling that the claims of U.S. Patent No. 7,013,284 were invalid as not directed to patentable subject matter.  The district court had ruled that system claims 1-7 were invalid, as were method claims 8-22.  Accenture only appealed the ruling on the system claims, not the method claims.

The system claims were directed to computer programs for handling insurance related tasks.  The system claims include a combination of computer components including an insurance transaction database, a task library database, a client component, and a server component, which includes an event processor, a task engine, and a task assistant.

Majority Opinion

lourieJudge Lourie, joined by Judge Reyna, issued the majority opinion that the system claims were indeed invalid.  He relied extensively on the court’s plurality opinion in CLS Bank.  He argued that CLS Bank set forth a two step process for determining patent eligibility.  First, the court must determine whether the claimed invention falls within one of the statutory classes set forth in § 101.  Then, the court must determine whether the claim falls within one of the judicially-created exceptions, such as being an abstract idea.  Does the claim pose a risk of preempting an abstract idea?  Does the claim contain “additional substantive limitations . . . narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself”?

Next, Judge Lourie argued that the majority of the judges in CLS Bank had reasoned that when the system claims closely track the method claims and do not add additional meaningful limitations, they will rise and fall together.  He seemed to argue that because the method claims were not appealed–and the determination of their ineligibility is therefore conclusive–that Accenture is now estopped from arguing that the system claims are patent eligible.  He then proceeds to dismiss each of the limitations listed above that are not included in the method claims as “minor differences in terminology.”

Accenture also argued for reversal in light of the court’s upholding the claims in Ultramercial v. Hulu.  Interestingly, the panel in that case also included Judge Lourie and Chief Judge Rader.  The difference was that the third member was Judge O’Malley, instead of Judge Reyna.  How much of a difference does panel composition make to the outcome of these cases?  In any event, Judge Lourie distinguished Ultramercial based on the fact that in that case, there had not yet been claim construction or discovery.  The procedural posture of the case must make all the difference.

Dissent

Judge RaderNot surprisingly, Chief Judge Rader issued a vigorous dissent.  He argued against every point that Judge Lourie made.  Every claim can be stripped down to its core and characterized as an abstract idea.  CLS Bank was not a precedential decision, as it did not garner a majority of the court.  Therefore, the court cannot rely on it.

The failure of Accenture to appeal the method claims does not estop it from arguing that the system claims are patent eligible.  No precendent requires such a result.  Parties should be encouraged to narrow issues for appeal, not required to appeal every issue for fear of estoppel.

System and method claims do not necessarily stand or fall together.  They must be analyzed separately, as reaffirmed by Ultramercial.  A nearly unanimous court has rejected this procedure.

Finally, Judge Rader reviewed the claim limitations themselves and would find the claims to be patent eligible.  He notes that through these opinions the court has not provided any guidance on what is and what is not patent eligible subject matter.

Analysis

The patentable subject matter debate is getting ridiculous to the point that it is nearly impossible to advise clients as to what is and what is not patent eligible.  How do you tell your client that it depends on which judges comprise the panel when your case is appealed to the Federal Circuit?  Let’s knock off all the nonsense and use the other provisions of the statute to eliminate patents that are not novel, are obvious, or are abstract.

Myriad article

September 10, 2013

I recently published an article on Primerus Paradigm related to the Supreme Court’s Myriad opinion.

Patent Examiner Interviews

September 3, 2013

Oral communication is often more effective than written communication.

Once I’ve been through a round of written responses with a patent examiner, if I feel that the examiner is not being receptive to my position, I will conduct an interview with the examiner.  Often, the examiner will indicate that he or she had not fully grasped the position before and now better understands the distinctions between the claimed invention and the prior art.  Even in cases where I don’t get the examiner to agree with me, we usually understand each other’s position better which enables me to better advise my client on how to proceed with the case.

It is often easy for an examiner to cut-and-paste language from previous office actions when responding to an applicant’s amendment.  Sometimes this is because the examiner doesn’t fully appreciate the applicant’s position, sometimes this is because the applicant and examiner are talking past each other.  An interview can often resolve these issues as the examiner must listen and consider the applicant’s position without resorting to cut-and-paste.

This isn’t to say that all interviews are successful.  Many examiners are not used to oral communication and will be non-committal.  This is especially true for junior examiners.  Junior examiners do not have authority to allow claims without review by a senior examiner or supervisor.  Thus, examiner interviews with junior examiners require a senior examiner with such authority to also be present.  The problem is that the senior examiner has his or her own docket and often is not familiar with the application and issues or is not prepared for the interview.  Such interviews can be frustrating and maybe even unhelpful.  And, many junior examiners are very reluctant to allow patents.

In any event, even if the interview does not result in allowance of the claims, I have more information about the application and the examiner’s position than I did prior to the interview.  I can advise my client that the examiner will not be persuaded.  Perhaps we are more likely to get a positive result through appeal rather than another round of responses.

Interviews are not a way to avoid making comments on the record that become part of the prosecution file.  If there is an outstanding office action, most examiners will require the applicant to send in a proposed amendment or set of arguments that will become a part of the record.  This can sometimes be avoided if the interview is conducted after a response has been filed.  After the interview, a written summary is prepared by both the examiner and the applicant that becomes part of the file.

Nonetheless, if I determine during an interview that a particular argument is clearly not going to persuade the examiner, and I don’t think the argument is vital to the case, I may omit it from my next response, thereby keeping it out of the record.