Patent Law Blog (Patently-O)

Design Patents: No longer the Province of Individual Inventors

Thirty years ago, most design patent applications were filed by individual inventors. The graphs below show how that statistic has changed over the years. Notably, almost eighty percent of today’s issued patents are associated with some assignee by the time of issuance.  Litigation rates are comparable as well. According to my data from 2600 litigated design patents stretching back about a decade, 66% of litigated patents are associated with an assignee at the time of issuance.

This change could be partially explained by some new ease of filing assignments or registering a corporate form. However, I see two other major factors driving the split. First, the PTO & FTC crack-down on any attorney associated with an invention promotion company means that the patent attorneys who have historically filed the most design patents on behalf of individual inventors are no longer available. Most importantly, however, is the relatively small set of corporations who have figured out how to successfully use design patents.

Computer Based Patent Bar Exam Statistics

In order to become a US Patent Attorney or Patent Agent, an otherwise qualified individual must pass the PTO’s registration examination — often termed the patent bar exam. Since July 2004, the examination has been offered on computer in centers throughout the country. The computer-based examination continues the tradition of a fairly low passage rate:

• 2,113 individuals took the exam between July 2004 and June 2005. Of those, 56.4% passed the exam.
• 4165 individuals took the exam between June 2005 and October 2006. Of those, 58.2% passed the exam.

Since 2000, the paper based exam passage rate has ranged from a low of 37% to a high of 70%. 

• USPTO Office of Enrollment and Discipline

Design Patents: Controlling Pendency

Over the past decade, the PTO has taken control of pendency problems in the design patent area. In the early 1990’s design patents averaged over 30 months in prosecution. By 2001, that average pendency had fallen to less than 15 months.

The low pendency can allow design patents to serve as a preliminary substitute for future trade dress protection.  A design patent application offers immediate ‘patent pending’ status and would, in all likelihood, issue before the product would garner the secondary meaning sufficient for trade dress protection.  This is the approach taken by Apple with its iPod design patent applications. One of its issued iPod design patents (US D549,237 filed Aug 24 2005) appears identical to the company’s trademark design application (Serial No. 78925932 filed July 2006). The trademark case is still pending because Apple must make the required showing of secondary meaning.

The major problem with this ‘patent then trademark’ approach is the narrow scope generally offered by design patents during litigation. This may change as the Federal Circuit is set to reconsider its design patent infringement jurisprudence in the upcoming Egyptian Goddess en banc case.

There are major differences between the design patent examining corps and the utility patent examining corps — most notably, design patent examiners appear to stay-put. The 49 primary examiners associated with patents issued on December 4, 2007, have, on average, examined 3200+ design patents as primary examiners over an average of 12.5 years. (Medians of 3047 and 11.5 years respectively). Approximately 2/3 of design patents are prosecuted by one of the primary examiners without any assistance from an assistant examiner. For the same patents, assistant examiners have an average history of 400 examined design patents over a period of two years. (Median of 200 and 18 months respectively).

 * The graph above is based on a recently compiled dataset of the entire set of 300,000+ design patents issued between December, 1976 and December, 2007.

Counting Design Patents

In 2007, Samsung Electronics received over 550 design patents — the most ever issued to a single company in one year.  Sony holds the most design patents, and is followed closely by Nike. The following table shows the company awarded the most design patents each year:

Louis Zarfas is the primary examiner associated with the most issued design patents. Mr. Zarfas has allowed over 16,000 design patents since his first (as a primary) in 1978. Over 1,000 of those design patents relate to shoe designs claimed by companies such as Nike, Reebok, AVIA, Asics, LA Gear, Rockport, Sketchers, Wolverine, Keds, Louis Vuitton, Timberland, Berluti, and Kangaroos.

Recently issued design patents (issued 2000–2007) were, on average, pending for 16.2 months. Companies with at least 100 design patents during that period had about one month less pendency than those with fewer patents. Nike has prosecution down to a science — and averages less than 9 months pendency (filing to issuance). Toward the other end of the pendency chart, Apple averages over 21 months.

During the 2000–2007 period, approximately 75% of examinations were handled by primary examiners without any assistance from an assistant examiner. As with utility patents, the pendency for cases without an assistant is significantly less than for those with an assistant. Here, the difference is about two months.

 * These numbers are based on a recently compiled dataset of 300,000+ design patents issued since 1976 on file with DDC.

Rising Claim Counts

The chart shows the average number of total claims and independent claims for each year of issuance. The sample is drawn from 28,000 randomly selected patents that issued from 1977 and 2005. (For those who want data, the following table shows the average claim numbers by filing date.)

Does Size Matter? Counting Words in Patent Specifications

The following chart does not tell us whether the size of the patent document makes any difference. It only tells us that the average patent has grown considerably over the past twenty years.

To create the chart, I obtained a sample of 10,000 patents issued between January 1977 and December 2007 and counted the number of words in the description of the claimed invention. This excludes claims, title, abstract, references, and other identifying information.  To amplify the results, I added two trend-lines. The first trend-line runs from 1977 to 1987 and has essentially no slope — indicating that description size remained steady over those years. The second trend-line runs from 1987 – 2007 and has a clearly positive trend-line indicating that the number of words is increasing over time.

When is an Electronic Document a Printed Publication for Prior Art Purposes?

Wynn W. Coggins — the PTO’s Chief Examiner of eCommerce patent applications — recently published a useful article about how her art unit deals with electronic prior art. The following are some highlights.

Internal documents:

Internal documents intended to be confidential are not "printed publications" and are unavailable for use as prior art. This is regardless of how many copies are distributed. Additionally, note that "[w]hile distribution to government agencies and personnel alone may not constitute publication...distribution to commercial companies without restriction on use clearly does." Garrett v. US., 422 F.2d 874 (Ct. Cl. 1970).

Electronic Publications:

An electronic publication, including an on-line database or Internet publication, is considered to be a "printed publication" within the meaning of 35 U.S.C. § 102(a) and (b) provided the publication was accessible to persons concerned with the art to which the document relates. Thus, "whether information is printed, handwritten, or on microfilm or magnetic disk or tape, etc., the individual who wishes to characterize the information as a printed publication...should produce sufficient evidence of its dissemination or that it has been otherwise available and accessible to persons concerned with the art to which the document relates..." Wyer, 655 F.2d 227, Amazon.com v. Barnesandnoble.com, 73 F. Supp. 2d 1228 (W.D. Wash. 1999).

Web Pages Must Be Static:

Prior art disclosures on the Internet or in an on-line database are considered to be publicly available as of the date the item was publicly posted. This is provided that the item is dated and not temporal, and can be indexed for subsequent retrieval. An example of a temporal item is a web broadcast that cannot be saved, retrieved or printed, e.g., a live simulcast feed that is not archived, and a "streaming" audio or video that "flashes" across the screen.

Read the Article. (Via Michael White)

Continued Vitiation of The Doctrine of Equivalents

Wleklinski (dba Comfort Strapp) v. Targus (Fed. Cir. 2007) (Non-Precedential).

In March, 2007, the Central District of California dismissed Comfort Strapp’s complaint on summary judgment — finding no proof of infringement.  Comfort Strapp’s patent relates to a comfortable shoulder strap for luggage.

The fight was over the construction of an “auxiliary strap means” limitation that requires the strap’s end sections be “made of a relatively non-stretchable material” and the strap’s center section be “made of [stretchable] material.”  Because the Targus auxiliary strap was made of a single material, the CAFC agreed that it could not literally infringe.

Doctrine of Equivalents: Accused products that exhibit only ‘insubstantial differences’ from the claimed patent may also be considered infringing under the doctrine of equivalents. (DOE). However, the DOE cannot apply where it would vitiate a claim limitation.

Here, the Federal Circuit panel agreed that as a matter of law, the doctrine of equivalents does not allow a claimed two-material strap to encompass a strap made of only one material. According to the appellate panel, such a reading would be “the fundamental opposite of the claimed invention.” Citing Freedman Seating.

Notes: Although the court’s trend to limit the doctrine of equivalents began well before the Supreme Court’s KSR ruling. The bulked-up nonobviousness test naturally reduces the scope of the doctrine of equivalents as the DOE cannot extend to cover variations that would have been obvious at the time of patenting.

MercExchange v. eBay: Injunction Denied Again

MercExchange v. eBay (E.D.Va. 2007)

In July, 2007, the Virginia district court denied MercExchange’s motion for a permanent injunction against eBay. That order is now on appeal to the CAFC and may well establish the future guidelines for injunctive relief in patent cases.

In 2006, the Supreme Court heard MercExchange’s initial injunctive relief appeal in that case, the Court found that the Federal Circuit was wrong to always favor injunctive relief and that the District Court had been incurred to deny injunctive relief based on categorization of MercExchange as a non-practicing entity.  Rather, the high court held that injunctive relief decisions must be based on an individualized analysis of the traditional factors governing equitable relief. As stated by the Supreme Court:

“[a] plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837 (2006)

On remand, the district court again denied equitable relief to MercExchange – finding that the plaintiff did not adequately prove the four factors.

Presumption of Irreparable Harm: The MercExchange district court read the above quoted language to block any presumption of irreparable injury based on a judgment of patent infringement. Of course, that is not the only reading of the eBay decision.  Another consistent opinion would find that a plaintiff may demonstrate irreparable injury by proving ongoing patent infringement. 

Here, the court found that MercExchange would not be irreparably harmed by ongoing infringement because MercExchange is not in the process of developing its invention, it focuses its licensing regime on companies that independently developed the invention, it offered a license to the defendant, its only employees are patent attorneys, it failed to request a preliminary injunction, its patent is a business method patent which are of ‘suspect validity,’ and the ongoing reexamination coupled with the new KSR  precedent puts the validity of the MercExchange patent in doubt. According to the court, eBay’s market dominance weighs in MercExchange’s favor, but is insufficient.

Willful Infringement:: A consideration of willful infringement does not fit cleanly into any of the four eBay factors as stated. However, the maxim of unclean hands is a longstanding principle of equitable relief and thus must be considered.

“Frankly, it appears to the court that neither side has particularly clean hands as both have engaged in litigation tactics that at times may have crossed the line; however, neither side has successful proven the other to be unworthy of a ruling in equity due to unclean hands.”

Here, the district court disregarded the jury’s willfulness finding because it was a “close call” and enhanced damages are sufficient to punish such behavior

Public Interest Favors No Injunction:

“eBay is a multibillion dollar corporation whose online marketplace brings together tens of millions of buyers and sellers around the world and eBay unquestionably has a substantial impact on the United States’ economy; furthermore, eBay’s success pre-dates its infringement. In contrast, MercExchange is a company with two employees that work out of their homes and appear to specialize in litigation and obtaining royalties for licenses based on the threat of litigation. Although the public plainly benefits from a strong patent system and protection from an infringer may be vital when a patent held by a small patent holder is infringed upon by a multi-billion dollar corporation such as eBay, the strongest arguments in equity exist when such small patent holder utilizes its patent to benefit the public; that is, either seeks to develop the patent on its own or develop the patent through licensing agreements. Similarly, equity may favor a patent holder that seeks to defend its right to exclude and prevent development of its patent by others.”

Injunction denied. The appeal is expected to be heard in early Spring 2008.

Notes:

• District Court Decision Denying Injunctive Relief
• MercExchange's Appeal Brief on Issue of Injunctive Relief
• EBay's Appeal Brief on Issue of Injunctive Relief
• Last week, Judge Friedman affirmed a $30 million verdict for MercExchange. EBay’s stock quickly rose on the news. [Link] EBay is appealing the final judgment — and is expected to argue that the patent is invalid under KSR v. Teleflex.  

 

Appeals from the ITC

19 USC 1337 (Section 337) authorizes the International Trade Commission (ITC) to investigate complaints filed by owners of US patents against allegedly infringing imports. The ITC is run by a panel of six commissioners each serving a nine-year term.

One of the benefits of filing suit in the ITC is speed. Another benefit is its en rem jurisdiction used to block imports regardless of the location of the maker of the infringing product.  Similarly, the ITC can issue broad exclusion orders against an entire product line even if some of the importers were not parties to the litigation. Finally, 271(g) is not a defense to patent infringement in ITC cases.

That said, the number of ITC cases filed each year is relatively small compared with the number of federal district cases. In 2007, for instance, 33 ITC investigations were initiated under Section 337. This number has been on the rise over the past decade.

ITC appeals to the CAFC have also been on the rise. The table below shows both the number of ITC appeals and the number of parties appealing (a single ITC action may investigate multiple accused infringers).

Notes:

• OSRAM v. ITC
• USITC Section 337

Technologies most affected by the new IDS rule changes

The proposed IDS rule changes is expected to reduce the number of references submitted to the patent office with each patent application. Although not yet public, the rules are expected to include, inter alia, a 20 reference barrier. If more than 20 references are submitted, they must be accompanied with an extensive explanation. [More details] The patent office can point to several patents as examples of why, in its view, a rule is needed. Ronald A. Katz’s Patent No. 6,678,360 is a prime example. That patent cites over 1,500 references. 

Using a group of 80,000 patents issued in 2006, I looked at how the rules might impact the various art units and the PTO as a whole.

From my sample, 25.1% of issued patents list more than 20 references. Patents listing more than 20 references have an average of 28 references.  Some of these references may be cited by the PTO — However, the vast majority of references in patents citing 20+ are cited by the applicant.  Running the numbers — this means that the PTO could review 720,000 fewer references next year. (Assuming that the new rules eliminated 8 reference from each application citing 20+ references and that the PTO again examined 360,000+ applications). 

The rules will almost certainly have a disparate impact on various art units within the PTO because some art units typically receive more cited references than others. Semiconductor patents, for instance, rarely have 20+ references, while most molecular biology patents cite 20+ references.  There is also some correlation with the number of references cited and the expected examination delay within the PTO. The following table provides more detail.

Art Unit Description	Art Unit (Mod)	Expected Delay to OA (Months)	Count of Pats in Sample	Percent of Patents with >20 Refs	Avg +20 Refs	Average Number of Refs
Semiconductor, electrical, optical	2890	20.4	36	8.3%	2.4	11.9
Machine elements and power	3680	24	1389	14.8%	2.4	13.6
Semiconductors and electrical circuits	2810	19.2	6878	14.8%	4.2	13.9
Miscellaneous computer applications	2190	35.9	65	20.0%	2.3	14.3
Power generation and distribution	2830	19.4	5488	15.3%	4.4	14.8
Computer architecture	2110	26.6	351	18.8%	3.9	15.6
Computerized vehicle controls	3660	20.4	1421	21.6%	4.4	16.0
Liquid crystals, optical elements	2870	19.1	5505	18.7%	5.6	16.3
Thermal and combustion technology	3740	19.6	5016	18.8%	4.7	16.3
Material and article handling	3650	22.2	1548	20.2%	4.4	16.6
Computer architecture	2180	26.9	1659	17.4%	6.1	16.9
Fluid handling and dispensing	3750	22	2167	19.5%	5.3	17.0
Plants	1660	16.8	19	26.3%	3.9	17.2
Surface transportation	3610	19.9	2543	24.8%	4.1	17.2
Semiconductors and electrical circuits	2820	19.7	4853	20.4%	7.2	18.0
Chemical products and processes	1750	23.1	3000	26.2%	6.1	18.3
Miscellaneous computer applications	2120	28.5	1146	24.2%	6.2	18.6
Packages and containers	3720	20	4169	23.4%	6.0	18.6
Aeronautics, agriculture, fishing	3640	17.8	1279	26.7%	5.4	18.9
Static structures, supports	3630	22.8	2110	24.5%	5.6	19.0
Food technology, petroleum processing	1760	28.9	2229	27.2%	7.0	19.6
Metallurgy, electrochemistry	1740	30.2	2752	25.0%	7.7	19.8
Cryptography, security	2130	36.4	790	21.9%	8.1	19.8
Amusement and education devices	3710	23.5	1237	27.1%	7.1	20.1
Stock materials	1770	22.2	1940	27.9%	7.9	20.5
Graphical user interface, data bases	2160	35	258	29.1%	7.0	20.6
Fluid separation and agitation,	1720	21.9	2220	30.5%	7.3	20.7
Glass and paper making, tobacco	1730	16	1630	27.1%	8.2	21.0
Synthetic resins	1710	23.5	2740	30.0%	8.8	21.8
Electronic commerce	3620	45.4	835	31.0%	9.3	23.1
Wells, earth boring/moving/working	3670	19.2	2447	29.1%	9.4	23.3
Organic chemistry	1620	24.1	3146	33.1%	11.5	24.1
Body treatment, kinestherapy	3760	24.8	2211	31.7%	12.6	25.7
Computer networks	2140	40	186	41.9%	13.5	27.8
Organic compounds	1610	29.9	1761	41.0%	16.8	30.4
Fermentation, microbiology,	1650	22.8	1292	43.3%	19.1	32.9
Medical instruments, diagnostic	3730	28.5	2550	40.9%	21.6	35.7
Immunology	1640	27.5	1294	56.3%	25.9	41.5
Molecular biology, bioinformatics	1630	25.9	1383	54.8%	29.3	44.2
Totals			83543	25.1%	8.0	20.1

Summer Associate: Diversity in Patent Law Fellowship

The Chicago based firm of McAndrews, Held & Malloy recently announced the “McAndrews Diversity in Patent Law Fellowship.”  The law firm will award a $5,000 fellowship and a paid summer clerkship position to a qualified first-year law student of a diverse background who is committed to pursuing a career in patent law.  The $5,000 fellowship for law school tuition and expenses will be awarded on or about Sept. 1, 2008, upon completion of the 10- to 12-week summer clerkship at the Chicago-based firm.  The Diversity Fellow also will have the opportunity to receive an offer to return for a second summer.  The fellowship was created to further the firm’s goal of promoting diversity in intellectual property law. 

To be eligible for the fellowship, an applicant must be a first-year law student at an ABA-accredited law school, have a diverse background that, in the firm’s view, would help to improve diversity in the field of intellectual property law, possess a degree in science or engineering, and intend to practice patent law in Chicago.  Applications are being accepted through Jan. 7, 2008.  In-person interviews with finalists are being conducted on a rolling basis through Jan. 27, 2008.  Any fellowship awarded will be announced on or about Jan. 27, 2008.  Applications must include the following components:

• Resume, including description of science or engineering educational credentials;
• Undergraduate transcript (with GPA);
• Legal writing sample;
• At least one letter of recommendation; and
• A 500-word personal statement including information about why the candidate wishes to pursue a career in patent law, why he or she is interested in the McAndrews firm as a place to work, and how the candidate’s background and/or life experiences would improve diversity in the field of intellectual property law.

The fellowship position will be administered as part of McAndrews’ Summer Clerkship program.  As a summer associate in the McAndrews office, the Diversity Fellow will gain experience in a wide range of intellectual property law and be mentored by a member of the firm’s Diversity Committee while establishing relationships with other members of the firm. 

To access the application and other fellowship information, visit the McAndrews’ Web site at www.mcandrews-ip.com/diversity_fellowship.

CAFC Reverses Injunction Against Contributory Infringer as Overbroad

MTP v. Marathon Labels (Fed. Cir. 2007) (Non-precedential)

A jury found that the defendants were contributory infringers; had induced infringement of the claims; and were willful infringers. The district court overturned the willfulness finding but then issued a permanent injunction barring the defendants from using, selling, offering to sell, or importing the Smart Surface Placard that was used to re-label reusable containers in violation of the method claims.

On appeal, the CAFC quickly reversed the injunction finding it over-broad. In particular, because the products themselves do not infringe, the injunction should not prohibit sales for export.

Given the parties’ admissions, the district court’s injunction is overly broad and therefore an abuse of discretion. Given the parties’ admissions, the district court should not enjoin sales of the SSP to locations outside the United States, and should not enjoin sales of the SSP to resellers who sell to locations outside the United States.

This case again raises the general issue of how injunctive relief should be formulated against contributory infringers of a method claim.

Notes:

• Read the lower court decision.
• Cite Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770 (Fed. Cir. 1993) (standard of reviewing injunctive relief)

CAFC to Decide Important Revival Case: Aristocrat v. IGT

Aristocrat Technologies Australia (ATA) v. International Gaming Technologies (IGT) (Fed. Cir. 2008 PENDING)

ATA missed its US national stage filing by one day. The PTO granted ATA’s petition to revive the application based on the applicant’s seemingly legitimate claim that the “entire delay” in filing the appropriate papers “was unintentional.” 

During litigation, the district court found that the PTO lacked authority to revive unintentionally late national stage applications.  Rather, according to the court, the PTO can only revive such applications when the cause of delay meets the much higher standard of being unavoidable. The Court found its statutory support from 35 USC 371, which requires the PTO to hold late national stage applications as abandoned unless “such failure to comply was unavoidable.” In the process, the court was able to compare other revival statutes within the Patent Act:

• Section 111 allows for revival of original applications unintentionally or unavoidably abandoned due to a failure to submit the oath on time.
• Section 133 allows for revival only of applications unavoidably abandoned for failure to respond to an office action.
• Section 151 allows for revival only of applications unavoidably abandoned for failure to pay the issue fee. 

Thus, according to the Court, applicants can recover from forms of unintentional abandonment but not others.

Now, ATA has appealed — arguing primarily that amendments to the PTO fee statute (35 USC 41(a)(7)) creates statutory authority for reviving unintentionally abandoned applications. Section 41 specifically refers to reviving applications unintentionally abandoned under Sections 133 and 151. As mentioned above, by their terms, neither of those statutes allow for revival of unintentionally abandoned applications. 

In ATA’s view, it does not need to prove that its interpretation is the “correct interpretation.” Rather, according to ATA, the PTO should be given deference in interpreting the Patent Act and thus, any reasonable interpretation of the Statute should be upheld. 

ATA also makes an argument that the court’s invalidation of the patent for “improper revival” does not fit within any of the four defenses listed in 35 USC 282.  That argument seemingly fails if the court simply held the patent invalid for failure to comply with Sections 371 or 133. (Section 282 allows for a finding of invalidity based on failure to meet a “condition for patentability” found in the Patent Act). On the other hand, ATA does have some caselaw supporting this position. Ferguson Beauregard v. Mega Sys., 350 F.3d 1327 (Fed. Cir. 2003). Ferguson and other similar cases are easily distinguished as dealing with administrative implementation of the revival standard rather than the broader question of whether revival for unintentional abandonment is legally allowed under the statute.

Impact: If the CAFC affirms, a large number of patents will instantly lose their value. I expect the AIPLA to file a strong Amicus brief supporting ATA. IGT’s brief supporting the lower court’s decision is expected soon.

Prediction: I expect that the CAFC will reverse — holding that the PTO does have statutory authority to revive these unintentionally abandoned applications (but not giving any deference to the PTO’s interpretation of the law).

Notes:

• Read the case [LINK]
• Read ATA’s Brief [LINK]
• Read my prior discussion of the case [LINK]
• Statutory provisions for revival due to unintentional abandonment:
  • 35 USC 111: Failure to submit fee and oath of a patent application;
  • 35 USC 41: Fee schedule for revival of unintentionally abandoned applications. This section provides a specific fee for revival of unintentionally abandoned applications as an explicit alternative to revival of unavoidably abandoned applications; and
  • 35 USC 122: Abandonment due to failure to rescind nonpublication request.
• Statutory provisions that only refer to revival due to unavoidable abandonment:
  • 35 USC 133: Abandonment due to failure to respond to PTO notice (Normally a 6–month deadline, but may be less);
  • 35 USC 151: Revival for failure to pay issue fee; and
  • 35 USC 371: Failure to comply with national stage filing requirements.
• PTO Rules:
  • 37 C.F.R. 1.137(b) provide for revival of applications based on an applicant’s unintentional delay in replying. Under the rule, abandoned applications, reexamination prosecution terminated under §§ 1.550(d) or 1.957(b) or limited under § 1.957(c), or lapsed patents may all be revived under this standard.  The PTO rules are, however, subordinate to statutes.
• Caselaw:
• Lumenyte v. Cable Lite (Fed. Cir. 1996): Patentee revived case as unintentionally abandoned. The CAFC affirmed the ruling without questioning whether such revival is ever permissible.
• Morganroth v. Quigg (Fed. Cir. 1989): Affirming that the Director does not have authority to revive an unintentionally abandoned patent application “that resulted from the applicant's failure to appeal from a final district court judgment that upheld the Commissioner's prior refusal to issue a patent.”
• New York Univ. v. Autodesk, Inc., 2007 U.S. Dist. LEXIS 50832 (SDNY 2007): The court found that the delay in reviving was not even unintentional. The court explicitly did not reach the question of whether revival for unintentional abandonment due to failure to respond to an office action is even permitted. (Remember, 35 USC 133 only allows for revival of unavoidably abandoned applications.)
• Field Hybrids v. Toyota (D.Minn 2005).

IDS Rules Moving Forward

The White House has now approved the PTO’s proposed changes to the Information Disclosure Statement Requirements “and other related matters.”  The final rules have not been made public, however, the rules are expected to:

• impose a requirement for the personal review of, and to provide information about, certain citations;
• permit only timely IDS submissions;
• only permit the filing of an IDS after the mailing of a notice of allowance if a claim is admitted to be unpatentable and a narrowing amendment is also submitted
• permit third parties to submit prior art up until the mailing of a notice of allowance after application publication;
• no longer permit an IDS to meet the submission requirement for a request for continued examination (RCE);
• permit certain amendments and petitions so applicants will not have to file a continuation application or an RCE for such items; and
• revise the protest rule for dealing with unsolicited information received from third parties.

The continuation rules were finally published about six-weeks after OMB approval. If the PTO follows a similar schedule, expect a notice in later January 2008 regarding additional implementation of IDS requirements. 

Links:

• http://www.reginfo.gov/public/do/eoReviewSearch (Search for recent DOC reviews)
• Patently-O: Prepare for new IDS rules
• Noonan on IDS Rules
• Moatz on Ethical Duty to Read IDS Submissions

Hot Potato: Revival Petition Must Convince Court

New York University v. Autodesk, 495 F. Supp. 2d 369 (S.D.N.Y. 2007)

NYU sued the software manufacturer Autodesk for infringement of two of the University’s gesture synthesizer software patents. Both patents stemmed from an original non-provisional application. (Serial No. 08/284,799). That application received a final office action in the Spring of 1997, but the PTO did not receive any response until November 1998 – 18 months later.

Most medical errors arise during transfer of care. Orders and other knowledge are lost when doctors and nurses go off-shift and are replaced by a new staff. A similar issue arose here. As the court spells out the facts: NYU transferred its prosecution from the Wyatt Gerber firm to Kenyon & Kenyon; After transfer, Wyatt Gerber received the the Final OA and forwarded it to both Kenyon and NYU; Soon thereafter, the Kenyon attorney assigned the case left the firm. By the six-month deadline, the application was still caught in a hot-potato game and no response was filed. In December 1997, the Examiner duly issued a notice of abandonment and (as evidenced in the prosecution history) even telephoned the Kenyon attorney who acknowledged the abandonment.

Months later, a newly assigned Kenyon attorney filed a petition to revive based on unintentional abandonment, which was granted by the PTO.

On summary judgment, the district court agreed with Autodesk that the revival was contrary to law.

Under the APA, PTO petition decisions will be upheld unless “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” Thus, the PTO decision will be upheld so long as there is a “rational connection between the facts found and the choice made.” APA challenges are generally reviewed on the administrative record — here that is the prosecution history.

Here, the court found that NYU was clearly on notice of the abandonment (based on the telephone call to Kenyon’s attorney); that NYU offered no justification for the delay in its petition for revival; and that the PTO offered no reasons for its revival. Consequently, the revival was an “arbitrary and capricious” act and was therefor set aside.

Case dismissed. This is no appeal.

 

Case Dismissed: DC Court Dismisses Case against Deputy Director Peterlin

The Patent Act (35 U.S.C. 3(b)) indicates that the Deputy Director of the USPTO have “a professional background and experience in patent or trademark law.”

Margaret Peterlin, the current deputy director, was sworn in as Deputy Director in the Spring of 2007. A few days later, Greg Aharonian, along with David Pressman (Author), Steve Morsa (Inventor), and David Lentini (Patent Attorney), filed suit in Washington DC Federal Court to force Deputy Director Peterlin out of office.

Now, the DC District Court (Judge Robertson) has dismissed the lawsuit on the pleadings based on a two-step analysis:

• Section 3(b) creates no private right or remedy in itself. Thus, the plaintiffs cannot sue directly under that section of the Patent Act.
• The Administrative Procedure Act (APA) does allow for a private right of action. However, the Commerce Department’s appointment decision here is “unreviewable under the APA” because the Section 3(b) of Patent Act lacks “standards that a court could use in evaluating this type of high-level personnel decision.”

At the foundation of this analysis is the presumption “that decisions involving high-level policymaking personnel are left primarily to the executive.” 

In my view, the court made the correct decision here, although the reasoning is off.  Certainly, the “professional background” provides at least some direction to the court in making its decision.

Design Patent Claim Construction

Kellogg v. Nike, 2007 WL 4118898 (D. Neb. 2007)

Design patent claim construction usually involves a court examining a series of drawings. When submitting his patent application, Kellogg included a statement that his invention covered a “cap with vents formed along the seams extending radially from the center.” During prosecution, the PTO removed that statement under MPEP 1503.1. In particular, the Examiner found that the “since illustration in the drawing views is its own best description, the statement preceding the claim is not necessary and should be removed.”

Soon after Markman, the Federal Circuit determined that claim construction is also a requirement of design patent litigation. Elmer v. ICC Fabricating (Fed. Cir. 1995). The claim construction process usually involves the judge writing a paragraph describing the “visual impression” created by the drawings. Contessa v. Conagra (Fed. Cir. 2002). As construed, design patent claims should only include non-functional aspects of the design. Durling (Fed. Cir. 1996).

Here, the court described what he saw:

An ornamental design for a vented baseball-styled cap as defined by the overall visual impressions as shown in figures 1 through 4. The cap has a hemispherical cap portion with a brim extending generally from one side of the cap portion. The hemispherical cap portion has four oblong-shaped vents that have sharply narrowing v-shaped ends. The vents are symmetrically shaped and extend along the seams of the panels of the cap in a generally “X”-shaped fashion with the center of the “X” being located at the top center of the cap.

Of course, one problem with this type of claim construction is the difficulty in determining the level of detail. For instance, under this construction, a fitted cap could infringe even though the drawing clearly shows an adjustable cap. On the other side, the required shaping and symmetry is quite detailed. It is also unclear from the claim construction whether the claim is open ended — thus could a cap sporting five vents be infringing?

Notes:

• These questions will be answered in the upcoming Egyptian Goddess en banc appeal.
   

 

Patently-O TidBits

• HOLMAN BIOTECH IP: Professor Chris Holman has just begun a blog on Biotech IP Law. In his initial post, Holman takes a global perspective on late claiming and thinks about how the PTO’s proposed continuation rules fit into that mesh. Prior to becoming a professor, Holman was, among other things, in-house patent counsel at a biotech startup.
• First Page Reports: Longtime patent blogger Matt Buchanan is headding up the project as part of his PatentFizz project.
• File Server Needed: As you know, I like to post original documents for readers to download and study. I have been running into some technical issues with the current service. Any suggestions for a service that allows me to do this both cheaply and easily?
• Ray Niro vs. Patent Troll Tracker: This could be a movie. [Read the Story][Troll Tracker]. One bottom line is that Patent No. 5,253,341 (covering online use of JPEG images) is once again being asserted. Greg Aharonian and the Green Bay Packers were also sued on the patent in 2000…
• Blog Sponsor: I am very happy that the law firm of McDonnell Boehnen Hulbert & Berghoff has agreed to stay-on as the blog’s exclusive sponsor until May 2008.  I’m attempting to make any advertising as non-obtrusive as possible. Please send me an e-mail with specific comments on the blog design & layout. (dcrouch@patentlyo.com).
• Patent Agent Jobs: Twenty-Five Jobs Listings for Patent Agents.

Patent Litigation Trends: Survey Results

Fulbright & Jaworski recently released some results from its survey of 300 GC’s (and AGC’s) at large US & UK companies. Results:

• Very large companies (>$1B) are much more likley to be hit with charges of patent infringement than are smaller companies (<$100m).  Unlike smaller companies, the very large companies also claim that the quantity of charges are on the rise. A small percentage (~3%) of companies with a revenue greater than $100m have defended against more than 50 claims in the past three years.
• For most defendants, the major concern is not the potential for an injunction, but rather the cost of litigating.
• The very large companies are also more likely to be on the plaintiff side asserting their own patents. The report claims a close correlation between company size and likelihood of enforcing its patent claims through litigation.

The report is free after you provide your contact info: Link. I can also e-mail a copy to you.

 

CAFC: Even with Deference, PTO Misinterprets its Own Rules

In re Garner, Slip Op. 2007-1221 (Fed. Cir., Dec. 5, 2007)

Garner submitted shoddy evidence to prove an earlier invention date and the Examiner refused to declare an interference.  At the BPAI, Garner added a few additional documents to his Rule 202 priority filing.

37 C.F.R. § 41.202(d)(2) allows a BPAI judge to declare an interference accompanied with an order to prove why the junior party should “prevail on priority.”  Under the rule, “[n]ew evidence in support of priority will not be admitted except on a showing of good cause.”  Here, the BPAI excluded the additional documents as “new evidence” that should have been submitted earlier.

On appeal, the CAFC granted deference to the PTO interpretation of its rules, but still found the PTO’s interpretation erroneous.

PTO Deference: Under Star Fruits and other cases, the CAFC has repeatedly held that the PTO is granted deference in interpreting its own regulations. In Lilly v. UW, the court went on to hold that the PTO’s interpretation of its rules “will be accepted unless it is plainly erroneous or inconsistent with the regulation.”

New Evidence: The “new evidence” submitted by Garner was actually evidence already in the patent file history. Namely, he submitted the provisional application; the specification of the non-provisional; and a previously filed 131 declaration for the appealed case.  The BPAI considered those filings new evidence because they were not part of the original Rule 202 filing.

On appeal, the CAFC took issue with that evidentiary ruling — instead holding that under Rule 202(a)(5), the specifications are automatically part of the evidence to be considered. The CAFC did allow the 131 declaration to be excluded.

Despite winning the evidentiary ruling, Garner was unable to provide sufficient corroborating evidence of prior invention. He had dated photographs, but no evidence proving that his photographed machine actually worked:

“While ‘the law does not impose an impossible standard of ‘independence’ on corroborative evidence by requiring that every point of a reduction to practice be corroborated by evidence having a source totally independent of the inventor . . . [,]’ corroboration of the existence of the device is not sufficient in this case to establish corroboration of reduction to practice. It is also necessary to corroborate that the device worked for its intended purpose.” Quoting Cooper v. Goldfarb, 154 F.3d 1321 (Fed. Cir. 1998).

Thus, the CAFC affirmed the BPAI’s Judgment that Garner failed to “make a prima facie showing of priority.”

 

Finisar v. DirecTV: Compulsory Patent Licensing

Finisar v. DirecTV (Fed. Cir. 2007 — On appeal)

A jury found Finisar’s patent willfully infringed. However, the Eastern District of Texas denied injunctive relief. Instead, the court entered a compulsory licensing scheme that gives DirecTV a right to continue to infringe after paying a fee.[Link] On appeal, Finisar lays out its claim for injunctive relief.

Short Facts: Finisar does not practice its patented invention and is unlikely to ever practice its invention. Likewise, Finisar has not licensed its invention. An injunction blocking DirecTV from selling its infringing satellite television services would potentially create a monopoly for EchoStar. And, DirecTV has money to pay for any damages.

In eBay v. MercExchange, the Supreme Court held that injunctive relief in patent cases requires satisfaction of the traditional four factor test of equitable relief. In eBay, the Supreme Court also made clear that the injunction decision must be made on a case-by-case basis without any bright-line rules or Litmus tests.

About Money: The sufficiency of monetary damages relates to both of the first two eBay factors: (1) whether an injunction would protect against irreparable harm to the patentee and (2) whether damages at law are adequate to compensate the patentee for any continued infringement. Finisar first argues that these two these factors must be wrapped together. The argument is simple – a failure of relief at law results in irreparable harm and vice-versa. Tying the two factors is useful for a patentee because it would then only need to prove one of the two factors primary factors.

Particularly focusing on money damages, Finisar argues that damages are inadequate because the calculation of future royalties is speculative and too uncertain. This type of argument, if factually true, regularly supports injunctive relief.

EBay also declares that the factors must be determined on a case by case basis rather than applying categorical rules. Thus, the fact that a plaintiff is only truly interested in a monetary reward may be a legally insufficient reason to deny relief.

Presumption of Irreparable Harm: Although it avoids using the word ‘presumption,’ Finisar argues that the finding of patent infringement creates a presumption of irreparable harm. This presumption issue was not answered by the eBay decision. In fact, that issue could be seen as the dividing point between the two concurring opinions by Roberts and Kennedy. Following this theme, Finisar argues that the particular harm created by allowing ongoing infringement includes: (1) destroying Finisar’s ability to grant an exclusive license; and (2) hurting Finisar’s ability to license to others because the compulsory license does not deter infringement. A well paid damages expert could calculate the value of those harms and include them in the monetary damage award. I would include the further argument in favor of relief: that long-held precedent would require a presumption of irreparable harm.

---

Notes:

• DirecTV is appealing the judgment as well — arguing that the patent is invalid and not infringed.
• File Attachment: Finisar.DirecTV.Brief.pdf (6908 KB)
• File Attachment: Finisar.Brief.pdf (3878 KB)
• File Attachment: Finisar.DirecTV.Reply.pdf (4284 KB)
• File Attachment: Finisar.Reply.pdf (2868 KB)
• File Attachment: Finisar.NYIPLA.pdf (1706 KB) (Amicus)
• File Attachment: Finisar.NYIPLA.Reply.pdf (946 KB) (Not entered by Court)
• File Attachment: DIRECTV's_Rule_28(j)_Letter_re_Paice_(11-14-07).pdf (126 KB)
• File Attachment: Finisar's_Rule_28(j)_Letter_re_Paice_(11-26-07).pdf (221 KB)

Patently-O TidBits

• PPAC Patent Report: Major reform is necessary. [LINK] [About PPAC]
• New Federal Rules of Civil Procedure: On December 1, the newly revised Federal Rules of Civil Procedure (FRCP) became effective. The rule changes are primarily stylistic rather than substantive. At times, however, it appears that the drafters traded off the goal of preserving the existing meaning in favor of clarity.  Litigators should take time to parse the changes.  [LINK]
• EPO: Norway & Croatia will become EPO members on January 1, 2008. No retroactive designation is allowed. [LINK] [LINK]
• Pro Bono: Patent Hawk reports on the recently dismissed case where an inventor sued his pro bono patent attorney for malpractice. [LINK]
• Patent Reform: Professor Dinh (Georgetown) writes in the American Spectator that we need patent reform: “The reforms proposed by the Patent Reform Act of 2007 are precisely the type of congressional action needed. The Act will remove obstacles to growth and restore balance to the patent system. In particular, the Act will protect inventors' property rights and encourage innovation by providing a meaningful administrative review process to clarify the scope and validity of patents, and the Act will clarify and modernize the damages rules, thereby eliminating the perverse incentives that foster litigation.” [LINK]
• Patent Troll Tracker: Patent reform is not a ‘boon to Chinese pirates.” [LINK]