Patent Law Blog (Patently-O)

Patently-O Bits and Bytes: Conferences

Recent Patent Law Job Postings:

• Patent Counsel - Mid-sized Corporation - Gaithersburg, Md.
• Patent Associate - Law Firm - Seattle, Wash.
• Patent Prosecution - Law Firm - Los Angeles, Calif.
• Assistant/Associate Clinical Professor of Law - University of Connecticut - Hartford, Conn.
• Patent Attorney - Law Firm - Houston, Texas
• Patent Attorney/Agent - Law Firm - Denver, Colo.
• Patent Attorney - Non-Profit - New York, N.Y.
• Patent Attorney – Large Corporation - Northern Va.
• Patent Agent/Counsel - Small Corporation - Austin, Texas
• Patent Agent/Associate - Law Firm - Portland, Ore.

Recent Patent Law Job Postings:

• World Research Group (WRG) is a new media sponsor of the Patently-O Jobs site. July 29-30, WRG is hosting the "5^th Annual Conference on Patents and the Financial Services Industry." They have assembled the top speakers in the industry. [LINK]

What’s Wrong with Software Patents?

by James Bessen and Michael J. Meurer

[This post is the third in a series of posts based on empirical research in a new book, Patent Failure, by James Bessen and Michael Meurer. Read Part I and Part II]

Patents on computer programs, financial processes and business methods have been controversial at least since the 1960s. Surveys regularly find that computer programmers are opposed to patents on software by a wide margin. In what other field is the class of inventors so opposed to patents?

Is there a problem?

Some people contend that there is nothing particularly wrong with patents on software, arguing that "patent thickets" are not preventing innovators from entering software markets. But the latest evidence [LINK] suggests that patent thickets do, in fact, inhibit startups in software. More important, patent thickets might not be the only or even the most important problem with software patents.

Indeed, our evidence suggests an important problem of another sort: software patents are four times more likely to be litigated than are chemical patents; business methods patents are twelve times more likely to be litigated; finance patents are 49 times more likely. Moreover, the evidence also suggests that these patents have lower values than chemical patents, so these patents are not being litigated more because they are more valuable.

Other people admit that there are problems with software patents, but they suggest that this is only temporary: once judges and patent examiners understand this technology better, once they have become familiar with the prior art, etc., then the uncertainty about these patents will abate and litigation rates will go down. But the evidence shows that after a decade of issuing software patents in large numbers (over 200,000), the probability that a newly-issued software patent will be litigated is continuing to rise.

So it does seem that patents on software and related technologies at least have a particular problem with litigiousness. And this problem is central to the poor performance of the patent system generally. In the previous post we highlighted how litigation costs have substantially outgrown the profits that public firms receive from patents outside of the pharmaceutical and chemical industries. In 1999, 38% of the cost of litigation among public firms arose from lawsuits involving software patents; preliminary data suggest that this share has increased since then. Litigation over software patents is clearly a major factor in the poor performance of the patent system. So in a very real way, the overall performance of the patent system cannot be fixed unless the particular problems of software patents are also fixed.

Why are there so many lawsuits over software patents?

A variety of evidence leads us to conclude that software patents are involved in relatively more litigation because they are more likely to have "fuzzy boundaries." Statistical evidence shows, for example, that software and business method patents are much more likely than other patents to have their claim construction appealed to the Federal Circuit. Part of this tendency arises because of the nature of the technology and part arises because of the way the courts have treated this technology.

Our reading of the case law convinces us that patent law tolerates too many software claims untethered to any real invention or structure; in such a world clear boundaries are unattainable. When patent claims relate to actual devices or chemical structures, then their meanings can be interpreted by reference to those physical or chemical entities. However, when the words refer to abstract ideas, they are often subject to multiple interpretations and are therefore more ambiguous. For example, many people thought that "point of sale location" (in the famous E-Data patent) was computer industry jargon for that place in a retail store where transactions take place, formerly occupied by a cash register. When the Federal Circuit interpreted this claim, they decided that it referred to any location where an e-commerce transaction might take place, although it is highly unlikely that this is what the inventor had contemplated 17 years earlier. Thus a broadly worded invention for a kiosk in a retail store was read to cover a broad swath of e-commerce. Not surprisingly, this patent generated quite a few lawsuits.

Patent doctrines that might serve to prevent such fuzzy claims have been undermined. For example, the enablement doctrine has historically been used to keep patents from claiming much more than what was actually invented. Unfortunately, as a result of Federal Circuit decisions on software patents during the 1990s, these patents no longer need to provide computer code, a flowchart, nor any detailed description of specific operation in order to be enabled.

Fixing the problem

A lot of people have very strong opinions about how patent policy should or should not change regarding software patents. We wish we had such clarity, but we do not. We are convinced that the current treatment of software patents creates significant problems and that these are getting worse. But the problem is complex and fixing it will likely involve multiple changes in law and institutions.

Certainly, KSR should help and so would a stronger indefiniteness requirement. Additionally, it might help to restore a substantial enablement requirement for software patents so that these patents are restricted to claiming more or less what was actually invented and disclosed.

Possibly, a subject matter test might help. We confess we do not have a rule that cleanly distinguishes inventions using software that should be patentable from abstract processes that should not be patentable. Some people argue that any attempt to proscribe subject matter will only increase uncertainty and encourage avoidance through clever claim drafting. But the evidence suggests that the subject matter tests used following Benson and Flook did not, in fact, encourage excessive litigation during the 1980s, even though there was some evasive claim drafting. Litigation rates for software patents then were about the same as those for all patents. On the other hand, we doubt that a subject matter test by itself would be sufficient to fix the problems of software patents.

Book Review: Markman at the Beach

Review by Professor Shubha Ghosh

A Patent Lie
A Novel by Paul Goldstein

For those who are planning a summer trip, especially those IP-geeks who cannot completely get away from work, make sure to pack a copy of Paul Goldstein's latest A Patent Lie. Like his first novel, Errors and Omissions, published two years ago, this new legal thriller transforms intellectual property practice into a tale of murder and conspiracy.

I had heard a rumor that Goldstein's second novel would be about a Markman hearing. Fortunately, the proceeding plays only a small part in the story which involves Buffalo attorney Michael Seeley (referred to as Seeley throughout the book) being called to the Bay Area by his brother to represent a South San Francisco start-up in a patent infringement suit against a Swiss pharmaceutical company. All of this is a routine matter except that previous counsel met an early demise (called a suicide) under a commuter train. Patent litigation often is not a matter of life or death, but adding to the tension is the patent at issue in the case, which covers a treatment for AIDS. But unlike the global corporate conspiracy at the heart of another recent novel dealing with pharmaceuticals, The Constant Gardener, at stake in A Patent Lie are the details of litigation, which rise above the mundane with the personal, political, and professional relationships that Goldstein depicts compellingly.

At one point in the novel, a character notes that "not only are cases mostly about facts, but no facts are more important than the personalities of the participants." And it is the personalities that drive the story here. Michael Seeley, Goldstein's protagonist who appeared in the first novel, is the world weary East Coaster, retreating to his home town of Buffalo, New York, to deal with professional and personal crises. The West Coast offers temptations represented here by Seeley's brother whose involvement in the start-up and the law suit becomes more diabolical by degrees. Temptations also beckon in the character of Lily Warren, a brilliant research scientist who may or may not have been the first to invent the invention in dispute. I doubt that priority disputes have ever taken such inscrutable, or romantic, turns. The law suit takes several twists with an important reversal of interests occurring at the end. Finally, the pushes and pulls on Michael Seeley force him to confront many tensions: his rivalry with his brother, the ethical conundrums of suing a competitor, and the role of a patent lawyer within the patent system.

The book is a real treat for those who like intellectual property (despite the anti-patent message of the book) and may offer something for the generalist reader who likes to get lost in a legal thriller while basking in the summer sun. After reading Goldstein's latest, try his first book, which manages to make copyright clearance somewhat riveting. Let me also recommend Killer Smile'>Lisa Scottoline's Killer Smile, another legal thriller involving patent law.

So what will Goldstein's next thriller be about? Antidilution? Misappropriation? Exhaustion? The Unpredictability of Fair Use? Whatever the topic, I am sure it will add color to the black letter of intellectual property law.

Patently-O Bits and Bytes: Family News

• I’m happy to report that my wife gave birth yesterday to a big healthy boy (9 lb 12 oz). We’re calling him Charley after his grandfather who died last June. Most of the posts for the next two weeks will be written by several guest authors. I suspect that you will enjoy the change of pace. On a similar note: For those of you trying to contact me the past few weeks, I apologize for being nonresponsive. Dennis Crouch

Ron Slusky: Five Prescriptions for Effective Analyzing an Invention and then Claiming It

I asked Ron Slusky to share some insight from his new book on patent prosecution and claim drafting. The book is titled Invention Analysis and Claiming: A Patent Lawyer’s Guide (American Bar Association 2007). [Currently $51 on Amazon] Information about the book, including extensive excerpts, can be found at www.claim-drafting.com. 

The following are Slusky’s “five prescriptions for effectively analyzing an invention and then claiming it.”

1. Identify the inventive concept by beginning from the problem that the inventor set out to solve and then asking how, broadly and functionally, the inventor solved that problem

The popular alternative approach of drafting a claim of some indeterminate breadth directed to the embodiment(s) and then whittling that claim down will surely result in a broader claim to the embodiment(s) than what one started with. But that approach may still miss the broad invention because if words defining the inventive concept are not present in the original claim—e.g., a new and non-obvious functional interrelationship—such words are unlikely to somehow magically appear during the broadening process.

2. Begin by drafting a problem-solution statement rather than a claim

As just noted, drafting claims should not be the primary vehicle for discovering the invention. The structural formalisms of claim drafting, while perhaps familiar and facilitating, can all too easily mislead us into thinking we have discovered the inventive forest when we have actually only identified some of its trees.

Begin, instead, by drafting a problem-solution statement and use that as the basis for drafting the patent application’s broadest claims A problem-solution statement is a single sentence stating as broadly as possible, but without reading on the prior art, a) the problem the invention solves, and b) the inventor’s solution to that problem. Here, for example, is a problem-solution statement for a seminal invention of rocket pioneer Robert Goddard:

The problem of enabling a rocket to carry a large amount of combustible material while keeping the weight of the rocket as low as possible is solved by successively feeding portions of the material to the combustion chamber from a separate casing containing the supply of combustible material.

This leads directly to the following claim appearing in Goddard’s U.S. patent 1,103,503 issued July 14, 1914:

A rocket apparatus having, in combination, a combustion chamber, a casing containing a supply of combustible material, and means for successively feeding portions of said material to said combustion chamber.

3. Dream Up Alternatives, Including Some Farfetched Ones

A powerful tool for analyzing an inventor’s embodiment to extract the inventive essence is to dream up some alternatives to the inventor’s embodiment(s), including some alternatives that are farfetched. These are embodiments that, while outlandish or “wacky,” would nonetheless solve the problem to at least some extent. The more farfetched the better. The point is not to claim, or even to disclose, these embodiments in the patent application. The point is that even a farfetched embodiment can solve the problem without involving some of the implementational details required by practical embodiments. Thus dreaming up farfetched embodiments is a way of isolating the essence of the invention from its illustrative implementational details. Thus, for example, envisioning that a touch-tone telephone might have miniature trained parrots to whistle the various tones might be the key to realizing that the idea of using tones to signal from a caller’s premises to the telephone network was not limited to the use of oscillators and physical push buttons, neither of which are used in, for example, web-based telephony systems like SkypeTM.

4. Endeavor to discover “What’s Really Going On”

One way of gaining insight into the breadth of an invention is to ask oneself What’s Really Going On? or—more completely—What's Really Going On to Solve the Problem? The word "really" in this question emphasizes a search for the fundamental problem and the fundamental solution. What is going on really? The exhortation to discover What's Really Going On? invites us to exercise our technological curiosity; to dig down and discover what the invention is accomplishing at its essence; to understand what is going on at the 50,000-foot level; to see the invention in terms of fundamental causes and ultimate effects, without all the stuff in between. Thus answering What’s Really Going On? means figuring out—and ultimately claiming—what it is that solves the problem in at least a rudimentary way—not what solves the problem in the most elegant, efficient or commercially attractive way. Indeed, competitors may sacrifice a measure of elegance, efficiency or even commercial attractiveness in their products if it means being able to get into the market or avoid paying a patent royalty. Or they may devise their own elegant, efficient or commercially attractive implementations. Try to identify what is common among all of the embodiments, including some “farfetched” embodiments that the inventor and attorney may be able to collaboratively dream up, as described above. Identifying that which is common to all of those embodiments provides a good start to answering the question “What’s Really Going On?”

5. Envision the “Opposing Team”—the potential infringer and his patent attorney

When analyzing an invention and drafting claims based on the analysis, do not focus solely on what the inventor has done. Focus, rather, on what some competitor may do that takes advantage of what the inventor has done while avoiding the claims. The Opposing Team will be poring over the claims after the patent issues, looking for limitations that their product does not meet, or for some way to redesign the product to that end. Thus as each word, phrase and structural element appears on the computer screen, the claim drafter should imagine himself to be the Opposing Team and try to think of a way around that limitation, just like the real-life Opposing Team will do. In short, the patent attorney endeavoring to further his client’s interests is aided in that task by taking on the mindset of a competitor’s attorney endeavoring to further his client’s interests.

Buy the Book at Amazon or from the ABA.

Ex Parte Reexamination Statistics II

To get some sense of the PTO’s current ex parte reexamination practice, I looked at the 2000+ reexamination certificates that have been published in the Official Gazette since January 2000.  There are three potential outcomes for any particular reexamined claim: validity affirmed; validity affirmed with an amendment; and cancelled. In addition, claims may be added. 

Outcomes: From my sample, 71% of the completed reexaminations resulted in claims that were either amended or cancelled while only the remaining 29% resulted in all claims being confirmed. A much smaller number – 12% – of the reexaminations resulted in all claims being cancelled. 

The middle ground: 59% had at least one independent claim confirmed while 50% included at least one amended claim.  For the 34 completed design patent reexaminations, the single claim was confirmed as valid 16 times and cancelled 18 times.

Timing: The reexamination certificates in my sample had an average pendency of 33.5 months (median 28.5 months).* The PTO's reported average and median are 24.0 months and 18.6 months respectively. The difference apparently comes from their inclusion of reexaminations from the 1980's and 1990's which had much lower pendency than more recent numbers. [PTO Data 1981-2007]. 

Outcome & Timing: Reexaminations that simply resulted in a confirmation that the the initial claims are valid were resolved more quickly (averaging 24 months) while those resulting in cancellation of all clams were much slower (averaging 45 months). Cases at the longer end of the spectrum often involved either BPAI appeals or lost files.

• Thanks to several Patently-O readers for showing me how to find reexamination certificates. I was able to use the Westlaw database for this search. (Remember law school and the free academic access). The data can be compiled from the PTO OG, but that would be a larger job. The PTO does maintain a list of all the issued reexamination certificates here.
• * I roughly calculated pendency by measuring the elapsed time from publication of a reexamination request to publication of the reexamination certificate.
• Reexamination Statistics I

Microsoft's Patenting Trend

Several years ago, Microsoft announced its new policy of obtaining patents. As the numbers below — the software company is being successful in this push.

(Data here: http://www.uspto.gov/web/offices/ac/ido/oeip/taf/all_tech.htm). The company’s most recent design patent is directed to an icon of a handheld device .

 

Tags: Microsoft, Patent

Federal Circuit Announces Proposed Amendments to Its Internal Operating Procedures

The Federal Circuit has proposed several amendments to its Internal Operating Procedures (IOP).  Comments on the proposed changes are due by July 18, 2008. Most of the proposed changes reflect current practice. [Proposed changes]

Notable changes include:

• Motion practice: When a motion relates to an appeal that has already been remanded, the motion may be referred to the same panel for consideration.
• Expedited Appeal: The ‘motion panel’ may choose to hear an appeal as the ‘merits panel’ upon granting a motion to expedite.
• Confidential Material: Materials submitted subject to a protective order will be disposed of upon completion of the case.
• Making orders Public: The old rules distinguished how precedential and non-precedential materials were publicized. Under the new rule, “all dispositions” are to be published in the daily disposition sheet.

John McCain’s Prize System: $300 Million for Battery Power

For a long time, monetary prizes have been offered as an alternative to patent rights as a mechanism for driving innovation. In 1714, for instance, the British Parliament offered £20,000 for a solution to the "longitude problem" – to determine the current longitude of a ship at sea. John Harrison solved that problem by creating an accurate mechanical clock set to GMT. Longitude was calculated as the difference between the ship's local time (as measured by the sun) and GMT. [LINK]

Republican nominee John McCain recently proposed the American version: $300,000,000 "for the development of a battery package that has the size, capacity, cost and power to leap frog the commercially available plug-in hybrids or electric cars" – but that cost 30% less. The prize would be open to any company worldwide – so long as they planned to sell in the US. Although unclear, I suspect that the winner would also be able to protect its innovation through patents. In Harrison's case, he was required to "surrender the innovation for public use."

Unlike obtaining a patent, prize systems typically require that the technology be proven through actual monitored testing. That means the winner is more likely to bring the product to market. When thinking about this type of system, I like to compare prizes to patents and also to direct government funding (subsidy/grants). Table 1 below tells most of the story.

	Patent	Grants	Prize
Success Required for Payout	Yes	No	Yes
Government Chooses Technology	No	Yes	Yes
Government Outlay of Funds	No	Yes	Yes
Provides Seed Money for Venture	No	Yes	No
Payout is driven by Market	Yes	No	No
Table 1

 

Notes:

• Now Pending S.2210 is the "Medical Innovation Prize Act of 2007." The act would attempt to "de-couple" the reward for pharmaceutical product research from the market price of the product. Unlike more traditional prizes, this one would not pre-select the goal. [LINK] In the mid 1990's Economist Michael Kremer proposed that the government should buy-up important pharmaceutical patents and then dedicate them to the public.
• Attorney/Entrepreneur Michael Martin adds his thoughts: Why the Venetians didn't invent a Prize system for Inventions

Ninth Circuit Applies Federal Circuit Law in Interpreting Contract to Assign Patent Rights

Los Angeles Biomedical Research Institute v. White (9^th Cir. 2008)

The Federal Circuit has repeatedly held that contracts to assign patent rights should be interpreted under state law. In a recent opinion, the Ninth Circuit came to the opposite conclusion — holding that “patent law terms” in an employment contract should be interpreted according to to patent law principles.

Dr. White’s Patent & Copyright Agreement with LA Biomed read as follows:

I understand and agree that every possibly patentable device, process, or product hereinafter referred to as “invention”, which I conceive and/or reduce to practice while employed by the Institute, or during the course of my utilization of any Institute research facilities, shall be examined by the Institute to determine rights and equities therein in accordance with the Institute’s Patent and Copyright Policy.

It appeared that the jury interpreted the contractual term “conceive” as a solo activity, while patent law allows for joint conception. The appeal focused on whether the jury should have been informed of law of inventorship and conception as it relates to patent law.

On appeal, the 9^th Circuit first agreed that California law requires agreements regarding patent rights be interpreted according to standard contract law and are not generally bound by the limits of patent law. In this case, however, the appellate panel found that the patent laws should be applied in this case when interpreting the contract language. This case may well be unique because the contract specifically noted that patent law principles “shall be taken into consideration.”

Consequently, the court held that the jury should have been properly informed of the law of conception — especially as it relates to joint inventorship.  “[W]e conclude that it was clear error for the district court … exclude the co-inventorship language.”

Notes:

• Read the decision [LINK].
• Comment by Professor Mark Patterson: “The L.A. Biomed. case seems to me uncontroversial as a matter of contract law.  I would view it as saying that trade usage regarding patent law terms should be used to interpret contracts, just as trade usage is typically used in contract law.  And then the Federal Circuit's decisions will be evidence of -- indeed, an authoritative source of what is or will become -- trade usage.  So I would say that the court is not so much applying Federal Circuit law directly as using it as evidence of trade usage.  I don't anything in the opinion is inconsistent with that.”

Patently-O Bits and Bytes No. 46: Supreme Court Edition

• In re Nuijten: The applicant has filed a petition for certiorari to overturn the Federal Circuit’s decision that a man made signal is not patentable.  Professor Duffy filed a ‘law professor’ amicus supporting the position which I signed. We argue that the CAFCs Nuijten decision improperly creates a new subject matter exclusion of transitory inventions that cannot be perceived without special equipment.  The AIPLA also filed a brief asking the Supreme Court to hear the case. [Law Professor Brief][AiplaNuijten (119 KB)]. Judge Linn’s dissent in the Nuijten decision may well serve as an additional amicus.
• Biomedical Patent Management v. California: This case challenges California’s claims to 11th Amendment Soveriegnty based in part on the state’s increased involvement in the business of patenting and commercialization. The Supreme Court is awaiting views from the US Solicitor General on whether the US recommends grant of certiorari.   
• Translogic v. Dudas: In this case, Translogic asks the Supreme Court to invalidate a BPAI opinion based on the unconstitutional appointment of BPAI judges. In a recent study, I showed that 83% of recent BPAI decisions included at least one judge appointed by the PTO Director rather than the constitutional required “head of department.”  Translogic has several procedural hurdles.
• Calmar v. Arminak: The design patent holder asked the Supreme Court to reverse the Federal Circuit’s application of the “ordinary observer” test that improperly excludes the most natural ordinary observer – a retail customer. On June 9, the Supreme Court Denied certiorari.

Limiting the number of claims construed

Hearing Components v. Shure (E.D.Tex. 2008)

Prior to the Markman hearing, the parties jointly requested a page length exception for their briefs.  The problem, they argued, was that the three hearing aid patents in suit included a large number of disputed claims.

In a recent order, Eastern District of Texas Judge Clark denied that request and further ordered that “the parties shall elect no more than ten (10) disputed claim terms for construction … [based on] no more than three (3) representative claims from each patent for claim construction and trial.”

Judge Clark justified the limitation based on his duty to ensure a “just, speedy, and inexpensive determination of every action and proceeding.”  However, the decision opens the door for appeal for either party based on the Federal Circuit’s April 2008 decision in O2 Micro. In that case, the court held that it is the court’s duty to resolve claim construction disputes:

“When the parties raise an actual dispute regarding the proper scope of these claims, the court, not the jury, must resolve that dispute. . . . When the parties present a fundamental dispute regarding the scope of a claim term, it is the court’s duty to resolve it.” 

The resolution will be a middle ground that allows courts to control the trial process but gives litigants the right to have their disputes resolved. Perhaps the solution is to require some threshold explanation as to why each additional term needs to be construed.

• Read O2 Micro
• Read Judge Clark's Order
• See E.D.Tex Blog
• Hearing Components, Inc v. Shure, Inc (9-07-cv-00104) TXED

 

Tags: EDTX

Tax Patent Legislation: Excusing Infringement of Patented Tax Planning Methods

Rep. Rick Boucher's Bill to excuse infringement of patents covering tax planning methods now has 40 co-sponsors. However, its prospects for becoming law are still slim – only one of the co-sponsors is a member of the House IP Subcommittee which must approve the bill.

The proposal copies the language of the "medical practitioner's performance of a medical activity" exclusion found under 35 USC 287(c). (Known as the Ganske compromise).  Under the proposed bill, unauthorized use of a patented tax planning method by a taxpayer or tax practitioner would not be considered infringement.

"With respect to the use by a taxpayer or a tax practitioner of a tax planning method that constitutes an infringement under subsection (a) or (b) of section 271, the provisions of sections 281, 283, 284, and 285 shall not apply against the taxpayer, the tax practitioner, or any related professional organization with respect to such tax planning method."

A tax planning method is defined as any "plan, strategy, technique, or structure that is designed to reduce, minimize, or defer, or has, when implemented, the effect of reducing, minimizing or deferring, a taxpayer's tax liability." The proposal is careful to exclude "tax preparation software or other tools used solely to perform or model mathematical calculations or prepare tax or information returns."  This language is potentially too loose — as most tax software does much more than perform math and prepare the return.

H. R. 2365

Patently-O Bits and Bytes No. 45 – Confidential Court Documents

• Prior Art Blog updates us on Orion IP's battle against online automobile retailers. [Spangenberg must pay $3.8 million in legal fees]
• Mullin – operator of the Prior Art Blog – may agree with the outcome of the case, but faults W.D.Wisc. Judge Crabb for keeping nearly every filed document under seal. "For three months now [Judge] Crabb has operated a secret, closed court; I've read through hundreds of patent dockets and I've never seen anything like it." [Updated June 20]
• A recent study by Federal Judicial Center researcher Robert Reagan found that settlements of patent litigation are five-times more likely to be kept sealed than are settlements in other civil cases. Robert Reagan, The Hunt for Sealed Settlement Agreements, 81 Chi.-Kent L. Rev. 439 (2006).
• Stanford v. Motorola (Fed. Cir. 2008)(Non-Precedential) ("we conclude that we cannot review the district court's order without an explanation of the basis of the court's decision.").

Inequitable Conduct Based on Petition to Make Special

Scanner Technologies Corp. v. ICOS Vision Systems (Fed. Cir. 2008)

There are many companies that value quick prosecution and issuance. Yet, few have taken the PTO's offer of accelerated examination (AE). Potential applicants avoid the accelerated examination program for several reasons – most of which are associated with the AE requirements to (i) search for prior art; (ii) identify all claimed elements found in each relevant reference; and additionally (iii) prepare an explanation of why the claims are patentable over the references. These AE requirements are costly and potentially open the applicant to charges of inequitable conduct (as well as narrow claim scope).

In this case, Scanner saw ICOS products at a trade show and subsequently filed a petition to make special in the hopes that its patent would issue more quickly. The petition argued that the petition should be granted based on ICOS products. The petition was granted and the patent issued within the year.

After Scanner sued for infringement, the district court found the patent unenforceable due to inequitable conduct in filing the petition to make special. On appeal, the CAFC reversed – but in the process revived aspects of the inequitable conduct inquiry. The particular conduct at issue included statements in the petition that infringement was clear even though the accused product had not been fully inspected.

Broad Concept of Materiality: Although inequitable conduct issues often focus on whether the misconduct was "material to patentability." The CAFC began by quoting its own 1994 GE v. Samick opinions holding that a false statement in a petition to make special should be considered "material" if "it succeeds in prompting expedited consideration of the application." This broad consideration of materiality follows the Nilssen decision holding that misrepresenting an applicant's status as a small entity (in the payment of post issuance maintenance fees) may also be considered material.

"[W]e must reject Scanner's view that inequitable conduct cannot be shown absent a misrepresentation that bears on the patentability of the claims in the application. When the setting involves a petition to make special, as is the case here, we reaffirm that a false statement that succeeds in expediting the application is, as a matter of law, material for purposes of assessing the issue of inequitable conduct."

Reasonable Inferences Favor Patentee: Although the CAFC agreed that the type of conduct here could be inequitable conduct, this case did not present sufficient evidence. Because materiality and intent must both be proven with clear and convincing evidence, the appellate panel requires that all reasonable inferences be given weight:

"Whenever evidence proffered to show either materiality or intent is susceptible of multiple reasonable inferences, a district court clearly errs in overlooking one inference in favor of another equally reasonable inference."

Because the CAFC found potential reasonable explanations for the claims of infringement, it held that those statements could not be considered false or misleading, and thus not material.

By clearing the inequitable conduct charges, Scanner avoids paying ICOS attorney fees. However, the CAFC affirmed that all claims of the patents were invalid and not infringed.

Notes:

• Interesting statement: "We also affirm the district court's judgment invalidating all claims of the patents in suit given the stipulation between the parties that the case would be tried on a representative claim."

Tags: Accelerated+Examination, Petition+to+make+special

CAFC Vacates Validity Holding Based on Agreement by the Parties [UPDATED 2:00pm]

Baychar v. Salomon North America (Fed. Cir. 2008)

As part of a settlement process, parties regularly agree to 'consent decrees' that include admissions that the patent is valid and/or infringed. When signed by a court, those judgments serve important purposes in later direct challenges via res judicata or collateral estoppel. A consent decree may also serve as evidence or a deterrent against other challengers.  It is rare, however, for the Federal Circuit to sign a consent decree on appeal.

Baychar sued Solomon for infringement of its snowboard boot liner patent that apparently teaches a better way for wicking moisture. The district court found the patent (1) not infringed based on an implied license and (2) invalid.  By the time of oral arguments on appeal, the parties had apparently come to an agreement that Baychar would waive its infringement argument if the court would vacate the invalidity finding.  In a short non-precedential opinion, the appellate panel (Judges Mayer, Plager, and Dyk) did just that: affirming that the patent was infringed based on an implied license while vacating the judgment of invalidity.

The business issue here is that Baychar has asserted its patent against multiple defendants, and the invalidity finding would have ruined its chances of success across the board. It was willing to admit defeat in this case as a way to save the patent for another fight.

Notes:

• In its opinion, the CAFC noted that the issue of infringement will be resolved by the appellate court rather soon in Baychar v. Burton.

In a prior opinion in the Salomon case, the CAFC dismissed Baychar's appeal on a procedural issue — its notice of appeal was filed five days late. Federal Circuit rules require a notice of appeal of a patent case be filed within 30 days from the final judgment. [Link] Apparently, the district court issued a second final judgment giving Baychar the opportunity to appeal again.

Prison: The last stand for land line phones.

TIP Systems v. Phillips & Brooks (PBG) (Fed. Cir. 2008)

"This is a patent infringement case pertaining to wall-mounted telephones designed for use by prison inmates."  Both the accused device and the patents focus on a telephone system that operates without the dangers of a phone cord. However, the TIP patents require a "handset" mounted in the wall of the phone box with a mouthpiece that "extends through" the wall.  These claims are exemplified in the figures.

The accused devices do not use a traditional handset, but rather use a separate ear-piece and mouthpiece. In addition, the accused device wall is flush – and the mouthpiece does not break through the wall.

Questionable claims of infringement are naturally resolved by a Markman hearing and subsequent summary judgment of noninfringement. Here, the district court found (i) that the claimed handset must include a handle with both an ear-piece and mouthpiece and (ii) that the mouthpiece must pass through an aperture in the front wall of the phone box.  It was clear that the accused device did not exhibit either of these features and thus could not infringe.

The definition of the handset was made easy because the claims stated that: "a telephone handset being a handle with an ear-piece at one end and a mouthpiece at an opposite end." The exact definition is support from the figures is also provided in the specification.

The CAFC affirmed on claim construction then went on to consider whether the elements may still be covered under the doctrine of equivalents (DOE). 

If an element is not literally covered by a claim, the device may still be considered infringing if the accused element is equivalent to the claimed element. Thus, to infringe a patent, each claim element or its equivalent must be found in an accused device.

Whether equivalency exists may be determined based on the "insubstantial differences" test or based on the "triple identity" test, namely, whether the element of the accused device "performs substantially the same function in substantially the same way to obtain the same result." 

The game in the doctrine of equivalents is defining an 'element.'  The patentee wants a broad definition (the telephones as a whole are very similar) while the defendant argues for a narrow definition. Here, the defendants won when the courts found that a "handle" is an element of the claim.  Since the accused devices have no structure that is similar to a handle, they cannot infringe even as an equivalent.

  

Deciding Infringement During Claim Construction

ADC Telecommunications v. Switchcraft (Fed. Cir. 2008)(nonprecedential)

Patent law precedent requires a judge to interpret any disputed claims of a patent prior to sending the case to a jury to determine factual issues of infringement. 

“First, the court determines the scope and meaning of the patent claims asserted. . . . [Second,] the properly construed claims are compared to the allegedly infringing device.” Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc) (citations omitted).

There is a strong tendency, however, to push the judge toward deciding the infringement issue within a Markman hearing — leading to a potentially quick summary judgment conclusion. Thus, parties often ask the judge to determine whether or not claimed element “X” should be interpreted to cover “Y” - where Y is an element of the accused product.

This infringement litigation involves a patent covering a coaxial switch that includes a mechanism for impedance matching.  Dueling experts used different testing mechanisms to prove (non)infringement of the accused device. Hoping to short-circuit the infringement determination, the defendant argued that that proper construction of the claims require a its method for testing for infringement. The CAFC disagreed because the claims lacked any textual hook for requiring a particular testing method and because the specification lacked “any clear indication” of a particular test. Relying upon its 2005 Union Carbide decision, the court found that “[b]ecause the claim language does not require a particular form of testing, this inquiry is not a claim construction question, which this court reviews de novo. Rather, this court reviews this inquiry as a question of fact.”

Thus, the CAFC affirmed the lower court’s decision and ruling that the “dispute over the proper testing method is … a factual question that the district court properly submitted to the jury.”

CAFC Reverses After Lower Court Denies Patentee the Opportunity to Present a New Infringement Argument on Remand

Central Admixture Pharmacy Services v. Advanced Cardiac Solutions (Fed. Cir. 2008) (Non-precedential)

Most non-precedential opinions affirm the lower court. In fact, this decision is the first non-precedential reversal of 2008 (according to a Lexis search). In the prior decision, the CAFC voided a certificate of correction that had attempted to change a claim limitation from osmolarity to osmolality.

The final line of the original opinion reads as follows: “On remand, CAPS [the patentee] may pursue its allegations of infringement of the uncorrected ‘osmolarity’ version of the ’515 patent claims.” However, after the remand the district court refused to allow CAPS to prove infringement based on the uncorrected version of the patent.  Its reasoning was that CAPS had previously stated that it would not pursue that theory of infringement.

On appeal the second time, the CAFC reversed and remanded — holding that its prior order was “clear: on remand, the district court was to decide the merits of CAPS’s infringement claim under the pre-[Certificate of Correction] claims.  The district court was not at liberty to ‘determine’ the issue on procedural grounds, as it did.”

Reversed and remanded for consideration of the patentee’s infringement arguments.

Notes:

• This panel included Judges Schall, Clevenger, and Gajarsa. 
• The original panel included Judges Schall, Gajarsa, and Prost. Opinion by Gajarsa [LINK]
• The patent at issue (No. 4,988,515) covers a solution of glucose and amino acids used to nourish heart tissue during open heart surgery when blood flow is stopped.
• This decision appears quite limited. The patentee is able to present its new infringement argument because the original CAFC opinion specifically ordered the court to allow the new argument. This decision does not require a reversed lower court to allow a party to present arguments that had previously been dropped.

CAFC Affirms Exceptional Case Attorney Fees Based on Multiplicity of Minor Acts of Misconduct

Nilssen v. Osram Sylvania (Fed. Cir. 2008)

In 2007, a unanimous CAFC panel affirmed a district court’s finding that Ole Nilssen’s light bulb patents were unenforceable due to inequitable conduct.  The improper prosecution conduct included failing to disclose a close relationship with a 132 declarant; misleading priority claims; and improper payment of a small entity fee.

Now on appeal is whether Nilssen owes attorney fees under 35 U.S.C. § 285.  As with most civil cases in the US, the general rule in patent cases is that each party pays their own attorney fees.  Section 285 of the patent act provides a limited exception — providing that a district court “in exceptional cases may award reasonable attorney fees to the prevailing party.”  Here, the district court found the case exceptional based on the aforementioned inequitable conduct as well as “litigation misconduct” and the filing of a “frivolous lawsuit.” 

Benign Inequitable Conduct: Nilssen argued that his alleged inequitable conduct had very little real impact — i.e., that it was benign.  The CAFC rejected that argument — finding that inequitable conduct is never benign. “In fact, it is a contradiction to call inequitable conduct benign.”

Building a Mountain from Pebbles: Nilssen makes a good argument that none his individual acts of misconduct appear bad enough to call the case ‘exceptional.’ 

These acts of misconduct include late production of documents, disavowal of a prior interrogatory response (and never filing a formal correction), attempting to exclude interrogatories that were never signed; informally withdrawing patents from suit, but waiting until only a few months before trial to formally withdraw the patents; and waiving attorney client privilege without providing formal notice to Osram.

Each of these actions can rather easily be explained as “either harmless oversight or permissibly rough litigation tactics.”  This is perhaps especially true when you consider that the K&E firm – well known for its relentless bull dog litigation style — represented Osram.

To the CAFC panel, however, the “multiplicity” of these individual elements were sufficient to warrant the exceptional case finding — even without an individual smoking gun.

In dissent, Judge Newman did not see an exceptional case:

The statutory authority to award attorney fees was intended to “prevent gross injustice,” not to shift the economic balance against the unsuccessful plaintiff.

Notes:

• The first line of the case reads: “Nilssen is the owner and principal inventor of over 200 patents...”  What does the court mean by “principal inventor” and is there any legal significance associated with that designation?
  

 

 

Patently-O Bits and Bytes No. 44: Deferred Examination

• Deferred Examination I: For the current state of PTO backlog, I am a strong believer in providing a mechanism to either (i) allowing the inventor pay to move to the front of the examination line if the patent needs to be obtained quickly or (ii) allowing the inventor to delay prosecution if it is unclear whether the invented technology will have any market value. There are some potential negative issues of allowing deferred prosecution — particularly the potential for submarining and shifting claim scope to encompass market changes. These problems would largely be limited through early publication of deferred applications as well as continued enforcement of the written description and enablement requirements.  In addition, the patent term should continue to run during deferment.
• Deferred Examination II: In its response to congressional queries, PTO Director Jon Dudas has come-out in favor of a system that allows for deferred examination. The PTO's tentatively proposed implementation scheme would move along a three-step process:
  • Allow a 14–month extendible period for responding to a notice to file missing parts.
  • Use a tiered payment structure that allows for delayed payment of the examination fee.
  • Empower Provisional Applications: Allow applicant to claim priority to a provisional application for up to five years.
• Deferred Examination III: For many, including the PTO, the hope with deferred examination is that "many inventions … would be recognized as obsolete [or otherwise worthless] before expiration of the five year period and therefore would not require examination resources."
• Rocket Docket Examination: In the past, the AIPLA and others have argued against having a rocket-docket examination based simply on the payment of a fee. Their argument is that it is somehow inequitable and un-American to line-jump based on the availability of funds. That argument is largely hog-wash.  Many of the richest companies in the US maintain tight controls over patent prosecution costs. I suspect those companies would only rarely pay an additional $5,000 in PTO fees for rapid examination. (If a rocket docket for patent prosecution is created, the fee should be high enough to ensure that it does not simply create an additional bottleneck.)
• Clear Channel Communications now owes $90 million to Grantley Patent Holdings. The Eastern District of Texas jury found the patent willfully infringed with damages of $66 million. Last week, the Judge awarded an additional $16 million in enhanced damages in addition to prejudgment interest and interim royalties due.

Two Hong Kong companies have been fighting over a coffee maker design patent.  Simatelex (who manufacturers for Sunbeam) has signed a consent decree admitting contributory infringement. The patentee's case against Sunbeam is still pending in the Southern District of New York. Wing Shing v. Simatelex.

District Court Must Provide Underlying Reasoning For "Exceptional Case" Determination

Innovation Technologies v. Splash! Medical Devices (Fed. Cir. 2008)

Innovation holds a patent for washing flesh wounds (U.S. Pat. No. 5,830,197) and sued Splash for infringement. In the midst of discovery (but before a Markman hearing) Innovation decided to end the litigation and executed a covenant not to sue Splash. Before dismissing the case, the district court awarded $140k in attorney fees to the accused infringer — finding the case “exceptional” because Innovation knew or should have known “that its infringement claims were baseless.”  Innovation left the district court with the impression that “the lawsuit was filed solely for the purpose of harassing a small competitor.”

In its decision, the district court provided only three sentences of legal conclusion without listing the factual basis for finding the case exceptional. [District Court Decision]

On appeal, the CAFC vacated in an opinion that reads like a reprimand. Quoting extensively from earlier opinions, the appellate panel demanded that lower court spell out the particular reasons why a case should be found exceptional:

‘“A district court must provide reasoning for its determination that a case is exceptional for us to provide meaningful review. Further, an exceptional case finding is not to be based on speculation or conjecture but upon clear and convincing evidence.” Stephens v. Tech Int’l, Inc., 393 F.3d 1269, 1276 (Fed. Cir. 2004) (citations omitted). . . .

This court could itself comb the record and answer those questions. That is not the normal appellate function, however, and we conclude that the proper practice here is for the district court initially to make the necessary findings on these issues. “[W]hen findings are required on the exceptional case issue such finding must initially be the province of the district court.” Consol. Aluminum Corp., v. Foseco Int’l Ltd., 910 F.2d 804, 814 (Fed. Cir. 1990). . .

Accordingly, the district court’s determination that this is an exceptional case and its award of attorneys fees are vacated, and the case is remanded to that court to make additional findings in accordance with this opinion. . . . If the court again concludes that this is an exceptional case and that it should award attorneys fees, it should also explain the reasons for the latter conclusion.

Vacated and Remanded.

Patently-O Bits and Bytes No. 43

• Obviousness Essays: Lewis & Clark has published results from its Obviousness symposium. [LINK] Papers include Duffy's thoughts that the timing of an invention helps determine its obviousness; Mandel's argument that KSR stinks because it does not truly account for hindsight bias; Eisenberg's predictive analysis of KSR's impact on pharmaceutical patent protection; and Miller's suggestion on how courts should determine PHOSITA's skill level.
• Prior Art blog discusses Little League Trademark Infringement. [LINK]
• Director Dudas Responds to Congressional Critics [File Attachment: dudas.ltr.pdf (2048 KB)]

Obvious to Try? BIO Challenges Ex Parte Kubin

In re Kubin (Fed. Cir. 2008)

Immunex (a subsidiary of Amgen) is hoping to patent its a DNA sequence coding for a NK (Natural Killer) cell regulator protein. The BPAI rejected the “nucleic acid molecule” claim — finding it obvious over the prior art. [BPAI Decision]. This decision is one of only three precedential BPAI decisions in 2007.

Just looking at the claimed sequence, it would not seem obvious — its structure is not overly similar to other regulator proteins, and the unpredictable nature of protein folding makes it virtually impossible to predict whether a particular sequence would code for an appropriate protein.

Despite the structural uniqueness, the BPAI found the claim obvious because it could have been isolated and verified simply by following conventional laboratory techniques — thus, making it obvious to try.

Although the CAFC has previously warned the BPAI away from using “obvious to try” analysis in its 1995 In re Deuel case. There, the appellate court held that obviousness analysis of a structure should focus on the structure itself as compared to prior art structures.

In Kubin, the BPAI rejected Deuel as limited by the Supreme Court’s KSR decision. That case focused on combination claims, but included the stray quote that “the fact that a combination was obvious to try might show that it was obvious under Section 103.”

Here, the BPAI argued, the inventor wanted to isolate the NK Regulator and simply used known methods to do so. “Thus, isolating NAIL cDNA was ‘the product not of innovation but of ordinary skill and common sense.’” (again quoting KSR).

The case is now on appeal at the the CAFC. On June 10, the Biotechnology Industry Organization filed an amicus brief asking the court to cabin in the scope of KSR and hold that its obvious to try dicta does not abrogate the Deuel standard. Briefing is ongoing and a decision is not expected until the end of the year.

• Download kubin.amicus.pdf
• The PTO's Obviousness Guidelines have the following rules for making an obviousness rejection based on the obvious to try reasoning:
  • (1) a finding that at the time of the invention, there had been a recognized problem or need in the art, which may include a design need or market pressure to solve a problem;
  • (2) a finding that there had been a finite number of identified, predictable potential solutions to the recognized need or problem;
  • (3) a finding that one of ordinary skill in the art could have pursued the known potential solutions with a reasonable expectation of success; and
  • (4) whatever additional findings based on the Graham factual inquiries may be necessary, in view of the facts of the case under consideration, to explain a conclusion of obviousness.The BPAI decision is notable for a few reasons, including the following two: (1) It was written by Nancy Linck, former PTO Solicitor, Newman law clerk, & PhD Chemist. Soon after authoring the decision, Linck left the firm to join the Rothwell Figg firm. (2) It is a unanimous opinion.
• Thanks to Hal Wegner for providing a copy of the brief which his firm filed on behalf of BIO.

PTO Implements Final BPAI Appeal Rules

The PTO has announced implementation of “final rules” that govern the procedure of ex parte appeals before the PTO’s Board of Patent Appeals and Interferences (BPAI).  A year ago, I commented on the rise of of “technical rejections” of appeal filings. Most of these involved issues such as failing to list non-appealed claims; failing to include an appendix page (even if you have no appendix); and the use of a section headings that varied (in form but not substance) from the required heading. In my 2007 sample of 720 appeals, I found that a full 25% had been rejected as ‘defective’ based on these formalities. [Link]

With this large number of defective briefs in mind, the BPAI developed the new rules:

A major objective of the amended rules is to avoid unnecessary returns to examiners by the Appeals Center and the Board, along with the resulting delays in application and appeal pendency. The requirements of the amended rules are believed to be more objective and, therefore, both appellants and examiners will have a better understanding of what is required, thereby minimizing, if not eliminating, a need to hold appeal briefs defective.

In reality, the new rules appear to significantly increase the number of formalities.  This increase in formalities will likely increase the time required to prepare an appeal. The new rules apply to all appeals in which an appeal brief is filed on or after December 10, 2008.

Some changes:

1. The most substantive change may be the requirement that non-appealable errors must be resolved by petition prior to filing an appeal to the BPAI. “Failure to timely file a petition seeking review of a decision of the examiner related to a non-appealable issue would generally constitute a waiver to have those issues considered.”
2. Instead of filing a summary of the invention, the applicant must file “a claims analysis.” This analysis is essentially a claim chart indicating “the page and line or paragraph after each limitation where the limitation is described in the specification as filed.”
3. 30 page limit for the Grounds of Rejection, Statement of Facts, and Arguments. (14 point font).
4. A complete appeal brief will include each of the following (in the correct order):
• Statement of the real party in interest,
• statement of related cases,
• jurisdictional statement,
• table of contents,
• table of authorities,
• [reserved],
• status of amendments,
• grounds of rejection to be reviewed,
• statement of facts,
• argument, and
• an appendix containing (a) claims section, (b) claim support and drawing analysis section, (c) means or step plus function analysis section, (d) evidence section, and (e) related cases section.
5. new grounds of rejection are no longer permitted in an examiner’s answer,
   the examiner’s response to a reply brief is eliminated,
6. petitions to exceed the page limit for an appeal brief, reply brief or request for rehearing are made under Rule 41.3 which requires a $400 fee,
7. petitions for an extension of time to file a reply brief, request for oral hearing, or request for rehearing are made under Rule 41.3 which requires a $400 fee, and
8. a list of technical terms or unusual words to be provided to the transcriber at the oral hearing.

Appeal Rules PDF

BPAI Administrative Patent Judges

There continues to be interest in the BPAI appointments problem identified by Professor John Duffy. The solution going forward is quite simple — change the law so that BPAI administrative patent judges will be appointed by the Secretary of Commerce then re-appoint the current judges.  No one is arguing that the BPAI judges are incompetent or lack qualifications for their position — only that they have been appointed in a way that runs contrary to the Constitution.  This issue may not come to a head until demanded by a court of law. The Translogic petition for certiorari is one avenue, although many more will follow until a clear resolution is reached. 

In 2000, the BPAI judge appointment law changed to require the PTO director to appoint the administrative patent judges rather than the Secretary of Commerce. Through a FOIA request, Wendy Gombert and Joel Ard from the Black Lowe firm recently obtained a listing of the 47 BPAI judges who have been appointed since the law was amended. [THE LIST].

To get some sense of the impact of these judges, I looked at the 2500+ BPAI decisions between March 2007 and March 2008 and found most of those decisions (83%) included at least one panel member that had been illegally appointed under the Duffy construction. A significant number of panels (44%) included a majority of illegally appointed judges, and about half of the opinions were authored by illegally appointed judges. By technology center, applications classified in TC1700 (Chemical and Material Engineering) had the fewest opinions drafted by the illegal appointees while TC1600 (Biochemistry and Organic Chemistry) had the most. This difference is likely primarily due to the core group of veteran TC1700 judges.

Notes:

• 35 USC 6
• Translogic Tech. v. Dudas (on petition for certiorari 2008)
• Patently-O Patent Law Journal article
• Duffy on NPR: http://www.npr.org/templates/story/story.php?storyId=90245762.

Formalism at the CAFC: Equitable Plea for Revival is Rejected

Burandt v. Dudas (Fed. Cir. 2008)

Burandt’s patent expired in 1994 for failure to pay the maintenance fee. His former employer held legal title to the patent — although Bruandt arguably held an equitable interest in the title.  At that time, Bruandt was also mentally disabled. It was not until December 2001 (seven years later) that Bruandt learned of the expiration.

Burandt took several years to obtain legal title to the patent and then file a petition asking the PTO to accept an unavoidably delayed payment of the maintenance fee. (37 C.F.R. 1.378(b)). The PTO rejected his plea as did the U.S. District Court. Burandt argues that the PTO’s refusal to revive the patent was “arbitrary, capricicious, [and] an abuse of discretion” and consequently, a violation of the Administrative Procedures Act (APA). 

On appeal, the CAFC panel sided with the PTO — finding that the Patent Act (Section 41(c)(1)) gives the PTO director discretion to accept late maintenance fees “if the delay is shown to the satisfaction of the Director to have been unavoidable.”

“While it may well have been the intent of Congress to permit patentees to avoid the inequitable loss of patent rights, Congress gave the Director the responsibility of determining the circumstances under which a late payment may be waived.”

In this caes, Burandt’s former employer – as legal title holder – was responsible for taking reasonable care to pay the maintenance fees. Here, the court distinquished between the legal title holder and an equitable title holder:

“[I]t is the actions of the party responsible for making payments of the maintenance fees, the legal title owner, that must be considered when evaluating unavoidable delay under 35 U.S.C. § 41(c).”

In the court’s view, the legal owner is the “owner of record.” Thus, because the former employer was still “the owner of record [it had] the legal responsibility of paying the maintenance fees.”

In the somewhat similar case of Futures Technology v. Quigg (E.D.Va 1988), the district court allowed an equitable title holder to revive an application that had been abandoned by the owner of record. The CAFC formally distinguished this case as (1) not binding precedent and (2) dealing with a pending application rather than an issued patent. In addition, the court noted that in Futures Technology, the equitable title holder had asked the owner of record about the patent application on a more regular basis and the legal title holder had made misrepresentations to the equitable owner.

Expired patent remains expired.

Notes:

• Hunton & Williams apparently handled the case pro bono on Burandt’s behalf.

Appellate Court Affirms that Generic Omeprazole does not Infringe Prilosec Patent

IN RE OMEPRAZOLE PATENT LITIGATION (Fed. Cir. 2008) (nonprecedential)

Omeprazole is the active ingredient in the best-selling drug Prilosec. Mylan and others challenged Astrazeneca’s patents on grounds that their generic formulations do not infringe two Astra’s listed patents. “After a forty-two day bench trial,” a Southern District of New York district court agreed that the generic formulation do not infringe. On appeal was the question of whether the generic versions contained an “alkaline reacting compound” (ARC) as required by the claims.

Using the Specification as Proof of Non-Infringement: Astra argued that the talc used by the generic products included an ARC.  The CAFC agreed that the lower court had properly rejected that argument based in part on language in the specification. Specifically, the nearly identical specifications listed several different ARCs but did not include talc on the list.  “In contrast, the specifications also lists a number of ordinary excipients, among which is talc. . . Thus, the specifications themselves indicate that ARCs do not include talc.”

Defying conventional wisdom at the time, Mylan launched its generic version of Omeprazole in 2003 — despite ongoing patent litigation.

Non-infringement affirmed.

Supreme Court Decides Quanta v. LG Electronics, __ U.S. __ (2008),

Quanta v. LG Electronics, __ U.S. __ (2008)

Justice Thomas delivered the Supreme Court’s 19–page unanimous decision that provides some new life to the doctrine of patent exhaustion.  The opinion reverses the Federal Circuit and holds that under the exhaustion doctrine applies to the authorized sale of components that “substantially embody” a process patent. Here, Intel’s authorized sale of chip components to Quanta exhausted LGE’s patent rights. 

Buried in this statement are two important holdings: (1) method claims can be subject to exhaustion and (2) sales of products that that do not fully practice the invention can still trigger exhaustion when the products include essential features of the patent and the “reasonable and intended use” of the product is to practice to patent. 

In coming to its conclusions, the court reiterated its longstanding rule that “the right to vend is exhausted by a single, unconditional sale, the article sold being thereby carried outside the monopoly of the patent law and rendered free of every restriction which the vendor may attempt to put upon it.” Motion Picture Patents, 243 U. S. 502 (1917).  The Motion Picture decision is more nuanced than the even older statement from Adams, which the opinion also quotes approvingly: “[W]hen a patented item is ‘once lawfully made and sold, there is no restriction on [its] use to be implied for the benefit of the patentee.’” Quoting Adams v. Burke (1873).

Contractual Limits: Although the defendant won in this case, the Supreme Court gave some glimmer of hope to those hoping to limit the scope of patent exhaustion through specific licensing terms. In this case, the court found that the LGE-Intel license did not limit the scope of what Intel could sell.  Rather, the contract “broadly permits Intel to ‘make, use, [or] sell’” the invention. Under that interpretation of the contract, LGE’s patent rights over a particular component are extinguished as soon as that component is sold – regardless of whether the license included post-sale restrictions.  

“LGE points out that the License Agreement specifically disclaimed any license to third parties to practice the patents by combining licensed products with other components. But the question whether third parties received implied licenses is irrelevant because Quanta asserts its right to practice the patents based not on implied license but on exhaustion. And exhaustion turns only on Intel’s own license to sell products practicing the LGE Patents.”

The practical impact is that the patentee has direct power through only the first level of the production/marketing process and forces the patentee to rely on contract rather than patent rules. This shift is less preferred by patentees because (1) contract law requires agreement and privity and (2) patent law typically results in stronger relief than contracts (despite eBay).  Because there is usually a lack of privity with downstream users, and the manufacturer is unlikely to agree to be liable for improper downstream uses, it appears that a patentee will now have even more difficulty controling downstream users and purchasers.

Authorized: Despite the broad language of Adam v. Burke, the Supreme Court appears to have conceded that a license may include some restrictions.  Interestingly, the court indicated, the sale might not have been authorized if sale had been done in a way that breached the contract between Intel and LGE.

“No conditions limited Intel’s authority to sell products substantially embodying the patents. Because Intel was authorized to sell its products to Quanta, the doctrine of patent exhaustion prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products”

In Footnote 7, the court limited its holding to patent exhaustion — and expressing “no opinion on whether contract damages might be available even though exhaustion operates to eliminate patent damages.”  This means that violation of use restrictions associated with an authorized sale will not constitute patent infringement. However, it may still constitute a breach of contract. The case says little to nothing about the growing tendency of providing products as a service rather than through the sale of goods.  Those offering the service believe that their business structure moves the deal outside of the “first sale” doctrine because the products are transferred via a license & service agreement rather than the sale of goods.

Notes:

• “The sale of a device that practices patent A does not, by virtue of practicing patent A, exhaust patent B. But if the device practices patent A while substantially embodying patent B, its relationship to patent A does not prevent exhaustion of patent B.”

Certificate of Correction

According to PTO figures, the Office has issued around 25,000 certificates of correction on issued patents each year since 2001. On a per patent basis, about 15% of issued patents are associated with a certificate of correction.*

Generally, a certificate of correction can be used to correct a minor mistake such as a "clerical or typographical" error or other minor error. In Superior Fireplace, the court held that a certificate of correction that broadens the claim is only permissible when it is clear from the specification and prosecution history how to correct the error. Similarly, in Central Admixture Pharmacy the CAFC found that the correction from osmolarity to osmolality was void because the error “was not clearly evident to one of skill in the art and the result was to broaden the claims.” The relief for an improper certificate of correction is simply to cancel the certificate. 

Over the past several years, a number of automated and out-sourcing services have emerged to check against PTO printing errors and other typographical errors. What are the best services and best practices regarding corrections?

 

• * To account for the time delay in obtaining corrections, I looked at only patents numbered 6,000,000 – 7,000,000 for the per patent estimate.

Auto Parts Design

Ford Global Technologies v. ITC (Fed. Cir. 2008) (The F-150 ITC Case) (CURRENTLY ON APPEAL)

In 2007, the International Trade Commission (ITC) issued a final decision finding three Ford design patents invalid based on a prior public use. The patents relate to various parts of its F-150 truck design. Ford had asked the ITC to stop generic parts manufacturers from imports of the patented designs that were flowing in from Taiwan. In its decision, the ITC found seven of the design patents valid and infringed, but found that three of them were invalid.

Prior Public Use: The alleged prior public use in this case was an event where Ford selected 900 members of the public to attend in small groups and provide feedback on proposed car designs. At the event, security was "high," cameras were banned as were sketches. Thus, according to Ford, the attendees could not have truly disclosed the ornamental features of the patented design. The invitees were also paid – and thus, disclosure to those individuals should be presumptively be considered private (as would normal in house discussions with an employee). Ford also argues that the payment to attendees is clear evidence that this public use was not "commercial exploitation."

Almost no Scope: Many design patent holders run from the Federal Circuit's 1988 in re Mann decision announcing that "design patents have almost no scope. In the auto-parts industry, however, no scope is needed so long as the patented designs are identical to the marketed products. The generic part importers are "slavishly copying" Ford's original design -- thus infringement should be open-and-shut. (See discussion below).

Ford embraced the narrow scope of its design rights – arguing that there its controls over the feedback event of preventing cameras or drawings ensures that none of the attendees will be able to place the invention in the public domain. Notably, in a recorded post-show follow-up, attendees who were asked about the design could only describe it in general terms such as "beefy."

"The video evidence shows that the claimed ornamental features of the patents-in-suit were not in the public's possession. Without cameras or sketches - which were specifically prohibited - there was no way here that the claimed designs could have been disclosed to the public. Ford therefore did not "remov [e] inventions from the public domain which the public justifiably comes to believe are freely available." … In short, "beefy front end" and "a chopped top" do not describe or disclose the design inventions.

Is Point of Novelty Analysis Required?: In its counter-appeal, the Taiwanese manufacturers argue that infringement was improperly found because the ITC failed to perform the point-of-novelty test which, according to the defendants, is required even when the patented design is identically copied.

"[E]ven though the court compares two items through the eyes of the ordinary observer, it must nevertheless, to find infringement, attribute their similarity to the novelty which distinguishes the patented device from the prior art."' Lawman, 437 F.3d at 1386 (quoting Litton, 728 F.2d at 1444).

The defendants are correct that Lawman and Litton appear to require the point-of-novelty test in every case of infringement. That issue will likely be resolved in the upcoming en banc decision in Egyptian Goddess. In addition, the defendants argued that the design patents should be considered obvious under KSR v. Teleflex (2007). As in that case the claims appear to be composed of a set of elements all found in the prior art.

An amicus brief was filed supporting the generic manufacturers. However, I have not yet seen that brief. In addition, the ITC recently began investigating another design patent complaint filed by Ford against the same generic manufacturers. This new case involves repair parts for the 2005 Mustang redesign.

Note:

• A reader reminded to me to mention pending H.R. 5638 and the PTO’s town hall meeting next Monday to discuss design patent issues. (written comments due July 15). 
• Unlike the patent reform bill, H.R.5638 is a partisan Democrat sponsored bill that would primarily support the insurance industry and make automobile repair less expensive by excusing repair parts from patent infringement. The bill would amend 35 USC 271 by adding the following subsection:
• (j) It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States any article of manufacture that itself constitutes a component part of another article of manufacture, if the sole purpose of the component part is for the repair of the article of manufacture of which it is a part so as to restore its original appearance.

Patently-O Bits and Bytes No. 42: Two requests for help

• What is the best way to search for reexamination certificates? Are these available through the PTO site?
• Does anyone have a good process flowchart for a university tech-transfer operation?
• Thanks! dcrouch@patentlyo.com

Existence of Non-Asserted Claims Allows Court to Disregard Construction Canon Encouraging Coverage of Preferred Embodiment

Helmsderfer v. Bobrick Washroom Equipment (Fed. Cir. 2008)

John Helmsderfer sued Bobrick for infringement of its patent covering tamper-resistant diaper changing stations.  After a markman hearing, the Southern District of Ohio district court awarded the defendants summary judgment of non-infringement. Helmsderfer appeals on claim construction.

Partially Hidden from View: The claims include a top surface platform that is “partially hidden from view.” On appeal, the patentee argued that “partially hidden” could include “totally hidden.” The CAFC disagreed for two textual reasons:

1. The patent used “generally” in other portions of the claim but not for this element — providing evidence that the patentee was intentionally distinguishing between those two modifiers.
2. The patent used “at least” in other portions of the claim but not for this element — providing evidence that in this case the patentee did not intend to claim “at least partially.”

Quoting its own 2000 CAE Screenplates decision, the court reasoned that “[i]n the absence of evidence to the contrary, we must presume that the use of these different terms in the claims connotes different meanings.” Here, the court could find no evidence to find that partially should include totally.

Exclusion of preferred embodiment: The applicant did point that its preferred embodiment and also “every illustrated embodiment” would be excluded by the narrow definition of “partially hidden.”  The CAFC, however, rejected that such an exclusion creates any problem here. In particular, the court noted that it was analyzing only teh two claims (6–7) at issue in the case — “[O]ur construction of claims 6–7 leaves open the possibility that claims not at issue in this appeal encompass omitted embodiments. It is often the caes that different claims are directed to and cover different disclosed embodiments. The patentee chooses the language and accordingly the scope of his claims.” 

The appellate panel gave lip service to the precedential canon of avoiding claim interpretation that “excludes the preferred embodiment from the scope of the invention.”  However, in the end the court gave absolutely no weight to that “caution” in its claim interpretation.  Rather, the decision notes the distinction between the patent as a whole and the particular asserted claims.  In this case, the court noted that other claims are included in the patent and that those may be the ones that cover the preferred embodiment. 

This interpretation falls on the heels of the PSN Illinois v. Ivoclar Vivadent holding that sometimes unasserted or cancelled claims directed to a particular disclosed embodiment may actually serve as evidence that the scope of the asserted claims does not extend to that embodiment.  PSN Illinois – written by Judge Michel – applies the sensible notion that non-asserted or cancelled claims should be examined to determine if the preferred embodiment is found there. Helmsderfer extends that notion by creating an apparent presumption that – if non-asserted claims exist, then the court need not consider the rule of construction that encourages encompasing preferred embodiments.

Notes:

• Preferred Embodiment: Relation to Tafas v. Dudas: Although the patentee lost here, Judge Moore’s decision here creates some interesting support for the Tafas case – by holding that it is the patentee’s right to file alternative claims to cover various parts of the disclosed embodiment.
• Drafting Thoughts: Non-numeric range limitations – such as “partially” – have benefits and potential liabilities. When including a limitation of this type, you may do well to consider what prior art you are attempting to avoid — and consequently claim either “at least partially” or “at most partially.”

Patently-O Bits and Bytes No. 41 (False Marking, Etc.)

• Tracking Appeals: There is an interesting new patent litigation blog: Patent Appeal Tracker run by Kyle Fleming and Josh Ryland. They are providing a review of various pre-decision appeals.
• False Marking: Matthew Pequignot is again a plaintiff in a false marking action under 25 USC 292. He has now teamed with two plaintiffs firms and filed suit in the Eastern District of Texas against Gillette and its parent company P&G. The complaint specifies 683 counts of false marking and requests the maximum $500 per “offense.”  The falsity of the marking appears to be generally summarized as either (1) marking products with expired patent numbers and (2) marking products with patents whose scope do not cover the products.  On the second point, some of the counts allege that the defendants marked products with patents covering a method of manufacture when the product was not manufactured according to the patent. [LINK]
• False Marking Comment: There are three primary reasons to mark products with the associated patent number. (1) Legally, marking provides evidence of constructive knowledge that can increase a patentee’s damages. (2) Apart from the damage issue, the patent can also serve as at least a low-level deterrent to chill would be competitors.  It will at least cost several thousand dollars to hire a patent attorney to figure out if the patents are expired.  (3) Finally, the patent provides additional market credibility to customers (and perhaps investors). Continued listing of an expired patent would continue to benefit the manufacturer in the last two points — and consequently help the manufacturer maintain its market position. The key point of contention will be whether the listings were made “for the purpose of deceiving the public” as required by the statute.
• Moving Forward on False Marking: If this type of litigation continues to grow, in house counsel should consider creating a system for ensuring that expired and invalid patents are no longer marked on company products. A system — even if a bit leaky — will likely serve as a good defense against false marking charges because they provide evidence of a lack of intent to deceive the public.
• Patent Law Jobs:
• Patent Prosecution
• Patent Litigation
• Patent Agent 
• Licensing / Other Corporate

Ex Parte Reexamination Statistics I

Through its attorneys Microsoft requested ex parte reexamination almost thirty Avistar patents. In recent days, the PTO denied Microsoft’s request in 14 of those cases.

Standing alone, this denial does not appear to be big news — except for the fact that over 95% of requests for ex parte reexamination are granted. In FY 2003–07, for instance, the PTO reviewed 2389 requests for ex parte reexamination and only denied the request in 105 cases. (4.4%). (At this point, there is some possibility that the denials are procedural  as the documents are not yet available on PAIR).

To be granted, a reexamination request must present a “substantial new question of patentability” that affects at least one claim of a patent.  The request must be based on a prior art patent or publication.  Prior public use or sale are not admissible as evidence in an ex parte reexamination proceeding (although affidavits explaining the prior art publications is admissible).

In general, there has been a rise in requests for ex parte reexamination. As the chart below demonstrates, increase is entirely due to an increase in requests for reexamination that are filed by third parties.

• Statistics are from the USPTO Annual Report FY 2007 and other annual reports.
• Avistar News Story
• IPRIORI keeps ex parte reexamination data continually updated here [LINK]

Some Design Patents That Have Been Litigated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsidiary's Lost Profits Do Not Translate to Lost Profit Damages for Parent Patent Holder

Mars, Inc. v. Coin Acceptors, Inc. (CoinCo) (Fed. Cir. 2008)

Way back in 1990, Mars sued CoinCo for patent infringement — asserting two patents covering technology for authenticating coins inserted into a vending machine. Eighteen years later, the parties are still battling over damages.

Lost Profits: In this decision, the CAFC affirmed that the Mars corporate structure (designed to avoid certain taxes) eliminated the company’s ability to recover damages under a “lost profits” theory.  Usually, lost profits are only available when a patentee is a market competitor. Mars itself has never made vending machine coin changers. However, its wholly owned subsidiary, MEI, did operate vending machines and licensed the patents on a non-exclusive per-use basis.  Although it was a wholly owned subsidiary, the court found that MEI’s provable lost profits due to the CoinCo infringement did not translate to lost profits for the patentee itself (Mars).  Of particular importance was the license structure between MEI and Mars that called for a straight per use license rather than a license based on a measure of profits.  Rather, lost profits require a showing that the patent holder itself had lost profits.

This decision can be seen as a continuation of the 2004 Poly-America case where the court held that the patentee could not recover lost profits for damages felt by a sister corporation. Lost profits damages are usually preferred to damages calculated as a reasonable royalty because the lost profit calculation typically results in a larger number.

Standing: The court also ruled on standing issues. (1) Prior to 1996, MEI had no standing to sue for itself because it was only a non-exclusive licensee. (2) In 1996 Mars transferred ownership to MEI — thus, at that point Mars had no standing to sue for any subsequent infringement.

Curing standing: In patent cases, standing is typically determined at the point that a claim is filed. Here, we have a seeming loss of standing. In the 2005 Schreiber decision, the CAFC held that a “temporary loss of standing during patent litigation can be cured before judgment.” Despite a half-hearted attempt, the court found that Mars had not properly cured its standing because MEI did not transfer complete ownership back to Mars.

Cornell wins $184 Million in Damages for Past Infringement by HP

Federal Circuit Judge Randall Rader has been sitting by designation as a district court judge in the Northern District of New York.  His case is an epic patent battle between Cornell University and Hewlett-Packard (HP), and the jury trial recently concluded with an $184 million calculated as 0.8% of HP’s $23 Billion in sales.

The patent — No. 4,807,115 — issued in 1989 and expired during the seven years of litigation. It is directed toward an internal computer messaging mechanism that boosts the function of multi-processor computers.

Interestingly, Cornell and HP had discussed a licensing agreement as early as 1988 (even before the patent issued). In 1997, Intel licensed the ‘115 patent for use in its Pentium Pro chips.

Unpublished Thesis: In a pre-trial decision, Judge Rader denied Cornell’s motion in limine and allowed HP to show the jury an unpublished masters degree thesis as 102(b) prior art.  The court found the thesis publicly accessible because the thesis had been cited in a later article that was in the same area of technology as the issued patent (analogous art.).

“After weighing all the circumstances of accessibility, this court views as vitally important the citation of this scholarly work in the Tjaden-Flynn article.”

Inventor Rewards: Unlike most companies, universities generally offer a percentage royalty cut for its employee-inventors. Professor Torng, the inventor of the ‘115 patent, will reportedly receive 25% of the award (if it is ever paid). Torng has announced that he’ll only keep a few million and donate the rest (perhaps over $30 million) to charity.

The post-trial decisions and eventual appeal should be interesting.

• [Reuters][Patent Hawk]

Question on Provisionals?

1. When an issued utility patent claims priority to a provisional patent application, is there a presumption that the claimed invention is supported by the provisional?
2. What is wrong with filing claims in a provisional application?

Patently-O Bits and Bytes No. 40

• Sitting by Designation: The CAFC has continued to offer district court judges from across the country the opportunity to sit on the appellate bench for a day. On June 3, 2008, Judge Ward from the Eastern District of Texas filled out a panel with Judges Newman and Gajarsa. They will be deciding three patent cases: Hyatt v. Dudas (waiver of arguments before the BPAI); Atlanta Pharma v. Teva (appeal from denial of preliminary injunction to stop teva from selling a generic version of the ulcer med Protonix); and D Beam v. Roller Derby.
• New USPTO Fees: They are going up, but you can put in your two cents by July 3. [New Fees][Contact Walter.Schlueter@uspto.gov. Include RIN number RIN 0651–AC21 in the subject line.]
• FTC Commissioner Rosch recently spoke about patents and antitrust. He believes that the FTC Act, the Clayton Act and the Sherman Act all create “viable enforcement tools” against companies that create “patent walls” — especially when they acquire those patents from third parties. The FTC is currently going after N-Data in a case where the patent covers an ethernet standard. [N-Data][Zura’s Comments] Three important cases on this issue:
  • US v. Singer Mfg (Antitrust violation to charge competitors with patent infringement after U.S. company obtained patent from Swiss company)
  • Kobe v. Dempsey Pump (obtaining and using “every important patent” in the field in order to exclude competition, together with other anticompetitive activity, constitutes an antitrust violation)
  • Case of Xerox Corp (settlement consent decree where FTC challenged Xerox’s purchase of additional plain paper copier patents).
• Pre-Purchase Review: There is some room to debate here on the question of organic-patenting (patents on inventions via the company's own R&D) versus acquisitional-patenting (buying up patents invented by others). At the firm level, acquisitional growth is typically reviewed much more harshly for potential antitrust violations than is organic growth. Is the FTC/DOJ headed toward a system of pre-purchase review of major patent acquisitions in the same way that the agencies conduct pre-merger reviews?

A First Look at Who Files Provisional Patent Applications

As part of the 1995 patent law overhaul, the USPTO began allowing patent applicants to file provisional patent applications.  Over a decade later, these lower-cost provisional filings have taken hold.  According to PTO annual reports, over 132,000 provisional patent applications were filed in fiscal year 2007. In perspective, that number is over 30% of the number of the 439,000 non-provisional utility patents filed during the same period. This proportion has been slowly rising since 2002 when the provisional applications filing rate was about 27% of the non-provisional rate.[1] That year (2002), the PTO recorded just under 90,000 provisional applications and 332,000 non-provisional patent applications.

Interestingly, in my study of recently issued patents, only 21% reference a provisional application as a parent. (In the study, I look at approximately 15,000 utility patents issued in April and May 2008.) [2] 

National Tool: Over half of the recently issued patents that listed an assignee indicated that the assignee was a foreign (non-U.S.) corporation or agency.[4]  Although foreign entities are not prohibited from filing provisional applications, the provisional tool was designed to benefit U.S. entities. Thus, it is not a surprise that only 5% of the patents assigned to international applicants were associated with a provisional application while 30% of the patents assigned to a U.S. applicant were associated with a provisional application.  Two countries – Israel and Canada – stood out as filing the highest proportion of provisional parent claims. Both of these countries are known for having patent attorneys with a high level of familiarity with U.S. laws.  Only 2% of the Japanese & Korean patents included provisional parent claims. [Updated June 03 with Corrected Figure]

The provisional application provides a potential extra year of patent eligibility at the end of the term.  Thus, it is also not surprising that new drug inventions – where a potential year at the end of the term is most valuable – have the highest rate of association with a provisional application.[5]  Likewise, patents on electrical and electronic applications had the lowest rate of provisional filing even after excluding the international applications.

The provisional filings appeared to have almost no impact on the pendency time of a patent application as measured by the number of days from filing the nonprovisional to issuance.  This makes sense as no examination takes place until the nonprovisional application is filed.

The following table also provides some interesting comparisons of patent strategy.[6]

Type of Technology	Number of Utility Patents in the Sample	Number of Patents Referencing Provisional Parent		Assignee
Mechanical	24	1	4%	Ford
	25	13	52%	GM
Drugs & Medical	7	4	57%	Wyeth
	8	7	88%	Genentech
	11	1	9%	Boston Scientific Scimed
	21	10	48%	Medtronic
Computers & Communications	15	12	80%	InterDigital
	23	7	30%	Oracle
	31	11	35%	QUALCOMM
	44	25	57%	Broadcom
	114	16	14%	Microsoft
Chemical	6	6	100%	Bristol-Myers Squibb
	9	4	44%	Procter Gamble
	10	3	30%	3M Innovative Properties
	14	9	64%	EI du Pont de Nemours
	17	0	0%	General Electric[7]
	17	16	94%	Genentech

 

---

[1] This information comes from PTO annual reports for FY 2006 and 2007.

[2] These patents were downloaded on May 30. I excluded the few patents filed prior to the 1995 introduction of provisional patent applications.

[3] In a follow-on study, I will look at published patent applications claiming priority to provisional applications to get some sense of how often folks abandon provisional patent applications.

[4] 6823 were assigned to foreign entity while 6457 were assigned to a U.S. entity. Another 1922 had no listed assignee.

[5] My study included 677 patents having a primary U.S. Classification in a “drug” field and also assigned to a U.S. entity. Of those, 48% were associated with a provisional application.

[6] Note, my assignee ‘scrubber’ is not yet perfect. Thus, it is likely that some patents associated with listed assignees are not included in the table.

[7] Some companies, such as GE hold patents in several different categories – this table looks only at those patents in the particular identified category.

Patently-O Bits and Bytes No 39

• Congratulations to Ryan Swarts! Mr. Swarts was my student in eCommerce Law and has been in charge of the successful Patently-O Job board for the past year … all while running his own company. Ryan recently graduated from MU Law and is now looking to specialize in trademark and copyright law, especially relating to the Internet. Now that he’s a free agent — feel free to contact him directly.  [Ryan’s Resume][Contact Ryan].
• June 25–29: The FCBA’s Bench & Bar Conference will be in Silicon Valley area (Monterey) for the first time. Speakers are primarily judges and in-house counsel. [LINK].
• Such As: Contract Specialist Kenneth Adams discusses the recent decision in Lawler Mfg. v. Bradley Corp. and the use of “such as” in contract formation. [LINK][Patently-O discussion of Lawler].
• Egyptian Goddess En Banc: Oral arguments are online.

Patent Prosecution Timing for Recently Issued Patents

I looked at the filing and issued dates of 15,000 utility patents issued in April and May of 2008 and created a statistic "Months in Prosecution." To create a histogram, I rounded up to the nearest whole month to plot the chart. The median time in prosecution is 39.5 months while the average is 41.8 months. This graph lumps together all the utility patents – A serious consideration of this data needs to separate out at least two major factors in the applicant's control that have a large impact the time in prosecution: (1) Is the application a continuation application or a new "original" application? As a general matter, continuation applications issue much more rapidly do than original applications. (2) What is the area of technology of the invention? The PTO examiner corps is divided by area of technology. Some have a large backlog of cases waiting prosecution while others have very few.