Patent Law Blog (Patently-O)

David Kappos: Next USPTO Director

Congratulations!

The White House has announced its intent to nominate David J. Kappos as Director of the United States Patent and Trademark Office (USPTO) with the official title of Under Secretary of Commerce for Intellectual Property. Mr. Kappos has spent his entire career with IBM – both as an electrical engineer and later as a patent attorney. Kappos ends his IBM career (at least for now) as Vice President and Assistant General Counsel, Intellectual Property Law. He is a board member of both AIPLA and IPO.

From the get-go, Mr. Kappos has been a rumored frontrunner to replace Director Jon Dudas and Interim Director John Doll.  In a May 2009 article, I announced my support for Mr. Kappos. In that article, I noted the value of having “a patent office director who understands patents and who has been fully involved with all aspects of the patent system for the past twenty years. I believe that Kappos will be a careful shepherd of the system - leaving it better off in six years than it is today.”

As someone who writes daily about US Patent Law, I am excited about the Kappos nomination because he is likely to open access to previously hidden data and information.  He will also work to create systems that work and measures that are meaningful.

I suspect that the biggest challenge for Mr. Kappos will be moving beyond the unique IBM perspective. Big Blue is an atypical patent owner in its internal systems, patenting volume, and licensing power. As I discussed earlier, it will be important for him to spend time understanding how the rest of the patent community operates.

Notes:

• White House Announcement
• Leahy Statement: “The USPTO faces serious challenges in this difficult economic environment, and the office requires strong leadership.  David Kappos is such a leader.  I look forward to working with him on issues confronting the USPTO, including reducing the backlog and pendency of patent applications and modernizing the patent system as Congress considers the Patent Reform Act.”
• EETimes Article: Quoting Mark Lemley: "The PTO is in crisis, and I think Dave Kappos understands that, and will work creatively to try to find ways out of the crisis, I also think he is sensitive to the need for patent reform, which is a good thing."
• March 2009 Testimony of Kappos
• IP Law Insights (Perkins Coie Blog) summarizes an earlier Kappos article: (1) Patent applicants are responsible for the quality and clarity of their patent applications. (2) Patent applications should be available for public examination. (3) Patent ownership should be transparent and easily discernable. (4) Pure business methods without technical merit should not be patentable.
• Patent Prospector on Kappos and the recent poorly researched WSJ Article.
• From the USPTO Website: “If he is confirmed by the U.S. Senate, Kappos will take control of an office that provides incentives to encourage technological advancement and helps businesses protect their investments, promote their goods and safeguard against deception in the marketplace. The office continues to deal with a patent application backlog of more than 770,000, long waiting periods for patent review, information technology systems that are regarded as outdated and an application process in need of reform.”

Bits and Bytes

• Comments on Patently-O: I have updated the commenting software. Now there are threaded comments, so it is easier to reply directly to a prior comment. If you sign-up for a free Typepad account then you can personalize the image associated with your moniker.
• Law Firms as Patent Owners: Photo site SmugMug recently filed a declaratory judgment action against the patent holding entity VPS, LLC. VPS previously settled with Pictage earning a "multi-million dollar fee" as well as with Kodak Gallery and Shutterfly. VPS's ownership is interesting. Its managing partners are all patent attorneys: Carl Moore (patent attorney at Marshall Gerstein); Timothy Vezeau (patent attorney at Katten Muchin); and Nate Sarpelli. The VPS patents were originally assigned to Monet, Inc. but subsequently assigned to the Marshall Gerstein firm. In 2002, the law firm assigned the rights to VPS. (See Pat. No. 6,321,231). SmugMug Complaint for Declaratory Judgment.pdf
• Design Patent Customs Registration: The IPO has voted to support a statutory change that would create a design patent registry within the Customs and Border Protection (CBP) bureau of the Department of Homeland Security. The CBP already keeps a registry of trademarks and copyrights to assist customs agents in preventing infringing importation through any of the 317 official ports of entry into the US. [CBP E-Recordation System] (No bill has been proposed.)
• Tivo v. DISH and EchoStar: $190 million.
• Update Your PTO Registration Data Online: Link. Before you can use the system, the OED will first send a letter to you with a User ID. After you respond, you will be sent a password.

Speeding-Up Design Patents

Design patents are cheap and usually involve little prosecution. In a recent report at "Design Day", the USPTO noted that the agency is working to further shrink the timeline. Notably, the average number of days from payment of the issue fee to issuance of the patent has shrunk by 2/3 since 2006. In FY2009 (thus far), the delay averages 52 days while in FY 2006, the delay averaged 140+ days. The average pendency is about 16 months. Applications in the "rocket docket" issue within 6 months on average.

Bits and Bytes

Feigelson has created an interesting graph of Jepson Claims.

Bits and Bytes: PTO Director Redux

• Andrew Noyes reported that Congressman Michael Honda is lobbying for Doug Luftman (IP chief at Palm) to become the next director of the USPTO. A photo of Luftman's daughter at President Obama's inauguration was printed in newspapers across the country.  
• There is also some possibility that the current acting PTO Director - John Doll could keep the position for a while. An examiner recently e-mailed saying "John Doll is Fantastic. I really like him." In addition to being well versed in patent law, Doll understands the operation of every part of the Patent Office.

Bits and Bytes: PTO Director

• Nothing to report on the quest for a new PTO director. Although the Obama administration's "fast start" has been reported by the media, he is now slower than President Clinton who nominated Bruce Lehman in April of his first year in office. President Bush nominated Jim Rogan in May of his first year in office. President Obama has two more days to match that benchmark. (My prediction of a May 8 nomination has come and gone...)
• Albritton v. Cisco: The Patent Troll Tracker case continues. Trial in the defamation case is set for September 14 in Tyler Texas. Defendants include Cisco, Richard Frenkel (the Patent Troll Tracker) Mallun Yen, and John Noh.
• Ward v. Cisco: Johnny Ward Jr. (son of Judge Ward) has a parallel case running against Cisco in Texarkana (Arkansas). Ward voluntarily dismissed Frenkel from the lawsuit after Cisco "admitted agency." Discovery is ongoing and the parties have asked for trial to begin December 30, 2009.
• Speaking of EDTX: Last week, the Canadian company i4i won a $200 million verdict for willful patent infringement against Microsoft. Apparently i4i's xml editing software was completely undercut when Microsoft included xml editing software in MSWord. The patent is here. Joe Mullin has more.
• Voting continues for the "best patent blog." (I don't like this survey, but it is still nice to make a good showing.)
• Singulair Patent Reexamination: Earlier this year, ArticleOne asked for prior art on Merck's Singlair patent and two of its "community members" offered seemingly important references. ArticleOne then filed for reexamination of the patent, which was granted on May 20. Today ArticleOne issued press releases related to the reexamination. Peter Ludwig (Darby & Darby) is representing ArticleOne before the PTO. Singulair garnered $4 billion+ in sales last year.
• Information Query: The Singulair patent's reexamination number is 90/009,432. If you were an investor, how would you go about closely following the prosecution history in that case?
• Patent Jobs:
  • Washida & Associates in Tokyo (US Prosecutor in Japan)
  • Cochlear (hearing company) in Sydney (Sr. Counsel)
    
  • Anonymous Big Firm in DC (EE with Prosecution Experience)
  • Akerman Senterfitt (VA or Florida) (EE with Prosecution Experience)

BPAI Statistics: How Many Opinions do BPAI Judges Write?

As a follow-up to an earlier post on BPAI decisions; appeal efficiency and potentially over-worked Administrative Patent Judges, I took a look at BPAI decisions from January and February 2009. According to BPAI's statistics, the BPAI disposed of 993 ex parte appeals during that two month period. Based on the PTO's FY2009 numbers, about 9% of those disposals were either remands or dismissals without a decision on the merits. The examiner's rejection was affirmed in 55% of the cases; Affirmed-in-part in 14% of the cases; and reversed in 23% of the cases.

776 of the Jan-Feb 2009 ex parte decisions show-up in the Westlaw database. Those 776 decisions were authored by 78 different Administrative Patent Judges. During the two month period, four judges penned more than 25 opinions, although the average is closer to 10 opinions. (If we assume that Westlaw includes 80% of the opinions, then the average jumps to 12 opinions in the two months – or six opinions per month). On an annualized basis this extrapolates to authoring an average of 72 opinions per year. Of course, this average includes opinions by BPAI administration who regularly write only a small handful of decisions. Excluding those individuals pushes the extrapolated average to about 75 opinions per year for each BPAI Judge handling ex parte cases.

These numbers are comparable to the Court of Appeals for the Federal Circuit. Each of the twelve Federal Circuit judges (not counting Senior Judges) wrote about 28 majority opinions in 2008. In addition, each Federal Circuit judge participated in over 400 cases (most of which were decided without opinion). Thus, while the BPAI judges write more opinions, the Federal CIrcuit judges actually decide more cases.

Notes:

• The lower number of cases found in Westlaw is due – in part – to the fact that many of the cases being appealed are unpublished. In those cases, the BPAI decisions are kept secret. In addition, for some reason, Westlaw is not picking up all of the released BPAI decisions. Still, the Westlaw format is easier to use than the BPAI PDF.

BPAI Shuts Down Dissent in Favor of Efficiency

The Board of Patent Appeals (BPAI or Board) is very much a quasi-judicial body. The emphasis for today is on quasi. 35 USC §6 calls for each appeal to be heard by at least a three judge panel. Yet, the Board appears to be taking steps to limit the effectiveness of those panels. These changes are apparently motivated by a need for efficiency in the face of budget shortfalls and increased appeals.

Like examiners, BPAI judges have a count system. BPAI Judges are expected to sit on about 300 panels per year and draft about 100 opinions. In the past, judges would receive credit for drafting full dissents and concurring opinions. That has changed. In an internal email, BPAI Vice-Chief Jay Moore has indicated that these extraneous opinions will no longer ordinarily garner any credit. According to Vice-Chief Judge Moore, "[c]oncurrences, dissents, and remands are not normally efficient mechanisms for securing the 'just, speedy, and inexpensive' resolution of an appeal before the Board." The e-mail is reproduced below:

====

From: Moore, James T
Sent: Thursday, May 07, 2009 9:57 AM

To: All BPAI Judges
Cc: MacDonald, Allen; Fleming, Michael R.; Santiago, Amalia

Subject: Policy Clarification on Dissents, Concurrences and Remands

Importance: High

Colleagues:

Please note that, effective immediately, if you would like a dissent, concurrence, or remand to be considered towards your productivity totals, you must submit a request. The form is attached, and may be used retroactively for cases prior to this date. For cases after this date, it must be submitted to your Vice Chief Judge within one week of mailing of the dissent, concurrence, or remand in order to be considered.

Concurrences, dissents, and remands are not normally efficient mechanisms for securing the “just, speedy, and inexpensive” resolution of an appeal before the Board. (Bd. R. 1). As indicated in the PAPs, a productivity credit is not automatically earned for a concurring opinion, dissenting opinion, or remand. Accordingly, justification is required to explain the need to undertake the extra work and occasion the extra delay in order to ensure efficient and proper utilization of our resources. Further, any credit given for a concurring opinion, dissenting opinion, or remand will be commensurate in scope with the justification provided and the scope of the extra work.

Please see Al or Jay if you have any questions.

Thanks,

Jay Moore
Allen MacDonald

====

The push for efficiency at the BPAI is also seen in the non-judge "patent attorney" program. Many of the BPAI opinions are now ghost written by newly minted patent attorneys and then signed by the BPAI judges. The real problem with this program is that when the patent attorneys are used, the BPAI judge is given a much higher throughput quota.

According to an anonymous observer - "the time constraints [under the Patent Attorney program] are so serious that for many cases, not a single one of the judges signing off on a decision will have read the underlying papers detailing the facts of the case." This observer asked to remain anonymous based on "the intolerance of dissent at the Board."

This need for efficiency is also the driver behind the still-pending BPAI appeal rule changes.

Dave Kappos as Next PTO Director?

Although the Obama administration has not directly asked my opinion, I would certainly support David Kappos as the nominee for the next PTO director. Kappos is a longtime IBM patent guru and currently holds the title of VP and Assistant General Counsel in charge of Intellectual Property.

Bottom line here is that it will be helpful to have a patent office director who understands patents and who has been fully involved with all aspects of the patent system for the past twenty years. I believe that Kappos will be a careful shepherd of the system - leaving it better off in six years than it is today.

Kappos believes in the underlying value of innovation. In his words, "the whole system of innovation is more important now than ... ever." Beyond that, he is dedicated to a strong patent system and a strong patent office as mechanisms for fostering innovation. Kappos has been ready to try innovative approaches to "catch the intellectual property system up to the twenty first century." However, he has always been clear that his ideas for innovation "should in no way be confused with denigration or devaluing intellectual property." In addition, his years at IBM have taught him the value of consistency and tradition.

Much of the job of PTO director involves employee relations, and Kappos continues to successfully lead one of the largest private patent departments in the world. His current and former employees are loyal to him as a leader and praise his creativity and genius. The IBM IP office is known for its spirited and open debates on policy and direction. In my view, this corporate management experience and patent prosecution experience are more relevant to running the PTO than - say - running litigation teams at a law firm, managing a congressional committee, or even teaching a group of law students. Before moving forward, I want to note here that former Director Todd Dickinson is also an excellent choice, and he continues to be strongly supported by both examiners and other patent law professionals. Dickinson would almost certainly do the better job of healing the growing rift between examiners and applicants.

In his recent testimony to the Senate, Kappos put IBM's support behind the compromise form of the Patent Reform Act. For IBM, it was important that the damages portion of the bill be revised: "we must nevertheless be mindful of the fundamental importance of ensuring that patentees are appropriately compensated or the patent system will fail to provide the incentive innovators require." However, the IBM proposal was that royalties should be based on the "essential features" of a patent. (Quoting Quanta). This proposal is problematic because it would create new-rule uncertainty and also greatly favor holders of large patent portfolios (such as IBM). As director, Kappos should be careful to balance the "right" solution with the need for consistency and stability of rights. IBM also supported the post-grant review system (which I favor) and the venue changes (which I do not favor).

More than his alignment on specific provisions, we can hope that Kappos will bring an important amount of subject matter expertise - helping to ensure that any legislation does not inadvertently disrupt parts of the system that are already working well.

I do have other reservations. Patent pundit Greg Aharonian has oft complained about Kappos and his tendency to talk about patent quality and then charge forward with junky IBM patent applications. Those complaints have merit. The ill defined term 'patent quality' raises red flags in my mind. Here, Kappos has his benign and potentially helpful pet projects of dramatically improving examiner's access (and ease of access) to prior art; improving prior art and patent documents through more standard lexicons; and public collaboration in patent examination (IBM funded the peer to patent program). In the past, Kappos has talked about patent quality as a problem because it leads to a situation where "nobody has an earthly idea of what [a patent] is worth . . . creating a murky and unclear market." These are really proposals to make the prosecution system work more efficiently rather any fundamental changes to patent rights. IBM is good at systems, and Kappos may be as well.

If it is a benefit, it is also a fault that Kappos' blood is saturated with IBM knowledge and culture. Kappos joined IBM in 1983 right out of college (EE / UC Davis) and stayed with the company after law school (Berkeley). At IBM he spent time with the software legal division and also in the Asia/Pacific division. Unfortunately, in the past 25 years, Kappos may have forgotten that most of the world does not operate like IBM. Thus, when he says that "people no longer innovate individually" or that "many new innovations require investments of unprecedented size," I worry that his vision is skewed. Beyond the PTO, IBM has been able to use its large portfolio and market power to build a large licensing pool with very little litigation. Of course, there are few companies in a position to accomplish that result in today's market. It will be important for him to spend time understanding that - in fact - IBM is the atypical market player. On these point, I believe that Kappos will relax his views somewhat once he is no longer the AGC of IBM.

I am excited that Kappos will push the PTO toward a more open system - allowing access to data and information that has been hidden or limited and ready to cooperate on collaborative projects to streamline the system. Kappos has considerable experience with both European and Asian patent systems, and will likely expand cross-border examination collaboration.

On the software side, Kappos will continue to support the idea that software should be patentable - although he argues that patents should at least cover something "technological" and that business methods should be out. Kappos has also spent a lot of time thinking and working with overlapping intellectual property schemes and considering how those interplay with open source software. However, I have not seen any specific proposals.

In the Patently-O reader poll, Kappos earned only 5% of the vote, falling behind Todd Dickinson (36%), Prof Lemley (8%), and "other" (8%).

Other Sources:

• Why Kappos is Unfit
• IP Watchdog on Kappos
• From Greg Aharonian:
• "One rumored candidate to be the next Director of the Patent and Trademark Office is David Kappos, one of the head patent lawyers at IBM. Given IBM's many abuses of the patent system and patent policy over the past few decades, I think it is inappropriate, nay, wrong, for anyone from IBM to be head of the PTO. Might as well as make Bernie Madoff head of the SEC as part of his upcoming jail-time work-release program. IBM patent lawyers for too long have abused the patent system."
• "Case in point. Last week IBM was issued its usual batch of patents, many of which are crap - crappy patents whose sole value is to clog the PTO's patent examination pipelines to the detriment of everyone else. A patent application policy actively embraced by David Kappos. If I was an IBM investor, I would applaud David for doing his best to help IBM. In fact, sometimes I recommend people to buy IBM stock because the company will do anything to maintain its market value. Kudos to David for his efforts in this regard. But the reward for abusing the patent system for the benefit of IBM should be a gold watch at retirement - and should not be the reward of being appointed head of the PTO."

Design Patents: Sailing Through the PTO Part II

In an earlier article, I noted that only 25.6% of recently issued design patents received at least one rejection during prosecution. I wanted to develop a better understanding of the reasons for rejections, I filtered for recently issued patents that had been initially rejected during process and then pulled-up their file histories using PAIR. For this study, I looked the first non-final rejection of only 86 file wrappers, but even that small number of cases showed a dramatic result.

In my sample, the first non-final rejection came in some combination of six basic forms: anticipation; obviousness; lack of enablement or written description; indefiniteness; new matter; and double patenting.

The surprising results are that only 3.5% (3 of 86) of the rejections were prior art related rejections. In three of the cases, the examiner rejected the pending application as obvious in light of the prior art, and in one of those cases the examiner also asserted that the claimed design was anticipated by the prior art. In the remaining 83 cases, the examiner conducted prior art searches but indicated that the claimed design was patentable over the art. Combining probabilities: My data indicates that fewer than 1% of recently issued design patents ever received a novelty or anticipation rejection. (At 99%CI, this may go as high as 2.5%). In other words, design patent applications sail through the PTO.

Although design patent prosecution does not have much focus on inventiveness, examiners are keen to ensure that the scope of the patent claim (via the drawings) is well defined. The most common rejection in my sample was based on confusion created by the drawings. In a design patent application the drawings represent the majority of the specification and also define the claim scope. Thus, it makes sense that confusing or inconsistent drawings would lead to rejection based on both the first and second paragraph of 35 USC 112. In my sample, 79.1% of the rejections (68 of 86) raised a combination of both lacking enablement/description and indefiniteness.

16.2% of the rejections (14 of 86) included an obviousness-type double patenting rejection against an applicant's own previously-filed application. Those rejections are curably through a terminal disclaimer. However, some applicants prefer to argue over the rejection and save patent term. Finally, 3.5% (3 of 86) of rejections focused on new matter added during prosecution. Often, the new matter was allegedly added when the applicant submitted pen and ink drawings to substitute for photographs found in the original.

A Registration System: My data indicates that our design patent system is approaching a registration system. But, there is no problem with a system of design registration - especially if design patents continue to be narrowly construed. Europe's design registration is working well as are the US systems of trademark and copyright registration. In the US, most property rights are registered or recorded rather than thoroughly examined, and those lower-cost mechanisms should probably be the default unless we have some reason to believe that thorough examination is necessary.

Notes:

• See, Dennis Crouch, Design Patents: Sailing Through the PTO, Patently-O (April 2, 2009).
• My samples of recently issued design patents consists of design patents issued Feb-April 2009.
• As I mentioned in the earlier post, these numbers are a bit skewed because the file histories of abandoned design patent applications are kept secret by the PTO unless used as a priority document. Just under 20% of design patent applications are abandoned during prosecution, and I suspect that a greater percentage of those are rejected during prosecution. This consideration would thus skew the results for someone considering the likelihood that a pending design patent application will be rejected.
• In an upcoming paper (not yet available) I note that design patents are often used as substitutes for trade-dress protection, but that the overlapping of regimes does not create significant problems.

Economic Downturn => Downturn in Patent Filings

PTO Director John Doll was kind enough to provide me with updated numbers on patent filings through March 17, 2009. The PTO's numbers tell the story that original utility application filings and continuation application filings have slowed in FY 2009 while requests for continued examination (RCE's) filings continue to rise. The Office is now faced with a serious financial crisis. Original filings (i.e., revenues) are down to FY 2004 - 2005 levels but the budget and backlog are both at all time highs. Although I the numbers are still being compiled, two of the PTO's other primary sources of revenue - maintenance fees and late fees - are also down this fiscal year.

The first chart below shows a time series for the percentage of continuation applications and RCE filings as compared to the total UPR filings (Utility, Plant, and Re-Issue applications). Remember here, that for most PTO statistics, RCE filings are counted as a utility application. According to this data, 27.6% of all of the UPR filings thus far in FY09 are RCEs - continuing a steady trend of of rising RCE filings. (Note - the RCE data also includes historical data for CPA and R129 filings).

For the next chart, I extrapolated the partial FY 09 data to the entire fiscal year to find some expectation of the total filings for the year. I also removed the RCE/CPA data because most practitioners would not consider those as separate applications. As mentioned above, both the original and continuation filings are down to around FY 04 levels. As compared to FY 08, original filings are on track to drop about 10% while continuations will likely be down over 20%. The large drop in continuation filing is likely an artifact due to the large number of continuations filed at the beginning of FY 08 in anticipation of the looming limits on continuation practice.

In the title of this post, I link the economic downturn with the downturn in patent filings. Some may also link the drop in patent filings with other recent events that may drop the allure of a patent application - namely, KSR v. Teleflex; eBay v. MercExchange; Bilski; Seagate; the prospect of further patent reform; the Second Pair of Eyes review; 750,000 backlog of unexamined patents; and the 26 month average pendency before the first OA.
> Although not in the title of the graph, the numbers do include plant patent filings which have hovered around 1,000 per year.
Of course, other factors may also

Tags: backlog, uspto

Percentage of Patents that were Initially Rejected

This relates to my statements regarding the percentage of applications that receive at least an initial rejection. The graph below shows the percentage of patents issued (2000-2006) that were initially rejected by the PTO broken up into groups of art-units. Thus AU 1630 group actually includes AU 1630 - 1639. Close to 95% of the patents issued through the AU 1630 group during that period were initially rejected before being eventually allowed.

As with the design patent discussion yesterday, the rejection rate above is for applications that eventually issue as patents. For any given application, the effective rejection rate was likely higher because abandoned applications are probably more likely to have been rejected.

This data is now getting a bit old - but it is what it is. This data came from public PAIR before researchers were blocked from accessing it in any substantial way. Since 2006, applicants have complained of increased rejections. My perception that this change is not a shift toward more first office action rejections, but rather a shift toward sustaining more of those rejections in the second and subsequent office actions.

Patently-O Bits and Bytes No. 100

• PTO Director: Commerce Secretary Locke has been confirmed as Commerce Secretary. Congratulations. With patent attorney blinders - the next step is to solidify the PTO leadership positions. Leading candidates include Todd Dickinson and David Kappos (IBM). Dickinson is an old-guard Clinton supporter. Kappos was an Obama donor.
• Drop in Filing?: I recently relayed an apparent quote from the PTO General Counsel James Toupin reporting a 16% decrease in new patent filings. Toupin and the PTO have since rejected that number as a large overstatement and have indicated that they will provide better numbers shortly. The bottom line is still true - the PTO is experiencing a cash-shortfall and is cutting its own budget wherever it can.
  
• Fee Increases: Dramatically shifting its position, the IPO has announced that it opposes "any significant increase in USPTO patent fees in the near term."
• IP Primer: The Dickstein Shapiro firm has released a new version of its IP Primer (free, but you have to give a name).
• Patent Reform 2009: The Senate Judiciary Committee holds the ball on patent reform and is set to meet again to discuss mark-ups on March 31, 2009. Lobbying will be heavy during the next week to define the center "consensus" ground. Quinn; IPWatch.
  

Patently-O Bits and Bytes: Economic Downturn and the PTO

Marketers see an economic downturn as a time to emerge with a new business paradigm. Better start working.

• Hearsay: A Patently-O reader paraphrased the PTO's James Toupin who spoke at a recent USC conference: "New patent filings are down 16% so far in 2009." Patents were previously thought to be rather inelastic to price. There is a confluence of issues: (1) downturn in the US economy reducing cash-on-hand and a strong dollar discouraging foreign investment; (2) Increased PTO bureaucracy making it more difficult to obtain a patent with a valuable scope; (3) increased in patentability standards making it more difficult to obtain patent protection; and (4) decreased potential returns in litigation.
• PTO Budget: The falling numbers has the PTO worried about its budget. I would say that the falling numbers are signs of much larger worries than just the PTO budget.
• PTO Cuts: PTO Director Doll was previously reported as saying that the PTO has stopped hiring.
• PTO Cuts: Now, the PTO has announced that all legal and technical studies programs have been suspended because of "budget constraints." One PTO reader noted that the Examiner's Union (POPA) knew about the cuts to this cherished development program for the past week, but remained silent.
• Superduperextraordinary: CCIA calls for further tightening the standard for patentability. (Via Greg Aharonian)
  

Tafas v. Doll: Continuation Limits Invalid; Limits on Claims and RCEs are OK

Tafas v. Doll (Fed. Cir. 2009)

The PTO has attempted to implement new rules that limit both the number of continuation applications that may be filed and the number of claims that may be included within each application. The district court issued a summary judgment ruling that blocked implementation of the rules. On appeal, the Federal Circuit has vacated-in-part – finding that some of the limitations on continuations improperly conflict with 35 U.S.C. § 120, but that the remaining limits are "within the scope of the USPTO's rulemaking authority." The case is not finally decided. Rather, the lower court must now decided whether any of the rules are "arbitrary and capricious;" conflict with the Patent Act in ways not already addressed; violated proper rulemaking procedure; are impermissibly vague; or impermissibly retroactive.

Final Rule 78 (Continuations): The PTO's Final Rule 78 would have required that any applicant wanting to pursue more than two continuation applications file a petition "showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application." According to the court, that rule is in conflict with Section 120 of the Patent Act, which entitles the application to the filing date of a prior-filed application. In a concurring opinion, Judge Bryson noted that the conflict arises only because the limit is on the "number of continuations co-pending with the first-filed application."

Final Rule 114 (RCEs): The PTO's Final Rule 114 operated in the same way as Rule 78 except that it applied to Requests for Continued Examination (RCEs) rather than continuation applications. Because RCEs are not implicated by Section 120, the Federal Circuit found no conflict there.

Final Rules 75 and 265 (Claims): These rules would require an examination support document (ESD) for any application that includes more than five independent claims or twenty-five total claims. The ESD includes a preexamination prior art search, a list of the most relevant references and limitations disclosed by each reference, an explanation of how each independent claim is patentable over the submitted references, and an analysis of how each limitation of the claims is disclosed and enabled by the specification. The Federal Circuit found that the lower court was wrong in finding that the PTO exceeded its authority in implementing these rules.

Rulemaking Authority: The initial focus of the court's analysis is on the Rulemaking Authority of the USPTO. 35 U.S.C. § 2(b) gives the PTO authority to "establish regulations, not inconsistent with the law, which . . . (A) shall govern the conduct of proceedings in the office; . . . (C) shall facilitate and expedite the processing of patent applications, particularly those which can be filed, stored, processed, searched, and retrieved electronically . . . (D) may govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office . . . ." The PTO is also required – under Section 132(b) – to "prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant." Although, these rules do not provide any "general substantive rulemaking power" to the PTO, the court will still grant Chevron deference to the PTO's interpretation of "statutory provisions that relate to the exercise of delegated authority."

Substantive v. Procedural: Without substantive rulemaking authority, the case turns on whether the limits are procedural or substantive. This is a difficult question to answer, and the Federal Circuit chose to follow the 1994 JEM case decided by the DC Circuit. In that case, the court found new rules procedural because they did not "foreclose effective opportunity to make one's case on the merits." With that rule as the framework, the conclusion is somewhat easy. The new rules do not "foreclose effective opportunity" – they only require justification for additional continuations and an ESD filing for additional claims.

"[A]pplicants who diligently present all of their amendments, arguments, and evidence as soon as possible during prosecution will be granted as many RCEs as they require. Thus, applications that are submitted in compliance with these timing requirements will be fully examined and given all of the benefits provided by the Patent Act. We do not believe that requiring applicants to raise all then-available amendments, arguments, and evidence by the second continuation application or the first RCE is so significant a burden that applicants will be effectively foreclosed from obtaining the patent rights to which they are entitled."

The Federal Circuit admits that the rules puts a large amount of authority in the hands of the PTO – to grant or reject petitions. However, the court took a wait and see approach: "[The courts] will be free to entertain challenges to the USPTO's application of the Final Rules." Oddly, the Court refused to hold the PTO to any of its official or unofficial public statements regarding how it will interpret the rules. "[T]hese comments do not bind the USPTO."

No Inequitable Conduct Problem: Relying on Kingsdown, the Federal Circuit noted that the ESD requirement is unlikely to cause any inequitable conduct problem for applicants. "[D]oubt about the judiciary's ability to apply its own doctrine in a way that yields fair results and discourages frivolous allegations should not preclude the USPTO from promulgating rules that are within its statutory authority."

Dissent by Rader: Judge Rader would have affirmed "[b]ecause the Final Rules drastically change the existing law and alter an inventor's rights and obligations under the Patent Act, they are substantive and the PTO exceeded its statutory rulemaking authority under 35 U.S.C. § 2(b)(2)."

Notes:

• This case was formerly captioned Tafas v. Dudas.
• In response to the decision, the PTO released the following statement: "The United States Patent and Trademark Office is pleased that the United States Court of Appeals for the Federal Circuit confirmed that the Final Rules are within the agency's rulemaking authority and that the rules regarding requests for continued examination, claims, and examination support documents are consistent with the law. We are further considering other aspects of the opinion, including the Federal Circuit's conclusion that the rule regarding continuations conflicts with the Patent Act."

  

Patently-O Bits and Bytes

• Patent Reform: Senator Kyl Introduces the alternative Patent Reform Act of 2009; This bill is more patent-holder friendly than the Leahy bill. The Leahy bill may see some action in Committee on March 26, 2009.
• Patent Reform: Inequitable Conduct: Although a co-sponsor of the Leahy Act, Senator Hatch has suggested that the reforms should include reforms of inequitable conduct proceedings.
• ITC: The res judicata effect of ITC Section 337 Decisions: Nil.
• ITC Theory: John Marshall's IP Law Journal has a nice set of articles focused on ITC patent Litigation
• Personnel: Gov. Gary Locke is President Obama's nominee for Secretary of Commerce. Barring some unknown tax snafu or AIG relationship, is expected to be confirmed quickly. In his Senate testimony he mentioned the politically correct goal of reducing the PTO backlog along with creating a foundation for long-term economic growth; improving weather forecasting, and managing our fishing industry.
• Personnel: The PTO needs three new members of its Patent Public Advisory Committee (PPAC). Current members include Kevin Rivette (Rembrandts in the Attic), Louis Foreman (CEO / Inventor), Scott Kieff (Conservative Law Professor), Damon Matteo (PARC innovation & licensing chief), Doug Patton (inventor & industrial designer at PattonDesign); David Westergard (IP guy at Micron – Looking to water-down patent rights), Marc Adler (former Chief of IP at Rohm & Haas), Steve Pinkos (former Deputy to Jon Dudas), and Maureen Toohey (Solo practitioner; former GC of a Dean Kamen's DEKA company). I believe that Rivette, Patton, and Westergard will have reached the end of their terms this year and will be replaced.
• The Economic Downturn: Diane Bartz has taken over writing all about patent law for Reuters. In a recent interview with John Doll, she uncovers that the PTO is projecting a 2% drop in applications in 2009. Others expect a 10% decline. The problem for the PTO is that their funding is entirely fee driven, and the agency had budgeted for a 5% increase. Along with most law firms, according to Doll, the PTO has "stopped hiring at this time."

Patently-O Bits and Bytes

• Upcoming Event: ACI's 3rd Annual Paragraph IV Disputes on April 27-28, 2009 in New York City (Downtown Marriott). http://www.americanconference.com/ParagraphIV.htm . This is a good event because it is well attended by both the innovators (brands) and the generics. On the wednesday following the class, several speakers will walk through a brand-generic settlement agreement and work on mechanisms to avoid FTC & antitrust problems.  
• PCT Search Offices: The PTO is warning PCT applicants to make sure that the selected International Search Authority (ISA) is certified for your particular type of claims. One problem, the EPO is not ready to handle business method claims. [Notice]
• Court Report: 2,875 patent lawsuits were terminated in the year ending Sept 30, 2008. Of those, only 3.8% (109) reached trial. Although 3.8% appears low, patent cases reach trial more often than many other claims brought in Federal Court. The same statistic for Copyright and Trademark cases shows 1.3% and 1.7% reaching trial respectively. During the past year, only six patent cases were filed in the Court of Federal Claims alleging infringement by the US Government. Read the Report.

PriorSmart: Tracking Patent Documents

The creative guys at PriorSmart (www.priorsmart.com) have created a very interesting tool for those of you frustrated by the PTO's bans on automated PAIR access. For a relatively small fee, PriorSmart will monitor the docket of any application, reexamination, or issued patent and then e-mail reports. To stay within the PTO's no-automation requirements, PriorSmart hires people to check the PAIR site and report on activities. Daily monitoring of an application costs $16 per month, a monthly report costs $4 per month. That price beats your paralegal. PriorSmart sees itself as filling a gap by allowing companies to "Track documents affecting your litigation or freedom–to–operate opinion; Monitor competitors en masse; [and] Be alerted to new continuations or divisionals."

• http://docs.priorsmart.com/
• Also, check out their search functionality at http://www.priorsmart.com/.

Patently-O Bits and Bytes

• Injunctive Relief: I re-read Michelle Lee's (Google) statement about the need for patent reform. One issue that jumped-out this time: No mention of injunctions. Money is still at stake, but Google appears confident that it won't face a shut-down even if it loses a patent case. In that sense, Google is lucky that it is being sued by non-practicing entities who as a de facto rule don't get injunctive relief against infringers who have a major market share.
• Benefit of Trade Secrets: Avoid Charges of Infringement. In some senses, google is very public. Yet, its actual operation is quite secretive. One benefit of that type of operation is that it helps avoid charges of patent infringement. If patentee's can't tell how you operate, it makes it much more difficult to assert charges of infringement.
• Warranties and Copyright: My colleague Marc Roark has an interesting new paper: Limitation of Sales Warranties as an Alternative to Intellectual Property Rights: An Empirical Analysis of Iphone Warranties' Deterrent Impact on Consumers.
• The BPAI Watchdog: http://bpaiwatchdog.blogspot.com/. So far, Leigh Martinson is focusing on the BPAI's application of Bilski.
• European Bilski: The Enlarged Board of Appeal of the EPO is looking for third-party input on four issues:
• 1. Is it only proper to exclude patents covering computer programs as such when explicitly claimed as a "computer program"?
  2. Does a claim avoid the computer program as such exclusion by mentioning a computer or data storage medium? (If not, what technical effect is needed?)
  3. Can a technical effect be non-physical? Is it sufficient if the physical entity is an unspecified computer?
  4. Does the activity of programming a computer necessarily involve technical considerations?
• Input on the European questions are due by the end of April. http://www.epo.org/topics/news/2009/20090219.html.
• Application for the job of PTO Director (by Prof Morris) http://www.stanford.edu/~rjmorris/pto.htm. I maintain that it is possible to find an excellent nominee who is not a patent attorney. However, any nominee who does not have extensive experience with the patent prosecution process will face an uphill credibility battle from day one.

PTO’s Current Examination Standards for Applying Bilski

DATE: January 7,2009
TO: Technology Center Directors Patent Examining Corps
FROM: John J. Love
SUBJECT: Guidance for Examining Process Claims in view of In re Bilski

Recently, the Court of Appeals for the Federal Circuit issued an opinion affirming a final decision by the Board of Patent Appeals and Interferences sustaining a rejection of claims because they were not directed to patent-eligible subject matter under 35 U.S.C. § 101. See In re Bilski, 545 F.3d 943, 88 USPQ2d 1385 (Fed. Cir. 2008). The court's opinion clarified the standards applicable in determining whether a claimed method constitutes a statutory "process" under § 101. Office policy is consistent with the court's opinion in Bilski.

We are presently studying the full ramifications of the court's clarification and other recent developments in the law. In view of the Bilski decision, the guidelines are being redrafted to reflect the most current standards for subject matter eligibility. Until the guidelines are completed, examiners should continue to follow the current patent subject matter eligibility guidelines appearing in MPEP 2106, with the following modification.

As explained in a memorandum dated May 15, 2008, entitled "Clarification of 'Processes' under 35 USC § 101", a method claim must meet a specialized, limited meaning to qualify as a patent-eligible process claim. As clarified in Bilski, the test for a method claim is whether the claimed method is (1) tied to a particular machine or apparatus, or (2) transforms a particular article to a different state or thing. This is called the "machine-or-transformation test". It should be noted that the machine-or-transformation test from Bilski is slightly different from the test explained in the May 15 Clarification memo, which was based on the Office's interpretation of the law prior to Bilski.

There are two corollaries to the machine-or-transformation test. First, a mere field-of-use limitation is generally insufficient to render an otherwise ineligible method claim patent- eligible. This means the machine or transformation must impose meaningful limits on the method claim's scope to pass the test. Second, insignificant extra-solution activity will not transform an unpatentable principle into a patentable process. This means reciting a specific machine or a particular transformation of a specific article in an insignificant step, such a data gathering or outputting, is not sufficient to pass the test.

For guidance, examiners are encouraged to consult their managers and to consult additional training materials as they are developed.

[Read the memo]

Congress Looks to Review Patent Examiner Goals

The current pending omnibus appropriations bill would provide $2.01 billion to the PTO so long as all of that money is obtained by the PTO through fees. [LINK]. As Greg Aharonian noted in his PATNEWS, none of the $800 billion bailout money is being directed toward improving the patent system.

The bill includes a statement that Congress will hold back $5 million until the PTO completes "a comprehensive review of the assumptions behind the patent examiner expectancy goals and adopt[s] a revised set of expectancy goals for patent examination."

Today, many examiners operate well over their expectancy goals — earning overtime bonus for extra work. If the time allowed is increased without increasing demands on the examiners, the result may simply be that Examiner #6 operates at 140% of his expected goal rather than 120%. I.e., more pay for the examiner without changing the examiner behavior at all. Now, I’m not opposed to increasing the examiner payscale, but if we are hoping to improve the system, any review of expectancy goals need to be coupled with a review of examination standards.

Patently-O Bits and Bytes

• New Commerce Secretary: Gary Locke. Former Washington State Governor, Partner at Davis Wright Tremaine. Gov. Locke is Chinese American and co-chairs the firm's China practice. He is also an Eagle Scout, a Yalie, and a Terrier.
• 
  USPTO Deferred Examination Comments Due February 26:
  
  
  • http://www.uspto.gov/main/homepagenews/2009feb09.htm
  • https://uspto.connectsolutions.com/p91717658/ (Watch the Roundtable discussion)
  
  
  
  
• 
  Cert Denied: The Supreme Court has denied certiorari in the following patent related cases.
  
  
  • Singleton v. Volkswagen (E.D. Texas Venue Case where 5^th Circuit ordered transfer).
  • Forest Labs v. Caraco (Declaratory Judgment standing).
  • FTC v. Rambus (Duties of a patent holder in standard setting negotiations).
  • Burandt v. Dudas (When is a failure to pay "unavoidable").
  • Apotex v. Roche (reverse doctrine of equivalents).
  
  
  
  
• 
  Judge Linn recently gave a Keynote address to the PTO examiner's corps. [Read it here]. Judge Linn started as a patent examiner in 1965. The following are some quotes from the full speech:
  
  
  • "Your job is much harder now than it was for me all those years ago. The technology of today's inventions is immensely more complex than ever before. The length and breadth of applications is greater. The volume of prior art is much larger. The legal issues are more intricate and harder to comprehend. And the law is in a continual state of change. Compounding all of this is the perception among some individuals that the work of the PTO in general, and the examiners in particular, is somehow of secondary importance and questionable quality. It is commonly said that the real action in patents is in private or corporate practice."
  • "Your job is to grant patents—valid patents. And that takes a combination of skills, reasoning and informed judgment. The Examiner's task is to assess the patentable merits of each invention, as presented, and to grant patents where patents are due. No applicant wants an invalid patent. Similarly, no examiner wants to grant an invalid patent. Thus, both the applicant and the examiner play parallel and complementary—not contradictory— roles in seeing to it that valid patents are issued."
  • "[R]eading legal decisions, particularly those of the Board and the Federal Circuit, is not only the best way to learn how to make the tough decisions you are regularly called upon to make, but also the best way to make your job easier and more enjoyable. You might ask, "why should I bother to read decisions of the Board and the Federal Circuit? After all, I have all the guidance I need in the MPEP, and I don't have time to spend reading other cases that have nothing to do with me." The answer is that the cases bring to life the statutes and rules you are required to apply and give you real world examples of how those statutes and rules apply in similar cases. The MPEP has some guidelines, but they are just a sampling and cannot possibly reflect the full range of claims and circumstances you face every day. Keeping up with the law by reading decisions of the Board and the Federal Circuit will allow you to master your craft and will result in your standing out from your peers."
  • "The last point I want to make is to not forget about §112. … [I]t is not correct to trivialize or ignore these kinds of Informalities [such as claims that are vague and indefinite or lacking in support in the written description]. Indeed, these kinds of problems affect not only the applicant but the public as well in a significant way. … In case after case before my court, the central debate revolves around the meaning of claims terms that, for example, were added during prosecution and do not appear anywhere in the written description. For those cases, the meaning of the claim limitation has to be inferred from other words, leaving the issue open to unnecessary dispute and leading frequently to protracted and costly litigation. You have the authority and the responsibility to not let that happen and to insist that applicants use words in the claims that find unambiguous and full support in the written description."
  
  
  
  

USPTO Maintenance Fees

A large portion of PTO revenue comes through applicant’s payment of maintenance fees. Under the current fee structure, three post-grant maintenance fees must be paid in order to keep a patent from prematurely expiring. A large entity pays $980 3.5 years after issuance; $2,480 7.5 years after issuance; and $4,110 11.5 after issuance. If the fee is not paid then the patent will expire at the next 4, 8, or 12 year mark. In FY08, the PTO reported over $500 million in revenue from maintenance fees.

I wanted to look at how maintenance fees are being paid, so I downloaded the past decade of OG Notices and parsed-out notices of patent expiration. The chart below shows some results.

The chart shows survival rates for the four (red), eight (blue), and twelve (green) year marks. Each datapoint represents the average survival rate for patents that would have expired on that date. For instance, of the 2229 utility patents that issued on December 31, 1996, the first fee was paid for 84% of the patents, the first two fees were paid for 63% of the patents, and all three fees were paied for 49% of the patents. (Note – I did not yet add-back cases that were revived due to unintentional abandonment.)

The median patent has an ordinary enforceable term of about 17 years. This is based on the twenty year term which begins at filing of the non-provisional application minus three years of prosecution. If prosecution takes longer than three years, then the term will likely be extended under the PTA provisions.

However, this data shows that the median patent term is actually cut short by about five years because applicants decide not to pay the large final fee.

A third feature to recognize from this chart is that the percentage of patents whose fees are being paid is increasing over time. However, the PTO has indicated that it expects a drop in maintenance fee payments due to the economic slump.

Judge Moore looked at expiration data for patents issued in 1991 in her paper on “Worthless Patents.” Her result is that patents were more likely to “survive” (i.e., have their maintenance fees paid) when they have more claims, more art cited, more related applications, and longer prosecution times. US corporate owners were more likely to pay the fees than individual or foreign owners. She also found that Semiconductor and Optics patents were the most likely to survive. Amusement patents were unlikely to survive.

Patent Office is Looking for New Leadership

The PTO is not planning to wait until a new Director is appointed before filling other key management slots. Two positions are listed on the PTO job board: (1) Deputy Commissioner for Patent Examination Policy; and (2) Patent Examination Policy Advisor. I believe that the Deputy Commissioner position will fill the spot left by John Love who is reportedly retiring at the end of this month. Pay is between $117k and $177k. For the right person, I will also throw-in a few free favorable Patently-O posts. Seriously, this is one of the top non-political slots at the PTO and a true expert is needed. The Patent Examination Policy Advisor is slightly lower in rank, but will also serve an incredibly important role at the PTO in "providing professional leadership and direction" in the Office of Patent Legal Administration (OPLA). OPLA is the office where the MPEP is written and new rules are drafted.

Applications are due immediately:

• Deputy Commissioner Closes Feb. 24: http://jobsearch.usajobs.gov/getjob.asp?JobID=78943496
• Patent Examination Policy Advisor Closes Feb. 18: http://jobsearch.usajobs.gov/getjob.asp?JobID=78970534

Survey Results: Next PTO Director

The Patent Bar has spoken – overwhelmingly choosing Todd Dickinson as the choice for the next director of the US Patent and Trademark Office. Dickinson is now leading the AIPLA after leaving his post as IP Director of GE. Previously, he was PTO director under Clinton and a partner at the Howrey firm.

In the survey, I asked "Who should be nominated as the next director of the USPTO?" Survey takers were required to select only one choice from the list given. Results from 973 responses are shown below:

Candidate	Percent Selection
Todd Dickinson	36%
Judge Rader	18%
John Whealan	11%
Other	9%
Mark Lemley	8%
Nathan Myhrvold	5%
Jim Pooley	5%
David Kappos	5%
Susan Davies	2%

Of these, I suspect that only Jim Pooley, David Kappos, and perhaps Todd Dickinson would be ready to take on the role. Judge Rader is set to become Chief Judge of the Federal Circuit in 2011, John Whealan is a law professor at GWU and Lemley is a law professor at Stanford. Both have been mentioned as likely Federal Circuit judges. Susan Davies is a White House counsel. In the "other" category, readers suggested several Patently-O contributors including David Boundy (Cantor Fitz), Ati Rai (Duke), Kevin Noonan (MBHB) and the anonymous JAOI (?). Additional suggestions included John Doll (PTO), Mike Kirk (PTO & Former AIPLA director), & Chip Lutton (Apple). Apparently as a joke, several comments also added Dennis Crouch to the list.

My prediction is that the next director did not even make this list…

In Search of a Commerce Secretary

According to news reports, Senator Gregg (R-NH) has withdrawn his nomination as Secretary of Commerce after indicating that he could not fully support President Obama's initiatives. I expect that a permanent PTO Director will not be nominated until the Commerce post is filled. President Bush did not nominate his first PTO Director (Jim Rogan) until May of his first year in office (2001). Clinton nominated Bruce Lehman in April 1993.

Deferred Examination: PTO Roundtable

Today in the PTO roundtable on deferred examination, several important points have been made (some of which directly relate to deferred examination):  

• Gordon Arnold made a compelling point regarding harmonization: "The world's largest economy may be an economy that should have a system that is different from the rest of the economies." Mr. Arnold then focused on patent quality: "The lack of quality of patents is due to failure [of the examining corps]. . . English as a second language is a problem [and] many of the office actions are not excellent. . . . We see RCE's because the applicants feel that they have not had a good examination the first time around."
• Arti Rai: Athough I do not have an exact quote, Professor Rai focused on the notion that the PTO may well not have authority to structure fees for the purposes of modifying applicant behavior rather than to "reasonably compensate" the office.
• Ken Patel from P&G reported that their experience with deferred examination - especially in Japan - has not been good. They face lots of infringement actions against P&G products that have been on the market for five or more years.
• Hans Sauer from BIO reported the result of a survey of BIO members. BIO members use the deferred examination system wherever it is available. The members do not believe that it negatively impacts patent quality or certainty in those systems. BIO members report that they do not use the US system available under 37 CFR 103(d) because it forfeits any patent term adjustments.
• John Doll: I only saw a small portion of Director Doll's presentation. He was open to discussion. He noted that the poor economy is having a substantial downward pressure on PTO fee receipts. At the same time, a slowdown in filings will have the benefit of helping reduce the backlog. In his statements, Doll continued the facade that requests for continued examination somehow create a new application for statistical purposes. The office is expecting 17% more RCE filings in FY2009 than they saw in FY2008.

Survey: Next Patent & Trademark Office Director

Although listed above, Susan Davies is a more likely candidate for the next Intellectual Property Enforcement Coordinator or "IP CZAR" - a role created by the 2008 PRO-IP Act.

Patently-O Bits and Bytes

• Statistics on the Use of Means Plus Function Language: Thus far in 2009 (1/1/2009 – 2/8/2009) the PTO has issued 17,206 patents. Of those, only 12% (2060) have a “means for” clause in the claim language.  Looking back one decade, 24% of patents issued in January 1999 included a “means for” clause in the claim language. Looking back two decades, 34% of patents issued in January 1989 included a “means for” clause in the claim language. Looking back three decades, 40% of patents issued in January 1979 included a “means for” clause in the claim language.
• New Funny Blog: http://courtoons.wordpress.com/ by appellate attorney David Mills
• Watch The Symposium: The hardworking folks at Santa Clara’s Computer & High Technology Law Journal (CHTLJ) have posted materials and video from their conference two weeks ago. Those of you who have practiced before Judges Whyte or Ware will certainly enjoy the tribute video. [LINK] [The best portion begins at 11:20 in the Whyte video].
• PTO Transparancy: Readers submitted two additional suggestions for PTO Transparancy
• • The PTO should calculate and publish the expiration date of each patent.
  • The PTO should publish reexamination certificates so that they are searchable. [Via NIPPER]

No No Words: What Words do you Avoid in Patent Applications

I'm planning to do a quick study of "no no words" in patent applications and how their use has changed over time. Examples include "objects of the invention," the "present invention," "must," "prior art," "limitation," ...

Are there other phrases or words that I should include in the study?

Inter Partes Reexamination Estoppel and ITC Proceedings

One knock against the inter partes reexamination system is that it creates an estoppel. Under 35 USC 315(c), a third-party of requester is estopped from later asserting that a claim is invalid based on grounds that were "raised or could have been raised" during the reexamination. The 315(c) estoppel, however, is specifically limited to "civil action[s]" arising from 28 USC 1338 – i.e., those brought in district court. Similarly, under Section 371(b), an accused infringer cannot request an inter partes reexamination after losing a final decision in district court on any validity issues that the party "raised or could have raised" in the civil action.

In an e-mail earlier this week, Scott Kamholz of Foley Hoag raised the idea that the inter partes reexamination estoppel provisions do not apply to Section 337 investigations through the ITC. I believe Kamholz is correct. Thus, an ITC finding of validity does not estop the losing defendant from later requesting inter partes reexamination on the same grounds. Likewise, a defendant may raise invalidity issues in an ITC investigation that were previously addressed by an inter partes reexamination involving the same parties. Of course, the proceedings in the ITC and PTO are quite different and could readily lead to different outcomes. Perhaps most notably, patents are given a strong presumption of validity in ITC proceedings but are not presumed valid during reexamination.

Next Secretary of Commerce: Senator Gregg?

Republican Senator Judd Gregg appears poised to be nominated as the next Secretary of Commerce. The PTO reports to Commerce, and the next Secretary will likely play an important role in selecting the next PTO directors and in directing PTO policy.

As it turns out, one of Senator Gregg's more controversial actions involves patent issues. In 2000, Gregg's alma mater Columbia University convinced Greg to insert a patent extension provision into an ag spending bill. If it had passed, the extension would have given new life to Columbia's about-to-expire patents that were earning $100 million annually through licensing agreements. [NYTimes][Quinn].

In the past, Senator Gregg has sponsored legislation for rapid approval of generic biosimilars after expiration of the original patents and legislation to extend patents that help support the war on terror. For years, Senator Gregg has also been deeply involved in appropriations.

USPTO Director Jon Dudas has Joined Foley’s DC Office

Jon Dudas served as USPTO director for almost five years. He was appointed by President George W. Bush and left office as President Obama entered. The Foley firm today announced that Mr. Dudas has joined the firm as a partner in their DC office. He will work in their international enforcement practice. Anyone who has met Mr. Dudas knows that he will be very successful in his move to private practice. Best of luck!

Notes:

• Tech Daily (Andrew Noyes) has more [LINK]
• 
  
  
  To avoid any confusion the "Foley" firm is Foley & Lardner, not Foley Hoag.
  
  
  

Deferred Examination: PTO to Hold Roundtable Discussion

It is clear that acting USPTO director John Doll has ideas for improving the patent system and that he is prepared to move the ball forward while he has the floor. Next on the order of business -- deferred examination. On February 12, 2009, the USPTO will hold a preliminary discussion on the potential for expanding the deferred examination system. Requests to participate should be sent to Robert Bahr (robert.bahr@uspto.gov). You may send comments to AC6comments@uspto.gov. Although attendance is open to the public, you must be pre-approved to 'participate.'

The PTO currently has an "optional deferred examination procedure" that allows deferral of examination for up to three years from the priority date after a petition and payment of a fee. According to the PTO, this procedure has been used "fewer than two hundred" times since it was created in 2000. 37 C.F.R. 1.103(d). In other countries, deferred examination is much more popular. In those countries, the applicant can delay payment of some examination fees during the deferral period. However, seems unlikely that the delay in paying fees (saving a couple hundred dollars) would explain the difference in popularity of the systems. An alternative explanation may be inertia. In Japan, for instance, the applicant must take some action to end the deferral period; while in the US, the applicant must take some action to start the deferral period. These different energy barriers might explain some of the difference in the use of deferral. The best explanation might stem from the backlog of US patent applications which prevents most cases from being examined in the first three years. Under the current system, a deferral in the US does nothing to slow the examination process if the examination backlog is already more than three years.

Deferred prosecution does have some possible negative issues. These negatives include the potential for submarining and shifting claim scope to encompass market changes. These problems could 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 the deferral period.

There are two main benefits of deferred examination: (1) delaying spending fees could have a great cost savings if the delay allows companies to figure out that a significant number of applications are no longer worth pursuing; (2) non-deferred cases should move more quickly through the system.

In a 2008 letter to Congress, then PTO director Jon Dudas suggested three possible additions to the US system: (1) a 14-month extendible period for responding to a notice of missing parts; (2) a tiered payment structure that allows the "examination fee" to be paid later; and (3) allow applicants to claim priority to a provisional application for up to five years.

Notes:

• Deferred Examination Announcement

Bits and Bytes

• New PTO Director: The USPTO will be closed on Monday and Tuesday (Jan. 19-20). When it reopens, John Doll will be the Acting Director of the USPTO. Doll is a career PTO official and already fully understands the system and the role of the PTO director. Because Doll has had considerable influence while working under Jon Dudas, we can expect that there will be few immediate or dramatic changes. In part because of the absence of a Commerce Secretary, I expect that Doll's tenure will likely last for several months.
• Secretary of Commerce: While on the topic, I heard this morning that John Thompson, CEO of Symantec may be named appointed as the next Secretary of Commerce. If appointed, Thompson may play an important role in some patentability disputes. Symantec has been directly involved in a number of patent litigation disputes – both as a plaintiff and as a defendant. Symantec is the assignee of hundreds of patents. I cannot say, however, whether Thompson feels scorned or empowered by the current patent system.
• Chief Judge Michel & Professor Lichtman: Professor Doug Lichtman has introduced his most recent guest on the "IP Colloquium" – Chief Judge Paul Michel of the Court of Appeals for the Federal Circuit. In an hour-long discussion, the pair discuss common deficiencies in appellate advocacy; the important value of amicus briefs at the rehearing stage; Section 101 post-Bilski; and the lost doctrine of equivalents. Professor Lichtman has configured the system so that you can also easily claim free CLE credit in California, Illinois, NY, Texas, or Washington State. Excellent work!
• ABA Top Legal Blogs: For two years in a row, the ABA Journal has chosen Patently-O as one of the top 100 legal blogs. (Only 50 blogs made the cut both years). In addition, Patently-O has been honored in 2008 as the top legal blog focusing on a niche area of law. Thank you to everyone who voted during this process! In time for Patently-O's fifth anniversary in April, I expect that the website will record its ten-millionth visit in addition to the 16,000+ readers who receive their updates via the daily e-mail feed.
• Patent agent Brian Galvin has started a new blog, in a recent post, he discusses the BPAI's Cornea-Hasegan Opinion. His analogy is interesting: "[The current state] of statutory eligibility … reminds me of … Ptolemaic astronomy just before Galileo, Kepler and Copernicus. The more wheels we add, the more untenable the whole structure." [LINK]

Patent Term Adjustments Just Got Longer

Wyeth v. Dudas (D.D.C., Sept. 30, 2008).

35 U.S.C. § 154(a) establishes the patent term at twenty years from the filing date. Section 154(b) introduces various term adjustments due to PTO delay. One of the adjustment provisions broadly works toward a "guarantee of no more than 3-year application pendency." The other primary adjustment provision more narrowly focuses on the timeliness of individual PTO actions – such as providing an office action within 14-months. (These are §154(b)(2) and (b)(1) respectively).

Because some delays may qualify under multiple provisions, the statute also includes a clause to prevent double counting. This double counting statute – §154(b)(2)(A) – is written to ensure that "the period of any adjustment granted under this subsection shall not exceed the actual number of days the issuance of the patent was delayed."

In calculating the adjustment, the PTO calculates the adjustment under the broad rule and separately calculates the adjustment under the narrow rule. Then, to avoid double counting, uses only the adjustment that is greater. Thus, the applicant only gets credit for either the broad rule adjustment or the narrow rule adjustment, whichever is larger.

In this case, Wyeth has successfully challenged the PTO's interpretation. As the court holds, the double-counting problem does not arise when the specific PTO (b)(1) delay occurs before the application has been pending for 3-years.

This case, if it holds on appeal, will potentially add 22-months to the eventual term of the patents awaiting examination in the PTO bottleneck.

Already issued patents: 37 C.F.R. § 1.705(d) provides a two month deadline for reconsidering the PTO's calculations.

Notes:

• MBHB Patent Docs have written a more thorough interpretation of the case. [Patent Docs][Patent Hawk]
• File Attachment: pta.pdf (46 KB)

 

Tags: Patent+Term+Adjustment

PTO FEES

In a recent post on fee sensitivity, many readers commented that (1) applicants pay for their own examination through the examination fees; and (2) the PTO should not change fees in order to influence patent applicant behavior. [FEE SENSITVITY]. Although the PTO is fully funded by the fees it charges, a good percentage of current examination costs are paid through maintenance fees. Those fees are currently $980 at 3.5 years after issuance; $2,480 at 7.5 years; and $4,110 at 11.5 years.

 

Taking Action Against the new Ex Parte Appeal Rules

On October 8, 2008, the PTO invited public comments on the potential paperwork burden caused by the new Ex parte Appeal Rules (73 Fed. Reg. 32937-32977, June 10, 2008).[Request for comment]. Economist Dr. Richard B. Belzer is working to push the Office of Management and Budget (OMB) to reject the rules – in part by arguing that they will be unduly burdensome. Any comments that come in response to this Information Collection Request (ICR) will be sent directly to the OMB.

The following comes from Dr. Belzer via David Boundy:

Tafas v. Dudas: Appellate Briefs

Tafas v. Dudas (pending before the Federal Circuit)

GSK and Tafas have filed their appellee briefs in the landmark battle over whether the US Patent Office has the power to implement limitations on continuation applications or the number of claims requested in each application.

"The Final Rules [spurn the limits set by Congress] by, among other things, limiting the number of continuing applications, requests for continued examination ("RCEs"), and claims that an applicant may file. In issuing these rules, the PTO makes an unprecedented and unlawful grab for power that threatens both incentives to innovate as well as the authority of this Court, the Supreme Court, and Congress. Indeed, by enacting the Final Rules, the PTO attempts to grant itself the authority to do exactly what this Court and its predecessor court have repeatedly told the PTO it lacks the power to do."

Document:

• File Attachment: GSK.FedCir.pdf (482 KB)
• File Attachment: tafasbrf.pdf (6191 KB)

Examination Query: Parallel Examination

Lots of times, examiners look at cases in parallel – especially when two cases are filed around the same time by the same applicant and cover similar inventions. The two patents will often issue on the same date with consecutive patent numbers. Are there any special rules, procedures, or counts that apply to this type of parallel examination?

Cooper Techs: PTO’s Interpretation of “Original Application” Given Chevron Deference

Cooper Techs. v. Dudas (Fed. Cir. 2008)

Inter partes reexamination is relatively new. The 1999 AIPA provides that it is available for "any patent that issues from an original application filed in the United States on or after" November 29, 1999. Cooper's original patent application was filed prior to the 1999 deadline, but a continuation application was filed after the deadline. The debate here was whether the continuing application should be considered an "original application" under the statute. The PTO argued that the continuation should be considered an original application and that its interpretation should be given a high level of deference.

On appeal, the CAFC affirmed. In doing so, the court first found that PTO's interpretation of "original application" is was a procedural determination leading the court to grant Chevron-level deference to the PTO's interpretation.

We have also previously held that 35 U.S.C. § 2(b)(2) does not authorize the Patent Office to issue "substantive" rules. See Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996). "A rule is 'substantive' when it 'effects a change in existing law or policy' which 'affect[s] individual rights and obligations.'" … In this case, the Patent Office's interpretation of "original application" does not effect any change in existing law or policy; rather, it is a prospective clarification of ambiguous statutory language regarding a matter of procedure. It is therefore "interpretive"--rather than "substantive"--under the definitions put forward in Animal Legal Defense Fund. We conclude that the Patent Office had the authority under 35 U.S.C. § 2 to interpret section 4608, because that interpretation both governs the conduct of proceedings in the Patent Office, not matters of substantive patent law, and is a prospective clarification of ambiguous statutory language.

….

Because the Patent Office is specifically charged with administering statutory provisions relating to "the conduct of proceedings in the Office," 35 U.S.C. § 2(a)(2)(A), we give Chevron deference to its interpretations of those provisions. See Lacavera ("Because the PTO is specifically charged with administering this statute, we analyze a challenge to the statutory authority of its regulations under the Chevron framework."); see also Bender v. Dudas, 490 F.3d 1361 (Fed. Cir. 2007) (applying Chevron framework to Patent Office regulations for the conduct of proceedings in the Patent Office); Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988) (same).

Under the familiar two-step Chevron analysis, "[w]e always first determine 'whether Congress has directly spoken to the precise question at issue.'" Hawkins v. United States, 469 F.3d 993, 1000 (Fed. Cir. 2006) (quoting Chevron, 467 U.S. at 842). "We do so by employing the traditional tools of statutory construction; we examine the statute's text, structure, and legislative history, and apply the relevant canons of interpretation." Delverde, SrL v. United States, 202 F.3d 1360, 1363 (Fed. Cir. 2000). "If we find 'that Congress had an intention on the precise question at issue, that intention is the law and must be given effect . . . .'" Hawkins, 469 F.3d at 1000 (quoting Chevron, 467 U.S. at 843 n.9.) If we conclude that "Congress either had no intent on the matter, or that Congress's purpose and intent is unclear," Delverde, 202 F.3d at 1363, then we proceed to step two, in which we ask "whether the agency's interpretation is based on a permissible construction of the statutory language at issue," Hawkins, 469 F.3d at 1000.

….

We conclude that the Patent Office's interpretation of section 4608 is permissible and therefore entitled to deference.

This is a relatively minor case, and the true issue is whether it provides any indication of how the court will proceed in Tafas v. Dudas.

Patently-O Bits and Bytes No. 57

• New PTO Fees: Up 5% to account for inflation. [LINK]
• Patently-O Job site has a new media partner: the Inhouse Blog. The Inhouse blog has its own job board with inhouse jobs.
• Duffy Provision: Duffy expressed his "skeptic[ism] about the constitutionality of the retroactivity provision." [LINK]
• Speedo's torso-swimsuit patent is still pending. See http://www.pat2pdf.org/patents/pat20080141431.pdf.

PTO Revises Rules of Ethics and Professionalism

The USPTO has published its final rules implementing changes to its rules of discipline and professionalism that governing patent attorneys, patent agents and trademark attorneys.

Limits on Patent Agents: The most notable portion of the rules may be Section 11.5(b)(1), which defines exactly what PTO registration authorizes. This includes: "preparing and prosecuting any patent application, consulting with or giving advice to a client in contemplation of filing a patent application or other document with the Office, drafting the specification or claims of a patent application; drafting an amendment or reply to a communication from the Office that may require written argument to establish the patentability of a claimed invention; and drafting a communication for a public use, interference, reexamination proceeding, petition, appeal to the Board of Patent Appeals and Interferences, or other proceeding." This also includes drafting patent assignments "if the practitioner is filing or prosecuting the patent application, and assignment does no more than replicate the terms of a previously existing oral or written obligation of assignment from one person or party to another person or party."

In a comment, the PTO makes clear that PTO registration does not authorize offering an "opinion of validity of another party's patent when the client is contemplating litigation and not seeking reexamination" because such activity "could not be reasonably necessary and incident to the preparation and prosecution" of a client's patent. Further, the PTO sees "no circumstance [where] practice before the Office [would] include the rendering of opinions on infringement."

Of course, these limits are directed to patent agents. When practicing within their state, patent attorneys have overlapping authority from state bar registration.

Notes:

• Effective Date, September 15, 2008
• Read the Rules
• These rules are a full revision of the disciplinary procedures. I have not yet read them all.

PTO: Some Claim & Continuation Rules will Not be Effective Until After Injunction is Lifted

PTO Notice:

"USPTO is identifying the applicability date of those regulatory provisions relating to applications containing patentably indistinct claims which are enjoined in Tafas v. Dudas, 530 F. Supp. 2d 786 (E.D. Va. 2008). Should the injunction be lifted, those regulations will apply only to applications filed on or after any new effective date that would be published by the USPTO in the future.

. . . .

The USPTO anticipates that it will be some time before the litigation concerning the Claims and Continuations Final Rule is finally resolved. The USPTO is concerned that some applicants may be taking preparatory action anticipating the new requirements of 37 CFR 1.78(f)(1) and (2), as added by the Claims and Continuations Final Rule, due to the possibility that the injunction by the district court in Tafas will be removed. The purpose of this notice is to aid applicants who might otherwise feel the need to take such preparatory actions by identifying the applicability date of the provisions of 37 CFR 1.78(f) in the event that the injunction by the district court in Tafas is removed. Specifically, the changes in 37 CFR 1.78(f)(1) and (f)(2) will only apply to applications filed on or after any new effective date that would be published by the USPTO after the removal of the injunction. Thus, in the event the referenced injunction is lifted, applicants will only need to comply with the identification requirements of 37 CFR 1.78(f)(1) in applications having an actual filing date on or after this new effective date. Likewise applicants will only have to identify other commonly owned applications that satisfy the conditions set forth in 37 CFR 1.78(f)(1)(i) in applications that have a filing date on or after this new effective date. Similarly, the rebuttable presumption of 37 CFR 1.78(f)(2) will only apply to applications having an actual filing date on or after the effective date. Furthermore, the rebuttable presumption will only exist with respect to an application that satisfies the conditions set forth in 37 CFR 1.78(f)(2)(i) and also has a filing date on or after this new effective date.

Outsourcing of Patent Preparation: PTO Says Beware

In a recent notice, the PTO has indicated that it may be illegal to outsource invention information to a foreign county for the purposes preparing a US patent application.

1. A foreign filing license from the USPTO does not authorize the exporting of subject matter abroad for the preparation of patent applications to be filed in the United States.
2. Applicants who are considering exporting subject matter abroad for the preparation of patent applications to be filed in the United States should contact the Bureau of Industry and Security (BIS) at the Department of Commerce for the appropriate clearances.

TAFAS v. DUDAS: PTO Asks CAFC To Allow Office to Implement Limits on Continuations and Claims

Tafas v. Dudas (on appeal at the CAFC)

After being rejected by the district court, the USPTO has appealed its case to the Federal Circuit. On appeal, the USPTO asks the appellate court to allow the patent agency to implement new rules that place limits on the number of claims filed with each patent application and the number of continuations that may stem from each patent application. [File Attachment: pto tafas brief (144 KB)]

The PTO asks the CAFC to review three specific issues:

1. Whether the PTO's new limits on claims and continuations are within the scope of the Office's statutory rulemaking authority;
2. Whether the new limits conflict with the Patent Act; and
3. Whether the PTO must provide additional notice and comment for its rule changes.

The PTO summarizes its arguments as follows:

1. The Final Rules are within the scope of the USPTO's rulemaking authority under the Patent Act. The Act's primary grant of rulemaking authority, Section 2(b)(2), authorizes the Office to issue rules that "govern the conduct of proceedings in the Office," "facilitate and expedite the processing of patent applications," and "govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office." The USPTO correctly determined that the Final Rules fit within these grants of rulemaking authority. By setting filing and documentation requirements, the rules regulate the conduct of proceedings in the Office and the conduct of attorneys and other representatives, and by discouraging unnecessarily repetitive filings and providing examiners with needed information, they facilitate and expedite the processing of patent applications.

In holding that the Final Rules are ultra vires, the court made no effort to measure the Final Rules against the actual terms of Section 2(b)(2), nor did the court give the USPTO's interpretation of that provision the deference required by Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and its progeny. Instead, the court held that the Office is confined to issuing procedural rules and that the Final Rules are impermissibly substantive. But the cases on which the district court relied do not engraft a rigid procedural/substantive distinction onto Section 2(b)(2). And even if they did, the Final Rules would still pass muster, for they regulate the procedures used in proceedings before the Office rather than the substantive criteria for the awarding of patents. The district court's conclusion that the rules are substantive rather than procedural rests on APA cases that do not involve that distinction at all, and the court's standards for measuring the "substantiveness" of rules are at odds with the Supreme Court's jurisprudence under the Rules Enabling Act.

The court compounded these errors by erroneously holding that Section 2(b)(2)(B), which provides for the USPTO to issue rules "in accordance with" 5 U.S.C. § 553, requires the Office to engage in notice-and-comment rulemaking even when Section 553 expressly provides that notice and comment are not required.

2. In the course of its ultra vires analysis, the district court held that the Final Rules are inconsistent with other provisions of the Patent Act. That holding is likewise incorrect. The court mischaracterized the effects of the Final Rules, misconstrued the statutory provisions, misunderstood the judicial precedents concerning those provisions, and failed to give the USPTO's construction of the provisions the deference required by Chevron.

The district court held that Rules 78 and 114 conflict with Section 120 and 132(b), respectively, because the rules place "hard limits" on the number of continuation applications and RCEs that an applicant may file, while the statutory provisions entitle applicants to make an unlimited number of such filings. But the rules do not in fact limit the number of continuation applications and RCEs that may be filed; they simply require an applicant to show the need for further filings once a threshold number of filings has been made. And even if the rules did impose fixed limits, they would not conflict with Sections 120 and 132(b). Section 120 was enacted by Congress simply to provide a statutory basis for continuation practice, not to vest applicants with the right to file an endless stream of continuation applications.

Likewise, Section 132(b), which directs the Office to issue regulations providing for continued examinations, does not entitle applicants to file an endless series of RCEs. The district court held that Rules 75 conflicts with Section 112 ¶2 by limiting the number of claims that may be included in a single application. But Rule 75 places no limit whatsoever on the number of claims in an application, and Section 112 ¶ 2 does not address the permissibility of such a limit in any event. The court also held that Rule 75 and 265 conflict with the provisions of the Patent Act that assign the USPTO the burden of examination and the burden of establishing a prima facie case of unpatentability. But there is no conflict between those provisions and the rules, which merely require applicants to provide information about their claims and prior art so examiners can discharge their burdens more accurately and efficiently.

Are these appeal timing estimates correct?

The PTO is asking whether these numbers are accurate under the newly finalized Appeal Brief rules. (This will impact whether the Whitehouse allows the new rules to be implemented). Comments are due by August 8, 2008, to Susan Fawcett (Susan.Fawcett@uspto.gov), who will in turn be required to provide them to OMB. 

The numbers above include “the time to gather the necessary information, prepare the briefs, petitions, and requrests, and submit them to the USPTO.” 

Notes:

• UPDATE: Comments are due by August 8, 2008 (I had originally reported August 9).
• Thanks to David Boundy for supplying this information. (For some unknown reason, the USPTO did not post information about this request for information from the public).
• File Attachment: timing.pdf (56 KB) [This contains the PTO’s estimate of hours and costs]
• File Attachment: appeal rules.pdf (287 KB) [This contains the final PTO rules on appeal briefs]
• File Attachment: info collection.pdf (157 KB) [This contains directions on how the OMB requires information to be collected]

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

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.

USPTO News: Update Your Inventor Oath Forms

The Patent Office continues to beef-up its discussion of how to enforce Rule 1.56 duties of disclosure.  The most recent announcement declares that the Office will reject any inventor oath or declaration submitted after July 2008 that does not acknowledge a duty to disclose information material to patentability as defined in Rule 1.56.

37 CFR 1.63(b)(3) expressly requires that the oath include a statement that “acknowledges the duty to disclose to the Office all information known to the person to be material to patentability as defined in § 1.56.” Thus, this notice by the PTO can be seen simply as a nice way to announce future enforcement of the law.

The problem: Apparently, many of the oaths currently submitted only acnowledge a slightly narrower duty to disclose information “material to examination in accordince with 1.56(a).” 

Of course, all applicants (and individuals involved in prosecution) have the same duty to disclose regardless of which oath was signed.

• PTO Notice of Oath Enforcement
• Forms are available here: LINK
• Query: Should 1.56 be modernized to include a duty on the company filing the patent allowing us to break free from “the antiquated notion that it is the inventor who files the application, not the company-assignee.”