Senate Reform Bill

It appears that the Senate has pulled the plug on the Patent Reform Act (S. 1145) after Senate Majority Leader Harry Reid pulled the bill from the floor schedule. This is not a huge surprise given the interests against it. (via ars technica)

A problematic area was a proposed change to the award of damages under the provision for Reasonable Royalty Damages. Currently, courts generally consider the value of the entire product when any part of it infringes a patent. The proposed changes would allow judges to base damages only on the “economic value properly attributable to patent’s specific contributions over the prior art.” Opponents of the legislation say it would make it easier for large companies to infringe the patents of small companies or individual inventors.

No indication when the bill will be re-started but expect it back after the new administration comes in.

See also: Coalition for Patent Fairness Thinks Patent Reform Is Near

Tafas v. Dudas

On the other end, the Patent Office is forging ahead with its attempt to force rule changes onto the public whether it has the authority or not (via Patently-O).  The USPTO has filed an appeal with the Court of Appeals for the Federal Circuit in the Tafas v. Dudas case reported earlier.

Dr. Triantafyllos Tafas filed suit against the proposed U.S. Patent Office continuation rules for being void for exceeding the PTO’s authority and won a permanent injunction prohibiting the USPTO from putting the new rules changes into effect.

The court held that, under the existing patent, system an applicant may file an unlimited number of continuation or continuation-in-part applications, RCEs, and claims. As far as continuation and continuation-in-part applications go, 35 USC 120 provides that there is no statutory basis for fixing an arbitrary limit to the number of continuing applications that may be filed and that retain the benefit of the priority date.

See also: No Joke, Court Smacks Down New Patent Rules

Posted May 7th, 2008 by Stephen Albainy-Jenei in Patent Reform, USPTO
| | 3 Comments »

The public comment letters on the proposed Markush Rules by the Patent Office are up on the USPTO website. The Patent Office is moving ever onward with its proposed revision to the rules of practice pertaining to any claim using alternative language to claim one or more species. That is, if the claims use Markush or other forms of alternative language.

Markush claims, officially sanctioned since 1924, is a claim drafting technique using the phrase ‘‘selected from the group consisting of’’ followed by a closed listing of specific members of the group. These types of claims allow an applicant to describe an invention where there is no available wording for the group.

According to the USPTO, the search and examination of such claims consume a disproportionate amount of Office resources as compared to other types of claims. I guess as opposed to claims that don’t use big words.

Specifically, the USPTO is complaining about applications claiming compounds by their chemical structure (read: they hate the Chemical and biotech arts). The proposed rules would allow the Office to require new application for each listed item.

The Office proposes to encourage applicants who use alternative language to provide an explanation as to why the claim is directed to a single invention. Under the proposed rules, an applicant is may explain, for example, that the species share a substantial feature for a common utility. Alternatively, applicants may explain that the species are prima facie obvious over each other. It’s a poor choice either way.

As to the suggested alternative, it is hard to imagine that Applicants would ever want to admit that species are prima facie obvious over each other. If applicants were to admit that their species are prima facie obvious over each other, they could not overcome a reference that anticipated one of the species by simply excising that offending species from the claim.

37 C.F.R. § 1.75(a) provides that “[t]he specification must conclude with a claim particularly pointing out and distinctly claiming the subject matter which the applicant regards as his or her invention or discovery. A claim must be limited to a single invention.” In the commentary related to this proposed section, it is stated that the “Office proposes that if a single claim defines multiple independent and distinct inventions, the examiner may apply a restriction requirement before examination.” (72 Fed. Reg. at 44995). Furthermore, it is stated that “[p]roposed §1.75(a) would provide the basis for objecting to the format of a claim that is directed to two or more independent and distinct inventions” (72 Fed. Reg. at 44997).

This is crazy. The language is confusing and unclear and would make mandatory a restriction requirement where more than a single invention was covered by a claim. 35 U.S.C. § 121 says that restriction is made permissive by the statute, and not mandatory. An examiner should be free not to require restriction within a single claim, and that claim should not be subject to attack even if it arguably is directed to more than a single invention.

The proposed language is confusing and unclear in suggesting that a claim must be limited to a “single invention.”

Among the many still smoldering hate mails, David Boundy of Cantor Fitzgerald fired off angry comments about proposed Markush Rules and the PTO’s Initial Regulatory Flexibility Analysis (IRFA) and Paperwork Reduction Act Information Collection Request.

His comments on the Markush rule changes came down to the markush rule coins a sui generis non-statutory definition for the word “invention,” which either renders the rules unintelligible or leads to unintended consequences:

The proposed rule text and preamble in the Notice of Proposed Rulemaking (NPRM) use the word “invention” to mean something other than “the scope of one claim.” Rather than use the long-established definition of the term “invention,” the NPRM uses the term in some loose sense, with no stated or inferable definition. This usage renders most of the NPRM simply unintelligible.

Since the late 19th Century, the term “invention” has been coextensive with the word “claim.” 35 U.S.C. § 112 ¶ 2 (claims “particularly point out and distinctly [claim] the subject matter which the applicant regards as his invention”) Throughout the patent law, the word “the invention” is constantly and consistently held to be coextensive with the scope of one claim, by definition.

By trying to split the two, and relying on some unstated informal definition for “invention,” the entire NPRM is unintelligible, and the text of the rules set no meaningful standards. For example, the NPRM proposes to amend 37 C.F.R. § 1.75(a) by adding the words “A claim must be limited to a single invention,” and to add § 1.140, “Two or more independent and distinct inventions may not be claimed in a single claim.” What can this sentence possibly mean? It represents such a departure from and is in such conflict with established meanings of words as to be meaningless, and can only serve to invite abuse by examiners. Is the sentence intended to be a meaningless tautology? Does “A claim must be limited to a single invention” mean that no claim may have more than one dependent claim? That no claim may cover two disclosed embodiments?

See also:

Patent Office: Application Costs Could Increase by $100,000 or More

USPTO to Limit Markush (Alternative) Claims: Serious Cost Increase in the Forecast

Posted April 30th, 2008 by Stephen Albainy-Jenei in Patent Reform, USPTO
| | 2 Comments »

After months of meetings and redrafting work, the U.S. Senate is said to be ready to make a move on the patent reform bill, S. 1145. Various senators are said to be working behind the scenes drafting amendments with some compromises being made on section 11 of the bill, a/k/a “Applicant Quality Submissions (AQS).”

The Intellectual Property Owners Association (IPO) is urging everyone to contact their senators to get the section on AQS banished.

Meanwhile, the Bush Administration still has concerns. Carlos Gutierrez, the Secretary of the U.S. Department of Commerce, sent a letter to Senator Patrick Leahy urging the preferences of the Administration. Specifically, he emphasizes the importance of section 11 (Applicant Quality Submissions). Interesting, given that this is one of the stupiderest provisions of the bill.

Specifically, Gutierrez states:

The Administration strongly supports the AQS provision in the bill in its current form and believes that enactment will prove to be the strongest step toward improved patent quality. By reducing the number of poor quality and imprecise applications, applicant quality standards will result in dramatic reductions in patent pendency and backlog, as well as reduce the likelihood of excessive litigation. The current misalignment of information incentives slows and degrades the patenting process.

If this sounds like it was written by the Patent Office itself, you’re right. The Patent Office is an arm of the Commerce Department and Gutierrez is merely falling in line. The letter states that “[t]here is no one who has greater opportunity, information, or incentive to explain why an application deserves a patent grant than the applicant.”

The Administration also supports changes to the doctrine of inequitable conduct arguing that the inequitable conduct standard should require actual fraud. The Administration also supports post-grant patent review avenues to challenge a patent’s validity.

For the record, the Administration’s big concern is changes to the assessment of damages in patent infringement cases — exactly the issue for which the Coalition for Patent Fairness said that they would fight to the death. Currently, courts generally consider the value of the entire product when any part of it infringes a patent. The proposed changes would allow judges to base damages only on the “economic value properly attributable to patent’s specific contributions over the prior art.”

The Administration is willing to support methods that identify the factors and evidence relevant to the determination of damages and to consider only those factors when making their determinations. Such a “gatekeeper” function would promote transparency without limiting necessary discretion.

What’s not been determined is whether or not shifting more burden to the applicant really is the most efficient way to achieve better quality examination.

George Margolin, Vice President, Professional Inventors Alliance, poses the question in his response to the Coalition for Patent Fairness. Margolin asks if the Coalition argument is: “Someone who invents the “X” key shouldn’t be able to sue the keyboard maker for the value of all the letters,” then, “Who would be dumb enough to BUY a keyboard WITHOUT the X or A or E KEY or any other crucial key?”

Noteworthy in all this discussion is that Jon Dudas, Commissioner of Patents, stated that each patent application costs the USPTO $4,200, while basic filing fees are under $1,000. [Note to readers: Does anyone know where this number comes from or can verify the accuracy?] This sounds funny given that the patent office brings in more money that it spends on operations. I guess they forgot to mention that they get the other $3200 (and much more) by forcing you to file multiple divisionals and endless continuations in order to get something allowed.

If you want to be heard, call the capitol switchboard, 202/224-3121, and ask to be connected to your senators’ offices.

See the letter here: commerce-ltr.pdf

Posted April 7th, 2008 by Stephen Albainy-Jenei in Patent Reform
| | 2 Comments »

The Coalition for Patent Fairness held a conference call for the Media yesterday to announce that Senate leaders has made public statements suggesting that the Patent Reform Act (S.1145) could come up for the floor vote in mid-April.  General Counsels from companies that make up the Coalition for Patent Fairness discussed the current state of the bill, what they expect will be accomplished in the weeks ahead and answered some questions.

The Coalition for Patent Fairness is made up of high-tech companies pushing for patent reform. While the last comprehensive patent law reform by Congress was last major revision of the patent laws was the Patent Act of 1952, P.L. 82-593, there is intense lobbying urging that the U.S. patent system is broken and needs to be fixed.

Although no one has really studied whether or not the system is actually in need of change, the call for altering the patent system comes mainly from the high-tech industry, which feels under fire from too many patent infringement lawsuits. Many believe corporations are trying to change the laws to fit their business model instead of trying to fit their business practices to conform to existing U.S. patent laws.

Taken together, the Patent Reform Act, the Supreme Court rulings and the proposed Patent Office rule changes tend to favor the high-tech industry over the biotech and pharmaceutical industries. The bill favors high tech over pharma and biotech particularly in changing the apportionment of damages clause, which would reduce damage awards substantially.

The effect can be disparate since the high tech industry is built on many patents covering incremental changes and improvements while the pharmaceutical industry typically would have one or two patents covering the compound at issue. High tech companies are out to quash so-called nuisance suits while pharmaceutical companies can live and die on a single patent.

(See: Duality: Light and Dark Forces Line Up For and Against Patent Reform)

Mark Chandler, General Counsel of Cisco, Mike Holston, General Counsel of HP and Time Warner chief patent counsel Chuck Fish answered questions on the perennial reform bill. They presented the bill as having consensus on most items with four remaining issues of serious contention.

These issues are:

Applicant Quality Submissions - what Fish said was referred to by the three letters AQS (but often referred to by opponents with four-letter words). In this provision, the USPTO wants to transfer responsibility for patent searching from patent examiners to patent applicants. The Intellectual Property Owners (IPO) has been campaigning against this hair-brained idea.

Venue - the bill would change the rules on venue, i.e., where a patent holder can sue an infringer. The Coalition believes that neither plaintiffs nor defendants should have to go to an inconvenient forum. Of course, the definition of inconvenient is up for debate.  More at the Chicago IP Litigation Blog.

Reasonable Royalty Damages - Currently, courts generally consider the value of the entire product when any part of it infringes a patent. The proposed changes would allow judges to base damages only on the “economic value properly attributable to patent’s specific contributions over the prior art.” Opponents of the legislation say it would make it easier for large companies to infringe the patents of small companies or individual inventors. More at Patently-O.

Equitable Defense - the Coalition urges that there needs to be real consequences for misleading the PTO and there needs to be efforts to avoid making changes with unintended consequences. Currently, the legislation would effectively remove inequitable conduct as a defense in infringement cases by first requiring a finding of prior art that invalidates the patent claim. If the claim is already invalid on the basis of the prior art, the issue of inequitable conduct becomes moot. More at Patent Docs.

When pressed for making any substantive comments, the Coalition members shrugged off questions by saying they were not prepared to make specific statements or suggestions especially related to what they would compromise on or not. However, the Coalition members made it clear that the one item on the list that was a minimum for their approval was the limitation on damages. They said there needs to be meaningful changes and that the only way the bill was going forward was with this critical issue intact. More from the Patent Law Center.

It’s not clear why the announcement now but Dan Sweet, a spokesman for the Coalition for Patent Fairness, said he expects the Senate to take action soon.

Ronald Riley, president of the Professional Inventors Alliance, thinks there is enough opposition to prevent passage of the bill.  Many unions, such as the AFL-CIO, the International Federation of Professional and Technical Engineers, and the United Steelworkers are against the legislation. Unions are concerned that the mandatory publication clause will make it easier for others to pirate technology leading to a loss of jobs.  While the Coalition has said their concerns were addressed, universities and research institutes also appear to have problems with the bill in its current form.

Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood immediately released a statement rejecting claims that patent reform legislation is close to ready for consideration by the full Senate:

BIO has been working constructively with interested Senators and stakeholders, and we are unaware of any “deal” on patent reform, or that a consensus deal is close to being finalized. A wide range of industries, labor unions and universities continue to have serious concerns about key provisions of the Patent Reform Act, S. 1145, including the apportionment of damages, post-grant review and real inequitable conduct reform.

Apparently, the USPTO doesn’t even support the Patent Reform Bill. 

more at twiigs.com…

 More here:
IPO Urges Action Against Patent Reform Bill Provision
Bush Administration Calls For “Tech Neutral” Patent Reform
Senate Committee Gives Thumbs Up To Patent Reform Bill
Corn Growers Like Patent Reform; Venture Capitalists Not So Much
Patent Reform Act of 2007: Responding to Legitimate Needs or Special Interests?

Posted April 2nd, 2008 by Stephen Albainy-Jenei in Patent Reform, IP Laws
| | 3 Comments »

Dr. Triantafyllos Tafas’ lawsuit, arguing that the proposed U.S. Patent Office continuation rules are void for exceeding its authority, won a permanent injunction prohibiting the USPTO from putting the new rules changes into effect (Final Rules; 72 Federal Register 161 at 46716).  Triantyfyllos Tafas v. John Dudas and the United States Patent and Trademark Office.

Dr. Tafas, an inventor on more than seventeen patents pending and on eight U.S. issued patents as well as a co-founder at Ikonisys, complained that the USPTO exceeded its Congressionally-delegated rulemaking authority and that the new rule changes specifically violate Section 120, 132, and 365 of the Patent Act.

He was joined by SmithKline Beecham Corporation (d/b/a GlaxoSmithKline). Together, GSK and Tafas claim that the Final Rules, which change the patent system by modifying several long-established rules governing patent examination by the USPTO, are unlawful agency action under Section 706(2) of the Administrative Procedure Act (APA)

The proposed rules would have fundamentally changed the way patents are prosecuted. Once the application is filed, a patent examiner determines whether the claimed invention meets certain statutory requirements such as novelty, nonobviousness, and definiteness, among others. If an application fails to meet these demands, the examiner will issue an Office Action containing the grounds for rejection.

Once a patent application is filed and (finally) reviewed by a patent examiner, the examiner issues an Office Action stating reasons for reflecting the claims. The applicant may then amend the claims, argue against the rejection, or present evidence showing why the invention is patentable. The patent examiner must then respond by either allowing some or all of the claims or by issuing another rejection.

At issue is that this back-and-forth exchange between an applicant and an examiner does not go on forever. The patent rules state that the second Office Action may be made final. While that implies that there can be many added rounds of review and response, the reality is that the Patent Office almost always issues a second action as final. Why? Because it can. If the action is made final, it boxes the applicant in and limits their ability to respond.

After receiving a final rejection, an applicant may: (1) appeal to the Board of Patent Appeals and Interferences and from there to the United States Court of Appeals for the Federal Circuit; (2) file a request for continued examination (RCE) of the application; or (3) file a continuation or continuation-in-part application. All this costs the applicant additional money in order to proceed.

Before, an applicant could file an unlimited number of continuation or continuation-in-part applications, RCEs, and claims. The Proposed Rules would have limited the number of continuing applications, RCEs, and claims that an applicant could make as a matter of right. The USPTO justified the proposed changes on the ground that the growing number of continuation applications and increasing number and complexity of claims in applications was causing them to have to work too much.

The Final Rules would have permitted an applicant as a matter of right to file two continuation or continuation-in-part applications, plus a single RCE, after an initial application. If the applicant wanted to continue, a third continuation or continuation-in-part application or a second RCE can be filed with a petition and showing that explains why the amendment, argument, or evidence could not have been presented previously.

Fortunately, the court found that the rules went beyond what the law permits:

GSK, Tafas, and the USPTO make numerous arguments for summary judgment in their favor. After thorough examination of the parties’ briefs, the arguments of roughly two dozen amici curiae, and the extensive administrative record, the Court finds that the Final Rules are substantive in nature and exceed the scope of the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2). Consequently, the Court will grant summary judgment to GSK and Tafas and void the Final Rules as otherwise not in accordance with law and in excess of statutory jurisdiction [and] authority. 5 U.S.C. § 706(2). In addition, because the Court believes that one who judges least judges best, it will not reach the other issues raised by the parties, resting instead on the determination of a single dispositive issue.

Section 2(b)(2) of Title 35 empowers the USPTO to establish regulations, not inconsistent with law, to govern the conduct of proceedings in the Office. Under Federal Circuit precedent, however, Section 2(b)(2) does not vest the USPTO with any general substantive rulemaking power.

The USPTO argued that it doesn’t matter if a rule is substantive or procedural and said that the question before the Court is simply whether the Final Rules fall within the expressly delegated rulemaking authority of Section 2(b)(2). According to the USPTO, the 2+1 Rule and the 5/25 Rule fall within the reach of Section 2(b)(2) because they govern the conduct of proceedings in the Office by facilitat[ing] and expedit[ing] the application process.

The court pooh-poohed this:

Despite this attempt to abolish the substantive- procedural distinction, however, the balance of the case law in the Federal Circuit and the Supreme Court indicates that the distinction exists, and that it is pertinent to this dispute. Both Merck and Animal Legal Defense Fund acknowledge the divide, and the law in those cases is clear: Section 2(b)(2)’s authority is limited to rules governing the conduct of proceedings before the Office, the USPTO does not have the authority to issue substantive rules, and it does not have the authority to make substantive declarations interpreting the Patent Act. See Merck, 80 F.3d at 1549-50; Animal Legal Def. Fund, 952 F.2d at 930. Contrary to the USTPO’s contention, the holding in Merck is not mere dicta. Instead, the Court’s delineation of the USPTO’s rulemaking authority under Section 2(b)(2) formed the basis for its conclusion that the Final Determination at issue in that case was not entitled to Chevron deference. See Merck, 80 F.3d at 1549-50. Furthermore, while the USPTO is correct that the ultimate issue in Animal Legal Defense Fund was whether a USPTO policy notice should have been subject to notice and comment rulemaking, in deciding that question the Court nevertheless made a strong statement about the procedural, rather than substantive, nature of Section 2(b)(2)’s statutory predecessor. See 932 F.2d at 930-31. Accordingly, the Court finds that Section 2(b)(2) does not permit the USPTO to promulgate substantive rules, and any rules that may be deemed substantive will be declared null and void.

The USPTO tried arguing that even if the substantive/procedural distinction matters, the USPTO has the authority to promulgate the Final Rules because they are clearly procedural. According to the USPTO, the Final Rules are procedural in nature because, rather than altering the substantive requirements for novelty, nonobviousness, or definiteness, they instead aim to curb repetitive filings by requiring applicants to justify those excess filings and to assist the agency in examining burdensome applications.

This still didn’t work:

Despite the USPTO’s arguments, the Court finds that the Final Rules are neither procedural rules nor rules relating to application processing that have substantive collateral consequences, but substantive rules that change existing law and alter the rights of applicants such as GSK and Tafas under the Patent Act. The 2+1 Rule and the 5/25 Rule, which limit continuing applications, RCEs, and claims, and the ESD requirement, which shifts the examination burden onto applicants, constitute a drastic departure from the terms of the Patent Act as they are presently understood. By so departing, the Final Rules effect changes in GSK’s and Tafas’s existing rights and obligations. The Court will now explain why the provisions of the Patent Act compel this conclusion.

As the Court described in Part I of this Opinion, under the existing patent system an applicant may file an unlimited number of continuation or continuation-in-part applications, RCEs, and claims. As to continuation and continuation-in-part applications, Section 120 provides that such applications shall have the benefit of the priority date of the initial application. 35 U.S.C. § 120. The CCPA has interpreted this language to mean that there is no statutory basis for fixing an arbitrary limit to the number of [continuing] applications that may be filed and that retain the benefit of the priority date.

I wouldn’t throw a party just yet, though.  Like the villain in a bad, B-movie horror flick, the Patent Office will keep coming back with more proposed rules to reduce their workload.  For more creatures from the depths, see the much-loathed Applicant Quality Submissions (AQS). 

In its press release, BIO has already asked for a more “fair and balanced” route to patent reform.

Read the entire opinion here (Tafas SJ Opinion)

Read a copy of the complaint here (link)

More here:

Patent Rule Injunction, Court To Sleep On It
Examination Support Document (ESD) Could Add $26,000 to Patent Costs
Is the Public Interest Really Upheld by the New USPTO Rules?
Court Blocks New USPTO Rules on Continuations and Claims — For Now
Patent Wars Episode II: GSK Strikes Back

Posted April 1st, 2008 by Stephen Albainy-Jenei in Patent Reform, USPTO
| | 4 Comments »

Intellectual Property Owners (IPO) has made a call to arms agains the patent reform legislation in the Senate (S.1145), which may be considered for a vote within the next few weeks. IPO is all-out against the dreaded Applicant Quality Submissions (AQS).

Section 11 on AQS would require nearly all patent applicants to (1) search the prior art and (2) submit a search report and analysis to the USPTO with their applications.

As it appears in S.1145, if enacted, AQS would:

1. impose substantial new costs on applicants without meaningful benefits to the USPTO;
2. create additional opportunities for inequitable conduct claims to be raised at trial;
3. open up opportunities for litigation claims related to the adequacy of the mandatory search; and
4. subject applicants to different standards by exempting micro-entities from the requirement.

The provision adds additional burdens on applicants, increases the cost and complexity of prosecution and litigation and fails to provide meaningful assistance to help the PTO do a better job of examining patent applications. It will deter filing of applications and weaken incentives to invent.

You may find additional information along with instructions on how to contact your Senators on the IPO website at: www.ipo.org/AQSCampaign.  The IPO Staff is available to answer any question you may have on this or other parts of the bill. Call (202) 466-2396 or email Dana Colarulli at: dana@ipo.org.

Make your voice heard.

Posted March 28th, 2008 by Stephen Albainy-Jenei in Patent Reform
| | 15 Comments »

The United States Patent and Trademark Office is moving ever onward with its proposed revision to the rules of practice pertaining to any claim using alternative language to claim one or more species. That is, if the claims use Markush or other forms of alternative language.

Markush claims, officially sanctioned since 1924, is a claim drafting technique using the phrase ‘‘selected from the group consisting of’’ followed by a closed listing of specific members of the group.  These types of claims allow an applicant to describe an invention where there is no available wording for the group. 

According to the USPTO, the search and examination of such claims consume a disproportionate amount of Office resources as compared to other types of claims.  I guess as opposed to claims that don’t use big words.

Specifically, the USPTO is complaining about applications claiming compounds by their chemical structure (read: they’re gunning for the Chemical and biotech arts).  The proposed rules would allow the Office to require new application for each listed item.

After publishing a notice proposing to revise the rules (Alternative Claims Notice of Proposed Rule Making), the Office received several comments/complaints concerning the impact of the proposed rules on small businesses and independent inventors.  So, the Office prepared an analysis on this proposed change to the rules of practice.

Description and estimate of the number of affected small entities:

Using the preceding definition of small entity, the Office screened these published applications for commonly used alternative language (e.g., ‘‘contains one selected from the group consisting of’’) and identified 20,824 small entity applications as containing alternative language and, therefore, as potentially affected by the proposed rule. The Office estimates that this represents approximately 31% of total applications containing alternative language.

As you could guess, a larger proportion of applications containing alternative language is concentrated in the biotechnology/chemical arts since those are the arts where there isn’t a good word to describe a group of related elements(43.4% small entity applications in the biotechnology/chemical arts and 15.8% electrical and mechanical arts).

Description of the projected reporting, recordkeeping and other compliance requirements of the proposed rules:

The proposed rule could potentially impact applicants in two ways:

First, it would require that a claim must be limited to a single invention. Consequently, if a submitted application contains a single claim that defines multiple independent and distinct inventions, then the examiner may apply an intra-claim restriction — applicants who want patent protection for the full scope of the initial application would have to file a divisional application for each additional invention defined in that original claim.

Second, the proposed rule allows examiners to require applicants to make amendments to simplify the presentation of claims.

The Office thinks that an applicant would need to file at most seven divisional applications following an examiner’s restriction requirement, “even if more were needed to seek patent protection for the full scope of the originally claimed inventions.” Basically, they decided on seven because stating the real cost would just sound bad and have decided that applicants don’t really need to pursue protection on “the full scope” of inventions.

Using this arbitrary point, the Office states that the cost of seven divisional applications would have present value of approximately $42,000. However, the Office’s analysis showed some applications would have required more than 100 divisional applications to maintain scope.

That is, their own estimates show it could cost $600,000 and that is an unrealistically low estimate for the costs. The Office’s own analysis states that the estimated cost for applications needing one divisional application and one amendment to correct the format of the claim(s) would run $14,287. Even for the seven divisional median they are touting, this puts the increased cost at over $100,000 per application. with very complex applications topping $1.4 million.

Oh, and if your considered a large entity, the Office has apparently decided that you can afford to fork over all the extra money so it really isn’t interested in hearing your whining.

To be fair, the Office did say it looked at alternatives but said that “none of these alternatives would accomplish the stated objectives of applicable statutes with a lesser economic impact on small entities,” e.g.,

1. Hiring more examiners: No can do.
2. Charging additional fees for applications containing claims using alternative language: Fun but no.
3. Limiting the number of species that may be presented in an application: You would just have to file all your applications sooner.
4. Exempting small entities (or take no action): No way.

If you want to (try to) make your voice heard, written comments must be received on or before April 9, 2008. No public hearing will be held.

• Comments on the analysis should be addressed to markush-irfa.comments@uspto.gov
• Comments on the proposed rules should be sent to markush.comments@uspto.gov.

Proposed rule, request for comment on initial regulatory flexibility analysis

See also:  USPTO to Limit Markush (Alternative) Claims: Serious Cost Increase in the Forecast

Posted March 11th, 2008 by Stephen Albainy-Jenei in Patent Reform, USPTO
| | 3 Comments »

Jon Dudas, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO), testified in an oversight hearing held by the House Judiciary Committee’s Subcommittee on Courts, the Internet and Intellectual Property.

Among the topics addressed in the testimony were patent and trademark quality and timeliness; hiring, retention and work-life offerings such as the USPTO’s telework program; global policy and enforcement initiatives; and the pending patent modernization legislation. The testimony was to address developments and successes since the last USPTO House oversight hearing in 2005.

Dudas’ testimony was meant to highlight the USPTO’s “record-breaking performance” for the last two years. Oh, really?

Granted, this is a large corporate entity given it has 8,500 employees and almost $2.1 billion in fee revenues.  Dudas said the USPTO hired 1,215 patent examiners in FY 2007 and intends to hire an additional 1,200 patent examiners each year through 2013 and expand the telework program (we’re all for these efforts).

On the downside, Dudas (proudly?) highlighted the fact that the allowance rate for patents is currently 44%.  This is in contrast to allowance rates in excess of 70% just eight years ago. Bear in mind that patent examiners reviewed over 362,000 patent applications in 2007, the largest number ever.

So, does this mean quality is up or frivolous rejections are souring?  Did patent applications really get that much worse in just a few years?

Also, the percentage of Board of Patent Appeals decisions in which the examiner is affirmed or affirmed in part has increased from 51% to 69%. Finally, since the pre-appeal brief program was established in midyear 2005, the percentage of applications reviewed under the program in which the examiners action is deemed correct has increased from 45% to 56%.

Dudas mentions that the Office of Patent Quality Assurance (OPQA) has “implemented targeted reviews of examination processes or functions that are perceived to potentially be problematic trends” whatever that means — the areas of final rejection practice, Request for Continued Examination (RCE) practice, search quality and restriction practice were identified for review during FY 07.

Not surprising, Dudas is tickled pink that the current version of the patent reform bill include provisions pertaining to applicant quality submissions (AQS) basically shifting the burden of the USPTO’s job onto the applicants themselves.

The USPTO is touting its many initiatives to lessen their workload, which include:

1. Accelerated Examination

The USPTO has established procedures setting forth requirements for patent applicants who want, within 12 months, a final decision by the examiner on whether their application for a patent will be granted or denied. To be eligible for “accelerated examination,” applicants who file under this procedure are required to provide specific information so that invalidity of any ultimately issued patent can be completed rapidly and accurately by any attacking competitor crying inequitable conduct.

2. Peer Review Pilot

The USPTO is still trying to push its Peer Review Pilot project that gives so-called technical experts in computer technology the opportunity to submit annoying and irrelevant technical references before an examiner reviews it.

3. Markush Claims

Earlier, USPTO proposed new rules in the Federal Register that will allow an examiner to split one Markush claim into lots and lots of individual claims as distinct inventions so that one application can be turned into dozens, thereby lending credence to the claim that the USPTO gets too many applications.

4. Information Disclosure Statements

We’ve already discussed the stupid USPTO proposed rule changes to information disclosure statement (IDS) requirements and other related matters to improve the quality and efficiency of the examination process. The proposed changes will enable the examiner to require that the applicant make damning statements against themselves so that any ultimately issued patent can be completed rapidly and accurately by any attacking competitor crying inequitable conduct (also see No. 1 above).

5. Open Source as Prior Art

The USPTO is consulting with the Open Source community regarding the potential development of a tagging process and interface to enable examiners access to open source software repositories as a source of prior art.

6. Electronic Filing and Processing

The USPTO continues to promote electronic filing and processing of patent applications as a means of reducing paper-based inefficiencies. Now, if someone could just explain to me why a $2.1 billion dollar entity trying to move to a web-based system still gives me an error message so often.

7. Central Reexamination Unit (CRU)

Reexamination cases are now assigned to a Central Reexamination Unit (CRU). The goal of the CRU is to close prosecution on all ex-parte reexaminations within two years of filing.

8. Pre-Appeal Conferences

The USPTO announced that patent applicants can request a pre-appeal brief conference and learn its results before nothing happens and the applicant has to go ahead with incurring the costs of drafting and filing an appeal brief. This change is expected to cause more work for applicants.

9. Pre-First Office Action Interview and First Action Interview

The pre-first Office action interview with the applicant or his/her designated legal representative is designed to discuss potential prior art rejections and possibly resolve many or all issues with respect to patentability. Under a pilot program, the first action interview, upon request, prior to the first Office action on the merits where the examiner will conduct a prior art search and provide applicant with a condensed pre-interview Office action. If done fairly, this has a lot of potential to streamline prosecution, a system whereby applicants would otherwise be forced into a final office action.

Not surprising, Dudas is tickled pink that the current version of the patent reform bill include provisions pertaining to applicant quality submissions (AQS), basically shifting the burden of the USPTO’s job onto the applicants themselves.

Anticipate This! wonders what ever happened to an inventors right to a patent.

See all the fun here.

Posted February 29th, 2008 by Stephen Albainy-Jenei in Patent Reform, USPTO
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