Patent Baristas » Prosecution

Patent Reexamination in the Life Sciences

Stephen Jenei — Tue, 27 Oct 2009 13:22:00 +0000

At today’s session of BIO’s IPCC Conference, Gregory Morse of the Central Reexamination Unit of the US Patent and Trademark Office gave a presentation of the process for handling re-exams. Comparing ex parte and inter partes, Morse showed that the time for processing to first action is inching up although inter partes proceedings have not been around enough to give a good picture. He did say that the branch typically is made up of the best of the best examiners so quality of examination and proceedings is very high.

Chad Shear of Fish & Richardson pointed out that the time for inter partes reexamination is quite long and defendants will often try everything to slow down a parallel litigation case so that the USPTO can catch up and possible pass the litigation case since their (perceived) chances are better at the reexam level given the approximately 50% reversal rate by the federal circuit. Shear pointed out that juries are all about damages and willfulness, not the infringement itself.

Under Reexamination, each claim of a patent is presumed valid under 35 U.S.C. 282 and may be enforced notwithstanding the presence of a pending reexamination proceeding. Although litigation may move forward in parallel with a reexamination proceeding, at the district court’s discretion, the results of the reexamination proceeding may have an effect on the litigation. To proceed with a reexamination, a request for reexamination must establish the existence of at least one new technological teaching affecting any claim of the patent for which reexamination has been requested that was not considered by the Office in a prior Office proceeding involving the patent (substantial new question). The SNQ is established based on prior patents and/or printed publications.

Ex Parte Reexamination

A proceeding in which any person may request reexamination of a U.S. Patent based on one or more prior patents or printed publications. A requester who is not the patent owner (i.e., a “third party requester”) has only limited participation rights in the proceeding. [MPEP 2209]

Inter Partes Reexamination

A proceeding in which any person who is not the patent owner and is not otherwise estopped may request reexamination of a U.S. Patent issued from an original application filed on or after November 29, 1999 based on one or more prior patents or printed publications. Both patent owner and third party requester have participation rights throughout the proceeding, including appeal rights. [MPEP 2609]

What are the risks to reexamination? In reexam, the patentee can throw in additional claims carefully crafted around the art you might want to use to invalidate the patent. It is not unusual for a patent to come out of reexam upheld but with many additional claims, which are then added to the lawsuit against you.

What favors reexam for a defendant? First, what court will you be sued in? Is it an unfavorable venue? Second, if the art is extremely technical, your chances are better in reexam than with a jury that will get frustrated by the technology. Finally, do you have a good “story” to tell so that the jury can understand your actions.

What if the inventor won the Nobel Prize (or is otherwise a really favorable patentee)? You want to be in the USPTO.

See reexamination historical statistics for requests for reexamination filed since 7/1/1981 (for ex parte) or since 11/29/1999 (for inter partes) here:

USPTO has “Issued” Interim Examination Instructions For “Evaluating” Subject Matter Eligibility

Stephen Jenei — Wed, 26 Aug 2009 16:00:29 +0000

The USPTO has issued “Interim Examination Instructions For Evaluating Subject Matter Eligibility Under 35 U.S.C. § 101” to be used by patent examiners during examination. These instructions supersede previous guidance on subject matter eligibility.

These instructions must be “really” important given the extraordinarily “high” number of “unnecessary” quotation marks. Maybe the USPTO could benefit from subscribing to the “Blog” of “Unnecessary” Quotation Marks.

INTERIM EXAMINATION INSTRUCTIONS FOR EVALUATING SUBJECT MATTER ELIGIBILITY UNDER 35 U.S.C. § 101

To pass the threshold eligibility inquiries of § 101 for patent protection, a claimed invention must be directed to statutory subject matter and must be useful. Thus, under § 101 two separate patent eligibility considerations are raised: (1) subject matter and (2) utility.

Subject Matter Eligibility

The following two step analysis is used for determining subject matter eligibility:

Step 1: Is the claim directed to one of the four patent-eligible subject matter categories: process, machine, manufacture, or composition of matter?
Step 2: Does the claim wholly embrace a judicially recognized exception, which includes abstract ideas, mental processes or substantially all practical uses (pre-emption) of a law of nature or a natural phenomenon, or is it a particular practical application of a judicial exception?

Processes (methods)

A process claim, to be statutory under § 101, must pass the machine-or-transformation test (M-or-T test) – at least until the Supreme Court reverses this test.

In accordance with the M-or-T test, the claimed process must:

be tied to a particular machine or apparatus (machine implemented); or
particularly transform a particular article to a different state or thing.

A method claim that does not require machine implementation or does not cause a transformation will fail the test and should be rejected under § 101:

However, the mere presence of a machine tie or transformation is not sufficient to pass the test. When a machine tie or transformation has been identified, it must be further determined that the tie is to a particular machine or the particular transformation is of a particular article.

Additionally, the particular machine tie or particular transformation must meet two corollaries to pass the test for subject matter eligibility. First, the use of the particular machine or transformation of the particular article must impose a meaningful limit on the claim’s scope. So, a machine tie in only a field-of-use limitation would not be sufficient. Second, the use of the particular machine or the transformation of the particular article must involve more than insignificant “extra-solution” activity. If the machine or transformation is only present in a field-of-use limitation or in a step that is only insignificant “extra-solution” activity, the claim fails the M-or-T test, despite the presence of a machine or a transformation in the claim.

Insignificant “extra-solution” activity means activity that is not central to the purpose of the method invented by the applicant. For example, gathering data to use in the method when all applications of the method would require some form of data gathering would not impose a meaningful limit on the claim.

You can see the whole set of interim guidelines (pdf) here.

Patent Office Keeps Check, Lets Patent Go Abandoned For Being $10 Short

Stephen Jenei — Wed, 05 Aug 2009 21:20:13 +0000

Dealing with the Patent Office is a lot like standing in front of the airline ticket counter where the agent keeps typing in endless strings of random numbers and letters and politely explains that you can’t possibly make a change in your reservation because your ticket is a A389X-27-Purple ticket and not the B347L-Triple-Lindy ticket.

Although nonprecedential, the U.S. Court of Appeals for the Federal Circuit laid into the Patent Office this week for behaving in what it said was an ” arbitrary and capricious” manner after it cashed a payment that was $10 short and then promptly let the patent expire. See Taylor v. USPTO (CAFC 09-1133).

Jorge Taylor had a patent for a chemical sealant device for repairing flat tires (U.S. Pat. No. 5,178,701) and had to pay the seven-and-a-half-year maintenance fee of $1040. But, Mr. Taylor sent a check for $1030, rather than $1040, in the mail and used the wrong form for transmitting his payment, and sent it to the Applications Branch rather than the Maintenance Fee branch – sort of a hat trick of errors.

Mr. Taylor marked in capital letters at the top of his transmittal form:

“NOTE: IF THIS IS NOT THE CORRECT FORM, PLEASE MAIL THE CORRECT FORM TO THE RETURN ADDRESS ON THE CHECK.”

The PTO employee who processed the form may not have recognized this filing as an attempt to pay a maintenance fee, and may have just processed it as a regular application filing fee. Whatever the thinking, the PTO deposited the check in its account.

Fast forward several years later when Mr. Taylor called the Office in preparation for paying the required eleven-and-a-half-year maintenance fee and the PTO says “Oops, your patent went abandoned for failure to pay the seven-and-a-half-year maintenance fee.”

Taylor asked the PTO for reinstatement of his patent saying that he was “not an attorney but a pauper disabled living on a fixed income (SSI) who cannot pay $200 to petition your office.”

The PTO dismissed the case (for not including $200) also helpfully pointed out that Mr. Taylor’s original payment had not included a certificate of mailing. Thus, because the Office received the payment on January 17, 2001, five days had passed beyond the window for accepting maintenance payments with a surcharge.

Taylor then sued in district court, alleging that the PTO had “misappropriated” his $1030, and sought $1 billion in damages, his estimation of the worth of his intellectual property “in the U.S. and world market.”

The district court dismissed the complaint saying that PTO regulations do not provide a waiver of petition filing fees for indigent applicants and that Taylor had not shown that the PTO’s actions were “arbitrary and capricious” for purposes of making out a claim under the Administrative Procedure Act.

Mr. Taylor appealed to Federal Circuit, which seemed perturbed that the case had to go all the way to the appellate level and was not happy that that the PTO cashed Mr. Taylor’s check and still proceeded to consider his patent expired.

The court said that the PTO’s actions were arbitrary and capricious in accepting Mr. Taylor’s deficient payment on the one hand, while on the other hand expiring his patent without notifying him under MPEP § 2531 (Notice of Non-Acceptance of Patent Maintenance Fee) that his payment was inadequate.

The PTO tried to weasel out of the suit saying it would refund the $1030 and said that Taylor could still file a petition — along with $200, of course — to have his patent reinstated for unavoidable delay. But, the USPTO then mused that even if the failure to properly pay the 7.5-year maintenance fee could be overlooked, Mr. Taylor has now also failed to pay the 11.5 year maintenance fee, and has also missed the deadline for reinstatement based on “unintentional delay” of that payment. Nice.

In the end, the Federal Circuit said that it wasn’t fair for the PTO to take Mr. Taylor’s payment without notifying him of the $10 shortfall and demanded an equitable remedy:

In this case, equity would counsel that the PTO should reinstate Mr. Taylor’s patent upon receipt of his payment for all outstanding maintenance fees. This relief will remedy, to this court’s best estimation, the PTO’s arbitrary and capricious actions.

While I feel bad for Mr. Taylor, the real issue here is why doesn’t the Patent Office put more procedures in place that make the application process more of a mutual partnership? Yes, Mr. Taylor paid the wrong amount. Yes, he used the wrong form. But, even very experienced attorneys make these kinds of mistakes.

The present case illustrated that the Patent Office needs to adopt more equitable rules and procedures for helping inventors correct mistakes in the first place so that valid patents issue. Shouldn’t the Patent Office be on the inventor’s side?

Are You Getting All The Patent Term You Should? Maybe Not.

Stephen Jenei — Wed, 22 Jul 2009 17:59:23 +0000

The U.S. Patent and Trademark Office has acknowledges that it might have been miscalculating patent term adjustment (PTA) for patents issued from 35 U.S.C. 371 national stage filings.

Fish & Richardson and their pharmaceutical client Japan Tobacco Inc. (JT) discovered a significant error in the manner by which the U.S. Patent and Trademark Office (PTO) calculates the amount of patent term adjustment to which a patent is entitled under 35 U.S.C. 154(b). This error is different than the one found in the Wyeth v. Dudas case (580 F. Supp. 2d 138), which concerned the PTO’s method of calculating overlap between “A Delay” (resulting from the PTO’s failure to issue actions within specified time frames) and “B Delay”(resulting from application pendency that exceeds three years).

Here, the error concerned how the PTO calculates the length of B Delay for patents granted from most 35 U.S.C. 371 national stage filings. The PTO’s practice has been to award B Delay beginning three years after completion of the requirements under 371(c) (e.g., submission of inventor’s oath or declaration).

However, the statute and regulations require that this period begin three years after the national stage has “commenced” under 35 U.S.C. 371(b) or (f). This commencement is often, though not always, prior to completion of the requirements under 371(c). As a result, PTA resulting from B Delay is often longer than that provided by the PTO’s practice. This difference can be many months or even more than a year.

The time at which the three year “B Delay” clock starts for a 371 national stage filing depends upon whether the national stage commences under 35 U.S.C. 371(b) or 35 U.S.C. 371(f).

35 U.S.C. 371(b)

The U.S. national stage commences under 35 U.S.C. 371(b) on the date that is 30 months from the priority date of a PCT application unless the applicant files an express request for early processing and completes the requirements of 371(c) prior to the 30 month date.

If an application is filed at the PTO without one or more of the items required by 371(c) (e.g., an inventor’s oath or declaration), the PTO issues a Notification of Missing Requirements. The PTO practice has been to start the B Delay clock three years after completion of the 371(c) requirements. However, the B Delay clock should have started three years after commencement. Here, months of potential PTA is lost by misapplication of the rule.

35 U.S.C. 371(f)

The B Delay clock can be started three years after a date that is before the 30 month date if the national stage is commenced under 371(f). This requires that that the applicant file an express request for early processing and complete the requirements of 371(c) prior to the 30 month date. If either one of these requirements is not met, then the national stage (and the reference date the B Delay clock) will commence on the date that is 30 months from the priority date of the PCT application.

For biotech and pharma patents in particular, these additional days of patent term can be of significant value since every day represents significant sales. There are currently over 100 “blockbuster” drugs — those drugs with $1 billion annual sales or more. That works out to over $2.7 million in sales per day.

Fish & Richardson challenged the PTO’s practice on behalf of one of JT’s patents and has recently received a favorable Decision from the Office of Petitions. The USPTO intends to eventually change its internal system to apply the correct PTA calculation method going forward.

However, you should confirm the PTA term for all patents derived from 371 national stage filings.

Fish & Richardson now has a page explaining how to correctly measure this B delay.

(via Fish & Richardson)

Merck’s Patent Challenged On $50K Bounty

Stephen Jenei — Tue, 02 Jun 2009 02:01:58 +0000

The U.S. Patent and Trademark Office (PTO) ordered the reexamination of Merck’s biggest selling product, Singulair. The challenged patent, U.S. Patent No. 5,565,473 (“Unsaturated Hydroxyalkylquinoline Acids as Leukotriene Antagonists,” issued October 15, 1996), covers montelukast sodium, the active ingredient in the $4.5 billion-a-year allergy and asthma drug.

The request for reexam, No. 90/009,432, was made by an online community called Article One Partners LLC that recruits scientists worldwide to look for evidence patents have been improperly issued. Article One Partners, a for-profit group formed by a group of patent attorneys and financial advisors, offered a $50,000 bounty for anyone who could come up with invalidating prior art.

The winning Advisors were a U.S. graduate student and an Advisor from Columbia, South America. The U.S. graduate student was first to submit winning prior art (the Young journal article) and earned $35,000. The South American Advisor was the second to submit winning prior art (the Young patent), earning $15,000.

The USPTO’s reexamination is in parallel to a pending court case where a ruling is expected from a trial in which Merck is asserting the patent against Teva Pharmaceuticals, who is challenging the patent. The ‘473 patent was originally set to expire in 2010 but was eligible for patent term extension under 35 U.S.C. § 156 of 430 days. The patent would expire on February 3,2012, if it survives.

Generic drug makers probably shouldn’t start stocking shelves with their own version of the drug just yet. For starters, the USPTO is taking about 24 months to decide ex parte reexaminations. In addition, claims 1, 7, 18-22 (as asserted by Merck against Teva) could survive the reexam as valid and enforceable in one form or another. Even if it does not issue in its current state, it could issue with modified claims that provide substantial coverage necessary to protect the product.

The determination of winners by Article One was by analysis, including review and analysis of an independent law firm and a separate independent expert, leading Article One to reach the opinion that the prior art raises a substantial new question of validity for the ’473 patent.

For “a substantial new question of patentability” to be present in order to provoke a reexamination, it is only necessary a challenger show that:

The prior art patents and/or printed publications raise a substantial question of patentability regarding at least one claim, i.e., the teaching of the prior art) patents and printed publications is such that a reasonable examiner would consider the teaching to be important in deciding whether or not the claim is patentable; it is not necessary that the prior art establish a prima facie case of unpatentability; and
The same question of patentability as to the claim has not been decided by the Office in a previous examination or pending reexamination of the patent or in a final holding of invalidity by the Federal Courts in a decision on the merits involving the claim.

In regards to the Young References (US 5,104,882), the patent generically discloses diarylstrylquinoline diacids and pharmaceutical composition thereof. These compounds are leukotriene antagonists and inhibitors of leukotriene biosynthesis and are useful for treating asthma.

The Examiner determined that there is a substantial likelihood that a reasonable examiner would consider this teaching important in deciding whether or not claims 1, 7, 18-22 are patentable. The reference was cited, but was not applied during the prosecution of the patent. It is now being viewed in new light in combination with other references including “The Development of New Anti- Leukotriene Drugs: L-648,051 and L-649,923, Specific Leukotriene D4 Antagonists,” by Robert Young.

So, what does Article One get out of all this? From their web site:

How does AOP make money?

AOP has 2 streams of revenue: 1. Our prior art collections can be sold directly to parties interested in the subject patent(s). 2. The research also allows us to execute market trades based on the expert analysis and opinions drawn from our Advisors’ research.