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 »

The National Law Journal is reporting that the U.S. Patent and Trademark Office may have unconstitutional appointments of nearly two-thirds of its patent appeals judges and nearly half of the trademark appeals judges. This could call into question the validity of hundreds of decisions over the last eight years.

The flaw, brought to light by highly Prof. John Duffy of George Washington University Law School, was raised in a petition filed in the U.S. Supreme Court by a company whose patent was rejected by a three-judge Board of Patent Appeals and Interferences panel. That panel decision was subsequently affirmed by the U.S. Court of Appeals for the Federal Circuit, which set aside an $86.5 million infringement verdict won by the company. The petition contends that one of the three panel judges in its case was named to the board in violation of the Constitution’s appointments clause.

The petition relies on a Patently-O Patent Law Journal article Prof. Duffy wrote challenging the constitutionality of the current system. The dust-up was precipitated by Intellectual Property and Communications Reform Act of 1999, which transferred the power to appoint BPAI judges from the secretary of Commerce to the PTO director.

But, BPAI judges qualify as inferior officers under the appointments clause and the clause requires that inferior officers be appointed either by the president, the courts of law or heads of departments. The PTO director is not a head of a department.

Bummer.

Pending patent reform legislation, which appears stalled if not dead, would return the appointment power to the Commerce secretary not only for the BPAI but also for the Trademark Trial and Appeal Board.

The PTO had no comment.

See also:

CAFC Judge Linn Expresses Disappointment over Failures by the BPAI and Patent Bar

Challenge to BPAI Appointments Moves to Supreme Court

Posted April 28th, 2008 by Stephen Albainy-Jenei in USPTO
| | 2 Comments »

Greg Aharonian at Internet Patent News Service posted a note about a possible increase in double-patenting rejections as the U.S. Patent Office. In a complaint he received, a reader questions whether this is an orchestrated implementation of “directives to frustrate patent applicants to achieve their misguided purpose.”

As an example, the reader noted that the Patent Office seems to be (undeservedly) dishing out more statutory double patenting rejections. Although the example dealt with claims directed to computer readable storage media and accompanying systems and methods, this can also be a problem in the bio/pharma where drug companies are constantly trying to file patent applications on continued changes and improvements in order to capture or retain market share.

Basically, the law provides that an applicant may only obtain a single patent for an invention. 35 USC 101 provides:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

Thus, a statutory double patenting rejection comes up when the applicant tries to claim the exact same invention. The purpose, of course, is to prevent a patentee from receiving multiple patents for the same invention and thus gaining an illegal extension of patent term. Therefore, a pharmaceutical company can only be able to prevent generic entry for a period of 20 years from the filing date of the application (albeit with certain extensions available).

One quick test of whether or not there’s a problem is to ask:

1. Is there an embodiment that falls within the scope of one claim, but not the other?
2. Could one claim be literally infringed without literally infringing the other claim?

Since bio & pharma patents seem to be under seige, I’m curious if others have experienced an uptick in statutory-type double patenting rejections?

Let us know.

more at twiigs.com…

Posted April 23rd, 2008 by Stephen Albainy-Jenei in Prosecution, USPTO
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The United States Patent and Trademark Office (USPTO) has published updated patent examiner training materials regarding the examination of patent applications under the written description requirement (35 U.S.C. § 112, first paragraph).  That is, in order to obtain a valid patent, an applicant must include in a description adequately disclosing the invention and how to make and use it. 

USPTO Commissioner for Patents John Doll said, “These training materials will improve the quality and consistency of patent examination, as well as provide guidance to practitioners for the drafting of patent applications and responses to examiners.”  We’ll see.

As discussed earlier, the examination of patent claims for compliance with the Written Description Requirement should include:

1. A determination as to what the claim as a whole covers. In making this determination, the examiner should consider and discuss the full scope of the claim.

2. A full review of the application to understand how the applicant provides support for the claimed invention including each element and/or step. This review includes comparing the claim scope with the scope of the description.

3. A determination as to whether one skilled in the art would recognize that the applicant was in possession of the claimed invention as a whole at the time of filing. This determination should include the following considerations:

a. Actual reduction to practice,

b. Disclosure of drawings or structural chemical formulas,

c. Sufficient relevant identifying characteristics, such as: i. Complete structure, ii. Partial structure, iii. Physical and/or chemical properties, iv. Functional characteristics when coupled with a known or disclosed correlation between function and structure

d. Method of making the claimed invention,

e. Level of skill and knowledge in the art and

f. Predictability in the art.

4. For each claim drawn to a single embodiment or species, consider the above factors in regard to that embodiment or species to determine whether one of ordinary skill in the art would recognize that the applicant was in possession of the species or embodiment at the time of filing.

5. For each claim drawn to a genus, consider each of the above factors to determine whether there is disclosure of a representative number of species which would lead one skilled in the art to conclude that the applicant was in possession of the claimed invention. The number of species required to represent a genus will vary, depending on the level of skill and knowledge in the art and the variability among the claimed genus. For instance, fewer species will be required where the skill and knowledge in the art is high, and more species will be required where the claimed genus is highly variable.

More to come.

Download the training materials here.

Posted April 23rd, 2008 by Stephen Albainy-Jenei in Prosecution, USPTO
| | 1 Comment »

The United States Patent and Trademark Office (USPTO) is initiating a pilot program in which the applicant who complies with certain requirements will receive the results of a prior art search conducted by the examiner, via a condensed Pre-Interview Communication, and then be permitted to conduct an interview with the examiner to discuss the cited prior art references prior to the first Office action on the merits (see flow chart).

The requirements for the pilot program are set forth in the notice entitled “First Action Interview Pilot Program” (available here). An interview under this pilot program would advance prosecution of the application because it would enhance the interactions between the applicant and the examiner, provide applicant the opportunity to resolve patentability issues one-on-one with the examiner at the beginning of the prosecution process, and facilitate possible early allowance.

Bio/Pharma people are SOL, though.  The pilot program is only for applications that are either (1) classified in Class 709 (Electrical Computers and Digital Processing Systems: Multi-Computer Data Transferring) and assigned to an art unit in either group 2140 or 2150; or (2) classified in Class 707 (Data Processing: Database and File Management or Data Structures) and assigned to an art unit in group 2160.

Currently, granting an interview before first action on the merits of a new application is within the discretion of the examiner, who has not yet searched the case, and a showing may be required to justify the granting of the interview. See MPEP § 713.02. The pilot program provides a procedure which, if followed, makes the granting of an interview non-discretionary.

The effective date for this change in practice is: 28 April 2008.

Posted April 16th, 2008 by Stephen Albainy-Jenei in USPTO
| | 2 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 »

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 »