109318After receiving my copy of “How to Write a Patent Application” (Jeffrey G. Sheldon, Second Edition), I changed my opinion about it. I’ve certainly used the first edition over the years. However, I thought of it as a book intended for beginning patent practitioners to use as a handbook for learning patent application drafting. Yes, this massive 1268 page tome is a fantastic manual for teaching new and developing patent attorneys and agents — and as study material for the registration examination with the USPTO. But, I find myself learning (and re-learning) tidbits all the time.

While this book won’t train someone by itself, it is an invaluable tool for learning the ins and outs of patent drafting. Sheldon himself notes:

This book should not be used alone to learn how to write a patent application. No one can expect to read this book and be able to sit down and write a satisfactory patent application. The guidance, assistance, and tutelage of a skilled practitioner will be needed.

The goal of patent application drafting is always to end up with a patent that is both held valid by the courts and infringed by competitors. If missing one of these two items, the patent is worthless. The Sheldon book helps anyone with this goal in mind.

I find that every time I leaf through the book, I am reminded of one concept of another that I need to consider when drafting an application. For example, in a section on Functional Language, Sheldon writes:

Functional statements should be placed either at the end of the description of the particular element after everything necessary to support the functional clause has been set out, or at the end of the claim when all the elements of the claim are necessary to support the functional expression. In general, a claim is easier to follow when the function of an element is recited immediately after the element itself. Also, a claim is less likely to be considered overly broad when the functions are set out one at a time rather than at the end of the claim.

“Whereby” Clauses

“Whereby” and “thereby” clauses are proper only when they describe a function or result that necessarily follows from a previously recited structure. Unlike a means clause, the “whereby” clause has been judicially construed not to define any structure. Thus, a “whereby” clause in a means-pIus-function clause merely states the result of the limitations in the means clause, and adds nothing of substance to the claim.

Accordingly, a “whereby” clause must be preceded by some recitation of structure. Such clauses should only be used when the equivalent phrase “it follows from the foregoing that” can be used to replace he “whereby” clause.

How to Write a Patent Application is an invaluable resource for reviewing topics and re-thinking procedures that may be followed more out of old habit than thoughtful reflection. As pointed out by the author, if your invention is worth filing a patent application, it is worth hiring a skilled practitioner to make certain that the application adequately claims the invention and meets the statutory requirements for a patent application. A poorly written and inadequate patent application will provide a false sense of security and in the long run probably cost much more money. Or even everything.

The book covers diverse topics beyond just preparing the specification and claims including design and plant patent applications as well as preparing foreign patent applications based on a U.S. application. Of course, the book could certainly cover yet further topics. I know some people have said that the book should include information on strategies for responding to Office Actions, like §103 obviousness rejections, the book really is just for drafting the application. I highly recommend this book to any practitioner at any level.

While not a book to read in one sitting, it has a place on everyone’s shelf.

You can get your own copy here: How to Write a Patent Application” (Jeffrey G. Sheldon, Second Edition), Practicing Law Institute; April 24, 2010; 1268 pages.

About the Author

Author Jeffrey Sheldon is the founding partner of Sheldon Mak & Anderson PC, an intellectual property law firm with offices in Pasadena, California. Mr. Sheldon is a summa cum laude graduate of Loyola Law School. He has a Bachelor of Science degree in Chemical Engineering from the Carnegie Institute of Technology, and a Master of Science degree in Biomedical Engineering from the University of Strathclyde, Glasgow, Scotland. He has been adjunct professor in intellectual property law and patent law at Southwestern University Law School and advanced patent law at Loyola University, both in Los Angeles. He is a frequent lecturer for Practising Law Institute and other organizations.

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What:

American Conference Institute’s FDA Boot Camp.  Basic training in core regulatory concepts for life sciences lawyers, business executives and policy analysts.

bigstock-Military-men-26612090The approval process…pre-approval concerns…product labeling… clinical trials…adverse events reports… patent concerns… exclusivity. — all are critical aspects in the commercialization process for drugs, biologics, and devices which are governed by FDA law and regulation. Recent court cases, and high profile trials concerning FDA-regulated products have made it clear that it is essential for attorneys who do not have regulatory practices — but who do deal with FDA-regulated products — to have a familiarity with these concepts. The changing business dynamics of the life sciences industry have also made it critical for business executives, policy analysts and securities experts who work in this field to have a clear understanding of the dynamics of the FDA.

Litigation as well as numerous other legal, business, and policy decisions concerning FDA-regulated products often hinge on what happened during the pre-approval, approval, or post-approval periods.r business executives, policy analysts and securities experts who work in this field to have a clear understanding of the dynamics of the FDA.

Many products liability lawyers, patent counsel, business and investment experts, medical and regulatory affairs professionals, and those involved in pricing and reimbursement — despite their tenure in working with FDA regulated products — are not well-versed in the essentials of the approval process and the regulatory hurdles of the post-approval period. Whether you are a products liability or patent litigator, in-house counsel, in-house business development or federal affairs professional, FDA Boot Camp will provide you the insights you need.

When:

Tuesday, September 17 to Wednesday, September 18, 2013

Where:

Omni Parker House, Boston, MA

But wait, that’s not all:

Boost your FDA regulatory IQ Learn about the FDA approval process and the ins and outs of post-approval challenges

untitledACI’s FDA Boot Camp has been designed to give products or patent litigators, as well as patent prosecutors, industry in-house counsel, and life sciences investment and securities experts, a strong working knowledge of core FDA competencies.

A distinguished faculty of top FDA regulatory experts — a “Who’s Who of the FDA Bar” — will share their knowledge and give you critical insights on:

  • The organization, jurisdiction, functions, and operations of the FDA
  • The essentials of the approval process for drugs, biologics, and devices, including:   NDAs – OTC Approval; INDs; 510(k) submissions; BLAs; PMA process
  • Clinical trials for drugs and biologics and the clearance process for devices
  • The classification of devices and the concept of “risk-based” classification
  • The role of the Hatch-Waxman Act in the patenting of drugs and biologics
  • Labeling in the drug and biologics approval process
  • cGMPs and other manufacturing concerns relative to products liability
  • Proactive adverse events monitoring and signal detection
  • Recalls, product withdrawals, and FDA oversight authority

Attend the pre-conference workshop or post-conference master classes to get the background and/or the in-depth information you need to maximize your learning and networking experience at this event!

Workshop A: Fundamentals of FDA Regulatory Law will address topics to set the stage for the main conference by helping you thoroughly comprehend the structure of the FDA and the essentials of the pre-approval, approval, and post-approval process. Get the background you need to flow seamlessly into the conversations at FDA Boot Camp.

Master Class B: Hatch-Waxman and BPCIA: Overview of Biosimilars and Life Cycle Planning for Drugs and Biologics will provide an in-depth overview of biosimilars as well as analyses of bioequivalency and exclusivities and their role in patent and product life cycle management.

Master Class C: Post-Approval Marketing Guidance and Preemption Protocols will address issues that arise post-approval, including advertising, promotion, and off -label promotion and enforcement, as well as preemption fundamentals.

Attend this conference and learn to navigate your way through the regulatory maze that plays such a crucial role to your cases and practice areas. Seats at prior iterations of ACI’s FDA Boot Camp sold out. Don’t delay — register now calling 888-224-2480, faxing your form to 877-927-1563 or online at www.AmericanConference.com/FDABootCampBoston


image credit: military men from bigstock

PatentBaristas.com is a Media Sponsor of this event.  Readers of Patent Baristas are entitled to $200 off the current conference price tier.   The discount code you will need for this is: PB 200.

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John F. Lewis, Jr. has been appointed as the new president and CEO of BioOhio, Ohio’s bioscience trade association. Lewis succeeds Anthony J. Dennis, Ph.D., who announced his retirement in April.  He was named BioOhio’s fourth president after Dorothy Baunach, Frank Samuels and Dr. Dennis.

johllewisLewis has led bioscience-focused trade missions to Germany, Japan, China, Taiwan, France and Israel. In concert with key BioOhio partners, Lewis helped to market Ohio companies internationally as well as to attract global companies to locate new operations in Ohio. Through BioOhio participation in global exhibitions, more than 72 companies have been attracted to Ohio in the past six years.

Lewis is a Bexley, OH native and graduate of Miami University and Capital University Law School. He is a licensed attorney, an experienced entrepreneur, and a passionate advocate for all things “bio in Ohio.”  He has helped raise more than $1.3 billion for Ohio’s emerging bio companies and is a founding partner of the Ohio TechAngel Fund (OTAF), the largest Angel fund in the U.S. and one of the largest in the world.

An annual BioOhio study started by Lewis in 2004 and produced in partnership with researchers from Cleveland State University, shows the total economic impact of Ohio’s bioscience industry is estimated at $54 billion. Over the past decade, employment in Ohio’s bioscience sector has outpaced general employment by 27% and the rate of start-up company formation has increased ten-fold. Since 2002, BioOhio has grown to include 430 members that represent all regions of the state and all major industry sectors.

As a trade association with 430 members, BioOhio is the lead organization for the Ohio bioscience community and is the Ohio affiliate for global bioscience industry organizations including BIO, AdvaMed, PhRMA and MDMA.

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Google.com today put up a special logo depicting the Tesla coil created by Nikola Tesla.  Tesla was born on July 10, 1856 and he passed away on January 7, 1943.  Without going into the whole Tesla is greater than Edison debate, most people think we would not have had electricity as early as we did but for Tesla.

US390721_Page_1Without doubt, Tesla was a genius beyond compare.  Serbian-American engineer and physicist Nikola Tesla made dozens of breakthroughs in the production, transmission and application of electric power. He invented the first alternating current (AC) motor and developed AC generation and transmission technology. Though he was famous and respected, he was never able to translate his copious inventions into  long-term financial success like Edison.

Tesla held around 700 patents in 26 countries including the tesla coil, alternating currents, robots, spark plugs, electric arc lamp, devices for X-ray and the bladeless turbine.  In 1943, the Supreme Court invalided Italian inventor Guglielmo Marconi’s patents for the radio and radio equipment and giving credit to Tesla based on his patents that predated Marconi’s.

For more on the Tesla as overlooked genius (and Edison as douchebag), you can see the great graphic “Why Nikola Tesla was the greatest geek who ever lived.”

But, see the rebuttal at: “Nikola Tesla Wasn’t God And Thomas Edison Wasn’t The Devil.”

If you want to learn more about Tesla, see: Tesla: Man Out of Time

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bigstock-Declaration-of-Independence-20186213IN CONGRESS, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.–Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For Quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his Protection and waging War against us.
He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.


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In a unanimous decision, the Supreme Court ruled against Myriad Genetics saying that the company cannot patent natural DNA.  Association for Molecular Pathology et al., v. Myriad Genetics, Inc., et al.  (SCt 12-398_8njq; No. 12–398, June 13, 2013).

The District Court concluded that Myriad’s claims were invalid because they covered products of nature. The Federal Circuit initially reversed, but on remand in light of Mayo v. Prometheus Labs, found both isolated DNA and cDNA patent eligible.

The Supreme Court looked at only one question:

Are human genes patentable?

Now, the Supreme Court has held that naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but cDNA is patent eligible because it is not naturally occurring.

Importantly, the Court noted:

(a) cDNA is not a “product of nature,” so it is patent eligible under§101. cDNA does not present the same obstacles to patentability as naturally occurring, isolated DNA segments.

(b) This case, it is important to note, does not involve method claims, patents on new applications of knowledge about the BRCA1 and BRCA2 genes, or the patentability of DNA in which the order of the naturally occurring nucleotides has been altered.

Under the Patent Act, “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.” 35 U.S.C. § 101.

ex-13016921Myriad discovered the precise location and sequence of what are now known as the BRCA1 and BRCA2 genes. Mutations in these genes can dramatically increase an individual’s risk of developing breast and ovarian cancer.  Knowledge of the location of the BRCA1 and BRCA2 genes allowed Myriad to develop medical tests that are useful for detecting mutations in a patient’s BRCA1 and BRCA2 genes and thereby assessing whether the patient has an increased risk of cancer.

Myriad obtained patents on two “isolated” human genes, BRCA1 and BRCA2 and certain mutations in these genes associated with a predisposition to breast and ovarian cancers. Representative composition claims include claims 1, 2, and 5 of the ’282 patent:

1.  An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.

2.  The isolated DNA of claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID NO:1.

5.  An isolated DNA having at least 15 nucleotides of the DNA of claim 1.

Myriad’s patents would, if valid, give it the exclusive right to isolate an individual’s BRCA1 and BRCA2 genes (or any strand of 15 or more nucleotides within the genes) by breaking the covalent bonds that connect the DNA to the rest of the individual’s genome. The patents would also give Myriad the exclusive right to synthetically create BRCA cDNA.

Below, the Court explains it’s decision:

It is undisputed that Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 genes. The location and order of the nucleotides existed in nature before Myriad found them. Nor did Myriad create or alter the genetic structure of DNA. Instead, Myriad’s principal contribution was uncovering the precise location and genetic sequence of the BRCA1 and BRCA2 genes within chromosomes 17 and 13. The question is whether this renders the genes patentable.

Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the §101 inquiry. In Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U. S. 127 (1948),this Court considered a composition patent that claimed a mixture of naturally occurring strains of bacteria that helped leguminous plants take nitrogen from the air and fix it in the soil. Id., at 128–129. The ability of the bacteria to fix nitrogen was well known, and farmers commonly “inoculated” their crops with them to improve soil nitrogen 13 Cite as: 569 U. S. ____ (2013) levels. But farmers could not use the same inoculant for all crops, both because plants use different bacteria and because certain bacteria inhibit each other. Id., at 129–130. Upon learning that several nitrogen-fixing bacteria did not inhibit each other, however, the patent applicant combined them into a single inoculant and obtained a patent. Id., at 130. The Court held that the composition was not patent eligible because the patent holder did not alter the bacteria in any way. Id., at 132 (“There is no way in which we could call [the bacteria mixture a product of invention] unless we borrowed invention from the discovery of the natural principle itself ”). His patent claim thus fell squarely within the law of nature exception. So do Myriad’s. Myriad found the location of the BRCA1 andBRCA2 genes, but that discovery, by itself, does not render the BRCA genes “new . . . composition[s] of matter,” §101, that are patent eligible.

Indeed, Myriad’s patent descriptions highlight the problem with its claims.

The Court also spelled out what remains patent eligible:

cDNA does not present the same obstacles to patentability as naturally occurring, isolated DNA segments. As already explained, creation of a cDNA sequence from mRNA results in an exons-only molecule that is not naturally occurring.8 Petitioners concede that cDNA differs from natural DNA in that “the non-coding regions have been removed.” Brief for Petitioners 49. They nevertheless argue that cDNA is not patent eligible because “[t]he nucleotide sequence of cDNA is dictated by nature, not by the lab technician.” Id., at 51. That may be so, but the lab technician unquestionably creates something new when cDNA is made. cDNA retains the naturally occurring exons of DNA, but it is distinct from the DNA from which it was derived. As a result, cDNA is not a “product of nature” and is patent eligible under §101, except insofar as very short series of DNA may have no intervening introns to remove when creating cDNA. In that situation, a short strand of cDNA may be indistinguishable from natural DNA.9

It is important to note what is not implicated by this decision. First, there are no method claims before this Court. Had Myriad created an innovative method of manipulating genes while searching for the BRCA1 and BRCA2 genes, it could possibly have sought a method patent. But the processes used by Myriad to isolate DNA were well understood by geneticists at the time of Myriad’s patents “were well understood, widely used, and fairly uniform insofar as any scientist engaged in the search for a gene would likely have utilized a similar approach,” 702 F. Supp. 2d, at 202–203, and are not at issue in this case. Similarly, this case does not involve patents on new applications of knowledge about the BRCA1 and BRCA2 genes. Judge Bryson aptly noted that, “[a]s the first party with knowledge of the [BRCA1 and BRCA2] sequences,

Nor do we consider the patentability of DNA in which the order of the naturally occurring nucleotides has been altered. Scientific alteration of the genetic code presents a different inquiry, and we express no opinion about the application of §101 to such endeavors. We merely hold that genes and the information they encode are not patent eligible under §101 simply because they have been isolated from the surrounding genetic material.

Clearly, the market recognized that the decision does not eliminate the ability to patent diagnostic tests.  Shares of Myriad Genetics (MYGN) jumped nearly 11% to a four-year high in morning trading Thursday after the U.S. Supreme Court issued the mixed ruling on whether its genetic products could be patented and affirmed the right for Myriad to patent synthetic DNA (cDNA).

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American Conference Institute’s Advanced Summit on Global Patenting Strategy & Practice unites seasoned counsel with experience practicing in critical jurisdictions to share their wealth of knowledge and help you understand not only the mechanics of obtaining patents around the world, but also strategies for the most effective and efficient means of protecting IP in a global marketplace.

Monday, July 15 to Tuesday, July 16, 2013 at the Carlton Hotel, New York, NY

untitledRepresenting companies in an array of industry sectors, expert faculty will address questions like:

  • How do you select the right local counsel depending on your needs?
  • What jurisdictions provide effective patent protection for your products and which ones do not and what are
    the specific costs involved?
  • How to reconcile the issues that arise when coordinating with inventors in numerous countries simultaneously?
  • What written description requirements meet the standards required by multiple jurisdictions including the EU
    and Asian countries?
  • When do outcomes from opposition proceedings in one jurisdiction impact the ability to protect a product in others?
  • Can evidence obtained in one country be used in litigation for other countries?
    And much more!

Enhance your conference experience by attending the post conference workshops:

    • Mastering the Foreign Patent Law and Regulatory Requirements for Life Sciences Companies in a Global Context and the Post Conference Interactive Working Group Session
    • Negotiating the Obstacles and Challenges Associated with Patenting a Product in Numerous Jurisdictions

Reserve your spot by calling 888-224-2480 or online here.

**Note:  Readers of Patent Baristas get a $200 discount by entering the discount code “PB200″ during registration.

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The White House announced plans for a set of executive actions President Barack Obama will take that are aimed at reining in certain patent-holding firms, known as “patent trolls.”

[I]nnovators continue to face challenges from Patent Assertion Entities (PAEs), companies that, in the President’s words “don’t actually produce anything themselves,” and instead develop a business model “to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.” These entities are commonly known as “patent trolls.” Likewise, the so-called “Smartphone Patent Wars” have ballooned in recent years and today, several major companies spend more on patent litigation and defensive acquisition than on research and development.

To help deter some lawsuits, the administration plans to direct the U.S. Patent and Trademark Office to start a rule-making process aimed at requiring patent holders to disclose the owner of a patent.

LEGISLATIVE RECOMMENDATIONS

Souvenir trollsThe Administration recommends that Congress pursue at least seven legislative measures:

  1. Require patentees and applicants to disclose the “Real Party-in-Interest,” by requiring that any party sending demand letters, filing an infringement suit or seeking PTO review of a patent to file updated ownership information, and enabling the PTO or district courts to impose sanctions for non-compliance. [You should not be able to sell/transfer private property.]
  2. Permit more discretion in awarding fees to prevailing parties in patent cases, providing district courts with more discretion to award attorney’s fees under 35 USC 285 as a sanction for abusive court filings (similar to the legal standard that applies in copyright infringement cases).  [You should be punished for losing to a well-financed opponent.]
  3. Expand the PTO’s transitional program for covered business method patents to include a broader category of computer-enabled patents and permit a wider range of challengers to petition for review of issued patents before the Patent Trial and Appeals Board (PTAB).  [Because business methods are less worthy.]
  4. Protect off-the-shelf use by consumers and businesses by providing them with better legal protection against liability for a product being used off-the-shelf and solely for its intended use. Also, stay judicial proceedings against such consumers when an infringement suit has also been brought against a vendor, retailer, or manufacturer. [Because, hey, if you can construct a patented device by buying the parts from someone else, go for it.]
  5. Change the ITC standard for obtaining an injunction to better align it with the traditional four-factor test in eBay Inc. v. MercExchange, to enhance consistency in the standards applied at the ITC and district courts. [Why should plaintiff’s being harmed be able to avail themselves of a quicker venue?  It just makes our clogged court system look worse.]
  6. Use demand letter transparency to help curb abusive suits, incentivizing public filing of demand letters in a way that makes them accessible and searchable to the public.  [We should always discourage private settlements of disputes.]
  7. Ensure the ITC has adequate flexibility in hiring qualified Administrative Law Judges. [Qualified employees are always good.]

The $64,000 Question:  Is all this really going to change anything?  And, will individual inventors (who don’t make a product) be thrown under the bus?

EXECUTIVE ACTIONS

The Administration is also announcing a number of steps it is taking to help what it says will level the playing field for innovators. Those steps include:

  1. Making “Real Party-in-Interest” the New Default. Patent trolls often set up shell companies to hide their activities and enable their abusive litigation and extraction of settlements. This tactic prevents those facing litigation from knowing the full extent of the patents that their adversaries hold when negotiating settlements, or even knowing connections between multiple trolls. Today, the PTO will begin a rulemaking process to require patent applicants and owners to regularly update ownership information when they are involved in proceedings before the PTO, specifically designating the “ultimate parent entity” in control of the patent or application.
  2. Tightening Functional Claiming. The AIA made important improvements to the examination process and overall patent quality, but stakeholders remain concerned about patents with overly broad claims — particularly in the context of software. The PTO will provide new targeted training to its examiners on scrutiny of functional claims and will, over the next six months develop strategies to improve claim clarity, such as by use of glossaries in patent specifications to assist examiners in the software field.
  3. Empowering Downstream Users. Patent trolls are increasingly targeting Main Street retailers, consumers and other end-users of products containing patented technology — for instance, for using point-of-sale software or a particular business method. End-users should not be subject to lawsuits for simply using a product as intended, and need an easier way to know their rights before entering into costly litigation or settlement. Today, the PTO is announcing new education and outreach materials, including an accessible, plain-English web site offering answers to common questions by those facing demands from a possible troll.
  4. Expanding Dedicated Outreach and Study. Challenges to U.S. innovation using tools available in the patent space are particularly dynamic, and require both dedicated attention and meaningful data. Engagement with stakeholders — including patent holders, research institutions, consumer advocates, public interest groups, and the general public — is also an important part of our work moving forward. Roundtables and workshops that the PTO, DOJ, and FTC have held in 2012 have offered invaluable input to this process. Today, we are announcing an expansion of our outreach efforts, including six months of high-profile events across the country to develop new ideas and consensus around updates to patent policies and laws. We are also announcing an expansion of the PTO Edison Scholars Program, which will bring distinguished academic experts to the PTO to develop — and make available to the public — more robust data and research on the issues bearing on abusive litigation.
  5. Strengthen Enforcement Process of Exclusion Orders. Once the U.S. International Trade Commission (ITC) finds a violation of Section 337 and issues an exclusion order barring the importation of infringing goods, Customs and Border Protection (CBP) and the ITC are responsible for determining whether imported articles fall within the scope of the exclusion order. Implementing these orders present unique challenges given these shared responsibilities and the complexity of making this determination, particularly in cases in which a technologically sophisticated product such as a smartphone has been successfully redesigned to not fall within the scope of the exclusion order. To address this concern, the U.S. Intellectual Property Enforcement Coordinator will launch an interagency review of existing procedures that CBP and the ITC use to evaluate the scope of exclusion orders and work to ensure the process and standards utilized during exclusion order enforcement activities are transparent, effective, and efficient.

See the entire memo here.

image credit: troll image from bigstock

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