Fed. Cir.: Actions of Non-Inventor/Attorney Leads To Inequitable Conduct

Avid Identification Sys. v. Crystal Import Corp., No. 09-1216 (April 27, 2010)

Avid brought suit against Datamars alleging infringement of a patent directed to an RFID system for reading encoded implant chips.   The patent was found valid and infringed, but was unenforceable for inequitable conduct committed by Dr. Stoddard, who was president and founder of Avid, but was not an inventor of the patent.

During development of the product from which the patent was based on, Stoddard demonstrated an early version of the technology at a trade show more than one year prior to the filing date of the patent.  There was no evidence indicating that the inventors or the prosecuting attorney knew about the demonstration.   Stoddard admitted to witholding this information from the USPTO, but argued that, as a non-inventor/prosecuting attorney, he did not owe a duty of candor to the USPTO.

37 C.F.R. § 1.56 imposes a duty to disclose information to the PTO, when an individual is (1) associated with the filing and prosecution of a patent application, and (2) knows that the information is question is material.  For purposes of identifying who owes a duty of candor to the PTO, Rule 56 defines “individual[s] associated with the filing or prosecution of a patent application” as (1) each named inventor, (2) each attorney or agent that prepares or prosecutes the application, and (3) every other person who is substantively involved in the preparation.  or prosecution of the application and who is associated with the inventor or assignee. 37 C.F.R. § 1.56(c). Individuals other than the attorney, agent, or inventor, who are “substantively involved in the preparation or prosecution of the application,” may comply with their duty of candor by disclosing known material information to one of the attorney, agent, or inventor.

Thus, the question was whether Stoddard was "substantively involved" in the prosecution, and whether the specific demonstration was "material."

On materiality, Avid argued that the trade show demonstration was submitted to the jury during litigation, and it found that  the demonstrated product did not contain all the elements of the patent claims.  The court nevertheless dismissed this argument:

Such arguments [] confuse the concepts of “material” and “invalidating.” We have often held that a reasonable examiner may find a particular piece of information important to a determination of patentability, even if that piece of information does not actually invalidate the patent . . . The district court found that sales demonstrations would be important to a determination of patentability under § 102(b) . . . The district court found that the precursor product, while not invalidating, reflected the closest prior art, and thus was highly material to patentability. We hold that the district court’s analysis of materiality is not clearly erroneous.

Additionally, the court affirmed that Dr. Stoddard was "substantively involved" based on a number of factors:

- He was the president and founder of Avid, a closely held company; Dr. Stoddard was also  “involved in all aspects of the company’s operation, from marketing and sales to research and development.”

- Stoddard hired the inventors to reduce his encrypted chip concept to practice;

- Stoddard received communications from inventors regarding EPO prosecution of the patents.  The district court stated that the communications "contributed to an inference that Dr. Stoddard was substantively involved in patent matters related to the identification chip system."

-  The district court also determined that "Dr. Stoddard’s testimony at trial was not credible, his memory of facts was suspiciously selective, and he refused to acknowledge certain incontrovertible events."

The majority opinion stated:

Although Dr. Stoddard did not contribute enough to the patentable features of the claims to be considered an inventor, the functionality of the system described in the ’326 patent was his idea. The inventors he hired were specifically instructed to reduce his idea to practice. Dr. Stoddard’s inclusion on substantive communications related to the preparation of the European counterpart to the ’326 patent application further support the more general conclusion that he was substantively involved in preparation of the patent application covering the system he conceived.

Under the terms of Rule 56, the PTO does not assign a duty of candor to persons not associated with a patent application, or to those involved only in a ministerial capacity. Such persons would not be in a position to appreciate that their conduct or knowledge might be relevant to the PTO. The district court did not clearly err in determining that Dr. Stoddard was not such an exempt person. Indeed, to accept Avid’s argument that a person such as Dr. Stoddard owes no duty of candor would allow intentional deception by the types of people most likely to have knowledge of § 102(b) prior art, i.e., those on the commercial side of patented product development.

AFFIRMED
 
LINN DISSENT:

In my view, the district court both misapplied Rule 56(c)(3) and clearly erred in finding that Dr. Stoddard was “substantively involved in the preparation or prosecution of the application.” Accordingly, I would reverse the determination that the ’326 patent is unenforceable due to inequitable conduct. 

* * *

The obligation imposed by the duty of candor is to disclose to the PTO information “material to patentability.” 37 C.F.R. § 1.56(a). Because one cannot assess whether information is “material to patentability” without knowledge of the technical details or legal merits of an application, it should be self-evident that when Rule 56(c)(3) talks about persons who are “substantively involved” it is referring to those persons who are both (1) engaged in the preparation or prosecution of an application and (2) sufficiently apprised of the technical details or legal merits of the application as to be able to assess the materiality of any information they may know or discover as the application is prepared or prosecuted. This naturally excludes not only the “typists, clerks, and similar personnel who assist with the application” in a non-substantive way  . . . but also corporate officers, managers, employees, and all other individuals who are neither aware of the technical details or legal merits of the application nor engaged in the preparation or prosecution thereof. Simply having a general interest or even a financial interest in the invention or a general awareness of the application is not enough.

BPAI Informative Opinion Underscores Different Validity Standards for Reexams

Ex Parte Baxter International, Inc., No. 2009-006493 (18 March 2010) (informative opinion)

Baxter and Fresenius engaged in a hard-fought battle over patents relating to hemodialysis machines with touch screen user/machine interfaces.  During litigation, Fresenius submitted Baxter's patents to the USPTO for reexamination.  In the meantime, the jury returned a verdict finding the patents invalid for obviousness.  On motion for JMOL, the trial judge overturned the jury's finding of obviousness.  Fresenius appealed.

The Federal Circuit then overturned the trial judge one one patent, finding that substantial evidence supported the jury's finding of obviousness.  On another patent, the Federal Circuit The court found that Fresenius failed to prove invalidity by clear and convincing evidence and "neither identified the structure in the specification that corresponds to the means for delivering dialysate nor compared it to the structures present in the prior art . . . [and] failed to present any evidence that the required stepper motor structure existed in the prior art.”

While this was going on, the USPTO rejected the remaining patent as obvious over multiple prior art references.  Baxter appealed to the BPAI.

On appeal, the BPAI emphasized that the Office is free to reach its own conclusions from the evidentiary record, notwithstanding the findings from the courts:

Although [the claims at issue] were not proven invalid in court, a lower standard of proof and the broadest reasonable interpretation standard of claim construction apply at the PTO and therefore the agency is not bound by the court’s determination. Ethicon v. Quigg, 849 F.2d 1422, 1429 (Fed.Cir. 1988) (“[T]he Board and the courts take different approaches in determining invalidity and on the same evidence could quite correctly come to different conclusions.”); In re Swanson, 540 F.3d 1368, 1377 (Fed. Cir.2008) (explaining the different standards of proof and claim construction used in reexamination relative to civil litigation in district court).

* * *

[H]ere, Appellant has urged in the present appeal that we should defer to the district court’s ruling because “[a]part from the Thompson reference, the evidence here is the same as that examined by the District Court” . . . Because Appellant has repeatedly relied on the district court proceeding in support of nonobviousness, we discern no unfairness in subjecting Appellant to any adverse consequence that may arise from such reliance in the current reexamination, which is conducted under the preponderance of the evidence standard – a standard that is substantially lower than the clear and convincing standard used in district court.

* * *

On this record, we conclude that there is no error in the Examiner’s factual findings and conclusions that a person of ordinary skill in the art would have been prompted to couple a touch screen user/machine interface with a hemodialysis machine in view of the collective teachings of the prior art references

Read/download the opinion here (link)

Federal Circuit Looks to Redefine "Materiality" and "Intent" For Inequitable Conduct

Therasense Inc. v. Becton, Dickinson and Co., No. 08-1511 (April 26, 2010, order)

During proseuction before the USPTO, the patentee made certain representations to the examiner regarding the patent claims and the prior art.  At the same time, the patentee made representations to the EPO that were clearly inconsistent with the USPTO proceedings.  The Federal Circuit found that the patentee's actions rose to the level of inequitable conduct (for more details, see here).

On petition for en banc rehearing, the court granted the request and vacated the earlier opinion, requesting that the parties file new briefs addressing the following issues:

1.  Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced?

2.  If so, how? In particular, should the standard be tied directly to fraud or unclean hands? See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard for fraud or unclean hands?

3. What is the proper standard for materiality? What role should the United States Patent and Trademark Office’s rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?

4.  Under what circumstances is it proper to infer intent from materiality? See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc).

5.  Should the balancing inquiry (balancing materiality and intent) be abandoned?

6.  Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context.

Briefs of amici curiae will be entertained, and any such amicus briefs may be filed without leave of court but otherwise must comply with Federal Rule of Appellate Procedure 29 and Federal Circuit Rule 29.  The USPTO is invited to participate as amicus curiae.

Read the order here (link)

Patent Reform Before Memorial Day?

From Tech Daily Dose:

Senate Judiciary Chairman Patrick Leahy, D-Vt., is pressing Senate leaders to bring his patent overhaul legislation to the Senate floor before the Memorial Day break. Senate Majority Whip Richard Durbin, D-Ill., said Thursday that Leahy would like Senate leaders to bring up the patent bill after the Senate finishes action on financial regulatory legislation, expected to come up next week, and food safety legislation.

"Senator Leahy would like floor time for patent reform," Durbin said.

Durbin, however, said that a small business jobs bill that Senate Majority Leader Harry Reid, D-Nev., wants to pass this work period could bump the patent bill. Senate Appropriations Chairman Daniel Inouye, D-Hawaii, also wants to move a supplemental defense spending bill before Memorial Day. Reid will determine which bills get priority.

Patent Survey Suggests Most 2009 Trends Should Slightly Improve in 2010

Inovia recently surveyed over 150 US companies to assess the impact of the economic downturn on their global IP strategy and their outlook for 2010.  The company issued a follow-up report that summarizes the results and trends identified in the received responses. The respondents for the survey are alleged to represent a broad range of industries and sizes with most being small to medium-sized enterprises.

Overall, the report confirms that most in-house patent departments were hit significantly during 2009.  Over 60% of respondents indicated that their IP budgets were cut in the last 12-18 months: 38% indicated that the budgets were hit by cuts exceeding 30%; 29% indicated that budgets were cut between 16-30%, and 33% indicated that budgets were cut between 5-15%.

Also, when asked "will you allow more granted patents to lapse in 2010 than you have in recent years?", the respondents answered

Yes - 23%
No - 52%
Not Sure - 25%

When asked if the lapses were directly related to budget cuts, 69% answered "yes".

72% of the respondents indicated that they brought more work in house in the last 12-18 months; surprisingly, U.S. prosecution, foreign filing and foreign prosecution were some of the least mentioned work taken in-house.  For 2010, 51% responded that no further work would be pulled in-house.

The cost-saving measure most cited for 2009 was to reduce the number of foreign countries entered. Specifically, between 2008 and 2010 there was an overall decrease in the average number of countries entered - from 6.6 countries in 2008 to 6.3 countries planned for 2010.

To obtain a copy of the survey, click here (link)

Fed. Cir.: Incorporation By Reference Valid When Information is "Ascertainable" By the Examiner

Harari v. Hollmer, No. 09-1406 (April19, 2010)

During an Interference proceeding, Harai was dismissed from the proceeding and the Board concluded that Harari’s claims were unpatentable for lack of written description due to an insufficient incorporation by reference statement.

The application in question stemmed from a series of 4 continuation filings, that also incorporated teachings from related applications.  The original application made reference to two different applications, one of which had a serial number assigned to it at the time, and a second one that didn't: 

Optimized erase implementations have been disclosed in two copending U.S. patent applications. They are copending U.S. patent applications, Serial No. 204,175, filed June 8, 1988, by Dr. Eliyahou Harari and one entitled “Multistate EEprom Read and Write Circuits and Techniques,” filed on the same day as the present application, by Sanjay Mehrotra and Dr. Eliyahou Harari. The disclosures of the two applications are hereby incorporated by reference.

The application at issue also included a transmittal sheet identifying the filing as a continuation application, a photocopy of the parent application as originally filed, a preliminary amendment revising the parent application, and a copy of the inventors’ declaration filed in the immediately preceding application.

In a preliminary amendent, the specification was changed to add the serial number and filing date and several paragraphs of text and drawing sheets, copied from the earlier application.  Additionally, new claims were added that were directed, at least in part, to the earlier material.  In the "Remarks" section of the amendment, te applicant explained the basis for the amendments.

The USPTO rejected the incorporation by reference, finding

[T]hat one could not tell from the original disclosure whether the incorporation language referred to an application filed on the same day as the [original] application, or on the same day as the [application at issue]. The Board found that the incorporation language was so confusing in this way that it could not support the insertion of information from the [earlier] application into the [] disclosure by preliminary amendment.

The Federal Circuit reversed the USPTO:

[I]n rejecting the preliminary amendment as new matter, the Board failed to compare the content of the preliminary amendment against the initial parent application. . . . At the time the ’566 application was filed, the co-pending and simultaneously filed ’579 application had not yet been assigned a serial number or awarded a filing date. Thus, the title of the application, named inventors, and the fact that the application was filed on the same day as the ’566 application constituted all of the identifying information available to the drafter of the ’566 application. This information was sufficient to unambiguously identify and incorporate by reference the disclosure of the ’579 application into the disclosure of the ’566 application. . . . The preliminary amendment thus does not contain new matter compared to the initial parent application. When entered, the preliminary amendment revises the disputed “present application” language, resolving any alleged confusion presented by the manner in which the ’880 application was filed.

In addition to failing to compare the preliminary amendment to the initial parent disclosure, the Board appears to have applied the wrong standard in determining that the incorporation language was confusing. The disputed continuation application is at the initial filing stage, where the examiner is first presented with an original disclosure and a preliminary amendment. The proper standard by which to evaluate the sufficiency of incorporation by reference language, at this stage of the proceedings, is whether the identity of the incorporated reference is clear to a reasonable examiner in light of the documents presented. In other words, the relevant inquiry is whether a reasonable examiner would be so befuddled by the language of the original disclosure, despite the explanation provided in the transmittal and preliminary amendment, that he could not determine what document was intended to be incorporated by reference.

Also in the footnes:

Harari argues that the correct standard is how the statement would be understood by one of skill in the art. We agree with Harari that if we were determining the validity of an issued patent containing the disputed incorporation by reference statement, “filed on the same day as the present application,” where that language actually refers to an application other than the one issued, then we would be concerned with whether one of ordinary skill in the art could identify the information incorporated. The present case, however, does not involve an issued patent or language that is intended to appear in an issued patent. Thus the proper lens through which to view the disputed language is that which is ascertainable to a reasonable examiner.

REVERSED AND REMANDED

Read/download the opinion here (link)

Fed. Cir. Nixes USPTO Claim Construction for Not Contruing Claim Term "Consistent With the Specification."

In Re Suitco Surface, Inc., No. 09-1418 (April 14, 2010)

One of the issues in this case was the interpretation of a claim directed to “floor finishing material” for use on athletic courts, bowling lanes, and other floor surfaces made of wood, linoleum, terrazzo, or concrete.  One claim recited "on a floor having a flat top surface and an improved material for finishing the top surface of the floor, the improvement comprising . . ."

In its rejection, the Board construed the term “material for finishing the top surface of the floor” to mean “requiring a material that is structurally suitable for placement on the top surface of a floor.” Under that construction, according to the Board, the “material for finishing the top surface of the floor” could be any layer above the floor regardless of whether it was the top or final layer.

The Federal Circuit started its claim construction by noting that

The express language of the claims requires a “material for finishing the top surface of the floor.” . . . A material cannot be finishing any surface unless it is the final layer on that surface. Otherwise, the material would not be “finishing” the surface in any meaningful sense of the word.

Going further:

The PTO’s proffered construction ignores this reality by allowing the finishing material to fall anywhere above the surface being finished regardless of whether it actually “finishes” the surface. Indeed, according to the PTO, the finishing surface need only be “structurally suitable for placement on the top surface of the floor" - i.e., several layers can be placed on top of the “finishing” layer. If the PTO’s construction were accepted, a prior art reference with carpet on top of wood, on top of tile, on top of concrete, on top of a thin adhesive plastic sheet anticipates the claims in question because an adhesive plastic sheet falls at some point in the chain of layers. This construction does not reasonably reflect the plain language and disclosure of the ’514 patent.

Although the PTO emphasizes that it was required to give all “claims their broadest reasonable construction” particularly with respect to claim 4’s use of the open-ended term “comprising,” . . . this court has instructed that any such construction be “consistent with the specification, . . . and that claim language should be read in light of the specification as it would be interpreted by one of ordinary skill in the art.”

The PTO’s construction here, though certainly broad, is unreasonably broad. The broadest-construction rubric coupled with the term “comprising” does not give the PTO an unfettered license to interpret claims to embrace anything remotely related to the claimed invention. Rather, claims should always be read in light of the specification and teachings in the underlying patent. See Schriber-Schroth Co. v. Cleveland Trust Co., 311 U.S. 211, 217 (1940) (“The claims of a patent are always to be read or interpreted in light of its specifications.”). In that vein, the express language of the claim and the specification require the finishing material to be the top and final layer on the surface being finished . . . The PTO’s proffered construction therefore fails.

VACATED-IN-PART, AFFIRMED-IN-PART, AND REMANDED
 
Read/download the opinion here (link)

"Bikkuri Shimashita Ka?" Japanese Companies Surge in Latest IEEE "Patent Power Scorecard"

IEEE Spectrum (with the help of 1790 Analytics) has released its annual "Patent Power Scorecards" measuring the relative strength of patent portfolios in various industries.  Factors that affected rankings included the number of patents issued, processed against four variables referred to as "Pipeline Growth", "Pipeline Impact", "Pipeline Generality", and "Pipeline Originality."  For more details on the methodologies used, click here (link)

What did the 2010 study find?

The surprise story of this edition of the IEEE Spectrum Patent Power Scorecards is the reemergence of Japan as a global leader in innovation. Based on data from 2009, out of the 323 leading organizations in the scorecards, 65 (20 percent) are Japanese. This percentage is markedly higher than in the 2007 scorecards, in which 45 out of 319 companies (14 percent) were Japanese.

The increasing prominence of Japanese companies is particularly clear in the electronics industry. Out of the top 10 companies in the Electronics scorecard, 7 are Japanese, headed by Hitachi, Sony, and Casio. In comparison, 5 out of the top 10 electronics companies in 2007 were Japanese. Ditto for the automotive industry, where 7 of the top 10 companies in the Automotive and Parts scorecard are Japanese, compared to five in 2007. This includes 4 of the top 5 automotive companies—Honda, Toyota, Denso, and Nissan. Honda is the big mover, improving from sixth place in 2007 to top position in 2009.

And with regards to the U.S.,

Clearly, the global recession seriously hampered innovation in the United States . . . Since the last scorecard, budget cuts across organizations both large and small have halted this trend. In 2008, the number of patent applications remained constant at 456 000, making it the first year since 1996 that there was not an increase in the number of applications filed . . .Not only did the number of U.S. organizations in the scorecards fall by almost 30 between 2007 and 2009, some household names suffered in terms of their ranking.

See IEE Spectrum: Patent Power Scorecards

See individual rankings for:

(1) Aerospace and Defense, (2) Automotive and Parts, (3) Biotech and Pharma, (4) Chemical, Computer (5) Peripherals and Storage, (6) Computer Software, (7) Computer Systems, (8) Conglomerates, (9) Electronics (10) Government Agencies, (11) Medical Equipment/Instruments, (12) Scientific Instruments, (13) Semiconductor Equipment Manufacturing, (14) Semiconductor Manufacturing, (15) Telecommunication Services, (16) Telecom/Communication Equipment, (17) Universities/Education/Training

Click here (link)

Download a full PDF copy of the rankings here (link)

Fed. Cir.: "Direct" Action Not Implied When Method Step is Performed

SIRF Technology v. ITC, No. 09-1262 (April 12, 2010)

SiRF Technology, Inc. (“SiRF”) and other defendants appealed the decision of the ITC finding that certain GPS devices infringed patents owned by Global Locate.  One of the claims-at-issue recited

 A method of receiving global positioning system (GPS) satellite signals comprising:

receiving satellite ephemeris at a first location;
communicating the satellite ephemeris to a mobile GPS receiver at a second location; and
processing satellite signals received at the mobile GPS receiver using the ephemeris to reduce code and frequency uncertainty in the mobile GPS receiver to improve acquisition sensitivity of the mobile GPS receiver.

During the ITC proceeding, the Commission found joint infringement, where the steps of "communicating" and "processing" were found to be performed by one party, under the control and direction of another party.

Appellants argue that the performance of these steps necessarily involves actions by SiRF’s customers and by the end users of the GPS devices. They argue that in order for the data to be “communicat[ed]” or “transmit[ed]” to the GPS receiver, the data must travel first from SiRF’s server to the servers of its customers (the intermediate distributors and GPS product manufacturers). Then, SiRF’s customers must forward this data to the mobile GPS receivers, and the end users of the GPS devices must download the data from the customers’ servers.

After construing the claims, the Fed. Cir. rejected this argument:

Neither the claim language nor the patent specification requires that the communication/transmission be direct. In fact, indirect communication is specifically contemplated. See ’651 patent col.3 ll.42-48 (“The link may be a landline, or other direct communications path . . . . Alternatively, this link may have several parts . . . .”). Therefore, we construe these limitations as encompassing “communicating, whether direct or indirect” and “transmitting, whether direct or indirect.”

With respect to infringement, under this construction it is clear that SiRF performs the step of communicating/transmitting the files to the end users’ devices because SiRF initiates the process of transmitting and communicating, and the files are actually transmitted to the end users. The entire “end-to-end service,” as SiRF’s marketing describes it, was designed by SiRF so that the EE ["extended-ephemeris"] files would be transmitted to end-user GPS devices containing SiRF chips and software. Indeed, the EE files generated by SiRF only work in the end-user devices of those devices containing SiRF chips and SiRF software. Here, it is true that the “communicati[ng]” or “transmitting” can only occur if the customer forwards the data to the end user and the end user downloads the data. However, the actions of “forwarding” or “downloading” are not required by the claims, and, therefore, the fact that other parties perform these actions does not preclude a finding of direct infringement. By analogy, if a claim for a method of making a telephone call included the limitation: “placing a telephone call to a telephone at a second location,” the fact that the call must first be routed through a switched telephone network, and then eventually to the eventual recipient, would not prevent this claim limitation from being satisfied. Therefore, we conclude SiRF indirectly transmits or communicates the files to the GPS receivers and thereby meets these claim limitations.

PATENTABLE SUBJECT MATTER

A GPS receiver is a machine and is integral to each of the claims at issue . . . [the claim] also refers to “computing absolute position” by updating an “estimate of position of the GPS receiver,” providing an estimate of the time at which a GPS receiver receives a plurality of satellite signals, and computing the position “of the GPS receiver.”  Further, claim 1 requires “pseudoranges” that estimate the distance from “the GPS receiver to a plurality of GPS satellites.” Pseudoranges, which are the distances or estimated distances between satellites and a GPS receiver, can exist only with respect to a particular GPS receiver that receives the satellite signals . . . It is clear that the methods at issue could not be performed without the use of a GPS receiver; indeed without a GPS receiver it would be impossible to generate pseudoranges or to determine the position of the GPS receiver whose position is the precise goal of the claims.
 
We also think that the presence of the GPS receiver in the claims places a meaningful limit on the scope of the claims . . . We are not dealing with a situation in which there is a method that can be performed without a machine. Contrary to appellants’ contention, there is no evidence here that the calculations here can be performed entirely in the human mind. Here, as described, the use of a GPS receiver is essential to the operation of the claimed methods . . . we hold that the claims at issue are properly directed to patentable subject matter as they explicitly require the use of a particular machine (a GPS receiver) and could not be performed without the use of such a receiver.

CHALLENGING A PATENT ASSIGNMENT (BURDEN OF PROOF)

The recording of an assignment with the PTO is not a determination as to the validity of the assignment. See 37 C.F.R. § 3.54. However, we think that it creates a presumption of validity as to the assignment and places the burden to rebut such a showing on one challenging the assignment. Such an understanding is consistent with and supported by the provisions of 35 U.S.C. § 261.

Read/download a copy of the opinion here (link)

Video: Kappos Speech on the Future of the USPTO

On April 6, Director Kappos spoke at the William Mitchell College of Law, where he shared his vision for a "more innovation-friendly U.S. patent system."

The law school has graciously posted a video of the speech online - you can watch it here (link)

USPTO Launches Ombudsman Pilot Program for Handing Problematic Examinations

Tuesday the USPTO announced that the agency is looking to assign an ombudsman (plus one backup) to each technology center in an effort to assist applicants in "handling application-processing problems if the normal channels have not been successful."  This one-year pilot program is intended to provide applicants with additional resources to ensure application-processing problems are handled in a more efficient way, thereby saving applicants and the Agency both time and resources and improving patent quality.

According to the Office, the objectives for the Patents Ombudsman Pilot Program are:

1. To facilitate complaint-handling for pro se applicants and applicant’s representatives whose applications have stalled in the examination process; 
2. to track complaints to ensure each is handled within ten business days; 
3. to provide feedback and early warning alerts to USPTO management regarding training needs based on complaint trends; and 
4.  to build a database of frequently asked questions accessible to the public that tracks commonly seen problems and effective resolutions. 

The entire Patent Examining Corps and other Patents operation units (e.g., Office of Patent Application Processing) will be included in the program.

In order to participate in the Patents Ombudsman Pilot Program, pro se applicants or applicants’ representatives must fill an electronic form on the USPTO Web site to provide their name and phone number and select the ombudsman for the patent organization (e.g., TC 2400) in which they are seeking assistance.  After receiving confirmation, The participant should expect a telephone call from the ombudsman within one business day to proceed with the inquiry.

The Patents Ombudsman Pilot Program is scheduled to run for one year from its effective date.  Therefore, any request under the Patents Ombudsman Pilot Program must be submitted before April 6, 2011.

Read the USPTO press release here (link)

Read the Federal Register Notice here (link)

View earlier public comments on the Ombudsman program here (link)

Hatch-Waxman Patent Term Extension Deadlines: Business Day or Calendar Day?

35 U.S.C. section 156(d)(1) provides:

To obtain an extension of the term of a patent under this section, the owner of record of the patent or its agent shall submit an application to the Director. Except as provided in paragraph (5), such an application may only be submitted within the sixty-day period beginning on the date the product received permission under the provision of law under which the applicable regulatory review period occurred for commercial marketing or use.

The Medicines Company ("MDCO") received a patent relating to Angiomax that was originally filed on December of 1997.  Almost three years after the date of filing - by letter date-stamped Friday, December 15, 2000 and transmitted to MDCO by fax at 6:17PM, the FDA sent written notice that the Angiomax NDA was approved.

On February 14, 2001, MDCO submitted its patent trerm extension application to the USPTO, claiming that, due to the length of regulatory review, the expiration of the patent should be changed from March 2010 to December 2014.

After referring to the FDA, the PTO held that "the submission of the patent term extension application on February 14, 2001" - 61 days after December 15, 2000 - was "untimel within the meaning of 35 U.S.C. section 156(d)(1)."  As such, the application was denied.

MDCO countered that in light of the text and purpose of the Hatch-Waxman Act, the word "date" should be read to mean "business day."  Under this interpretation, if the FDA transmits notice of approval after business hours, the drug is deemed to have "received permission . . . for commercial marketing or use" on the next business day.  Thus, the 60-day period began running Monday, December 18, 2000 (and not December 15).

Over the next 8 years, MDCO engaged in aprotracted adminitrative proceedings that sought to overturn the PTO's finding that the application was "untimely."  When the case reached the E.D. Va., the court found that the PTO erred in concluding that the "calendar day" definition it used was either mandated by either the statute or Federal Circuit precedent.  The Court also held that the Hatch-Waxman Act should be interpreted "liberally" in light of its "remedial" nature.  Accordingly, the District Court vacated the PTO's denial and remanded for further consideration, giving the PTO discretion in interpreting the statute.

Less than 3 days after the District Court's opinion, the PTO issued another denial of the application, stating that "the best definition of 'date' in section 156(d)(1) is 'calendar day' based upon the text, structure, and purpose of the statute."

On March 25, MDCO filed another complaint against the PTO, arguing that the agency's decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."

Read/download the complaint here (link)

Read/download the USPTO's decision denying the patent term extension (link)

Read/download the previous opinion by the E.D. Va. (link)

USPTO Looking at a Two Year Delay For Converting Provisional Apps Into Non-Provisional Apps

The USPTO is proposing to change the process for converting provisional patent applications by providing a 12‑month extension to the existing 12-month provisional application period.   In stead of simply providing a two year period, the USPTO will allow applicants to add another year through the missing parts practice in nonprovisional applications.

Essentially, applicants would be permitted to file a nonprovisional application with at least one claim within the 12-month statutory period after the provisional application was filed, pay the basic filing fee, and submit an executed oath or declaration. In addition, the nonprovisional application would need to be in condition for publication and applicant would not be able to file a nonpublication request. Applicants would be given a 12-month period to decide whether to pay the required surcharge and the additional required fees.

According to Director Kappos:

“One of the things I kept hearing at the many roundtables we’ve held with inventors all across the country was that additional time flexibility during the provisional period would greatly benefit them,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “The existing 12-month provisional period may provide too little time for inventors to test the marketplace. Giving applicants a 12-month period to reply to a missing parts notice would effectively give applicants more time to evaluate the value and market potential of their inventions. It not only helps applicants decide whether to incur the additional costs involved in pursuing a patent, but also, makes the patent office more efficient in enabling the delivery of new products and services to market.”

Read the USPTO Press Release here (link)

Read the Fed. Reg. Notice here (link)


Comments are due by June 1 and may be directed to: extended_missing_parts@uspto.gov