Chuck Schmal Sponsored by the Intellectual Property Law Section Indianapolis Bar Association: 2008 Year in Review Patent Law and Practice Chuck Schmal Sponsored by the Intellectual Property Law Section

Overview Will not spend a large amount of time on “famous” cases that are covered in usual articles. Will not tend to focus on the more fact specific cases, such as claim construction and obviousness. Instead, this presentation will (hopefully) focus on some more practical cases and topics.

Ownership and Licensing

Ownership and Licensing Topics: Employment Agreements Corporate Ownership and Structure Licensing 3rd Parties

Ownership and Licensing Employment Agreements (Assignments from Inventors to a Company)

DBB Tech. LLC v. MLB (Fed. Cir. 2008) Barstow was an employee of Schlumberger and signed an employment agreement. While at Schlumberger, he worked on several software projects that resulted in the four patents in suit which concerned three “Computer Simulation Patents” and one “Pattern-Matching Patent” (aka, “baseball simulator” project).

DBB Tech. LLC v. MLB (Fed. Cir. 2008) Schlumberger’s general counsel for software matters and the director of the lab did not believe at the time that the project belonged to Schlumberger. Barstow and his brother form DDB and assign the patents to DDB. DDB sues MLB Advanced Media over the patents.

DBB Tech. LLC v. MLB (Fed. Cir. 2008) Before discovery closes, Schlumberger and MLB Advanced Media entered into an agreement that assigned to MLB Advanced Media all of Schlumberger’s rights and interest in the patents in suit and granted MLB Advanced Media a retroactive license to practice under those patents.

DBB Tech. LLC v. MLB (Fed. Cir. 2008) Question 1: Whether Bastow's employment agreement is: An automatic assignment- requiring no further act on the part of Schlumberger is required to transfer title, or A promise to assign- which only vests Schlumberger equitable rights and not legal title. This is a Federal Law question.

DBB Tech. LLC v. MLB (Fed. Cir. 2008) Employment agreement states that Barstow: “agrees to and does hereby grant and assign” all rights in future inventions falling within the scope of the agreement to Schlumberger. Federal Circuit- This language clearly creates an automatic assignment.

DBB Tech. LLC v. MLB (Fed. Cir. 2008) Question 2: Whether the employment agreement covered the patents in suit because they “relate in any way to the business or activities” of Schlumberger, or “are suggested by or result from” Barstow’s work for Schlumberger. The is a State Law (Texas) question. Lower court abused discretion in not granting discovery on whether Barstow's baseball simulator project was under the scope of employment (remand).

DBB Tech. LLC v. MLB (Fed. Cir. 2008) If the patents in suit were within the scope of the employment agreement, they would have been automatically assigned to Schlumberger by operation of law with no further act required on the part of the company. If this occurred, DDB’s statute of limitations, waiver, and estoppel defenses would have no merit.

DBB Tech. LLC v. MLB (Fed. Cir. 2008) Take Home Points for Employers: Make sure the language in your employment agreements create an automatic assignment so that legal title vests automatically. Take Home Points for Employees: Obtain written waiver from employer that projects is not within the scope of your employment.

Ownership and Licensing Corporate Structure and Ownership (Ownership and Licensing Between Related Companies)

Mars v. Coin Acceptors (Fed. Cir. 2008) Mars is a candy company. In 1990, Mars owns two patents that generally concern techniques for authenticating coins in vending machines

Mars v. Coin Acceptors (Fed. Cir. 2008) Mars does not make and has never made vending machine coin changers. But, Mars had a wholly owned subsidiary, Mars Electronics International, Inc. (“MEI”), that manufactures and sells vending machine coin changers.

Mars v. Coin Acceptors (Fed. Cir. 2008) In the United Kingdom, Mars has another subsidiary, MEI UK, that is separate from MEI. MEI MEI-UK

Mars v. Coin Acceptors (Fed. Cir. 2008) Mars maintained consolidated financial statements that reflected the profits, losses, assets, and liabilities of all of its subsidiaries, including MEI.

Mars v. Coin Acceptors (Fed. Cir. 2008) MEI 1990-1996 Mars licenses the patents to MEI. License

Mars v. Coin Acceptors (Fed. Cir. 2008) MEI MEI made payments to Mars “[b]ased on gross sales value” of coin changers using Mars’s patented technology. MEI was required to make those royalty payments whether or not it made any profit. License

Mars v. Coin Acceptors (Fed. Cir. 2008) In 1990, Mars sues Coin Acceptors, Inc. for infringement of both patents Mars

Mars v. Coin Acceptors (Fed. Cir. 2008) MEI In 1996, Mars assigns patents to MEI to settle a tax dispute with the UK concerning the tax treatment of royalty payments from MEI-UK to its parent Mars. Assigns

Mars v. Coin Acceptors (Fed. Cir. 2008) MEI District Court finds MEI—but not Mars—had standing to pursue claims after 1996. (Mars did not own the patents.)

Mars v. Coin Acceptors (Fed. Cir. 2008) MEI In 2006, Mars and MEI - “COINCO CONFIRMATION AGREEMENT,” stated that “Mars and [MEI] do hereby acknowledge that Mars owns and retains the right to sue for past infringement of the Litigation Patents” Confirmation Agreement

Mars v. Coin Acceptors (Fed. Cir. 2008) Questions of interest (opinion had more questions): (1) whether Mars was entitled to lost profits; (2) whether MEI had standing to recover damages incurred prior to 1996; and (3) whether Mars had standing to recover damages incurred from 1996 to 2003.

Mars v. Coin Acceptors (Fed. Cir. 2008) Question (1) whether Mars was entitled to lost profits. Mars claimed that, by virtue of the parent-subsidiary relationship and its consolidated financial statements, “all MEI’s lost profits were inherently lost profits of Mars.”

Mars v. Coin Acceptors (Fed. Cir. 2008) Answer: No Lost Profits for Mars. Federal Circuit: Mars and MEI had a traditional royalty-bearing license agreement. MEI paid Mars a royalty “[b]ased on gross sales value” of MEI’s products that use Mars’s patented technology, and MEI was required to make those royalty payments whether or not it made any profit.

Mars v. Coin Acceptors (Fed. Cir. 2008) Question (2) whether MEI had standing to recover damages incurred prior to 1996. Answer: No. Federal Circuit MEI did not own the patents prior to 1996. Mars and MEI had a non-exclusive license because 1996 agreement indicated that MEI-UK was also licensed under the same patents as MEI- no geographical limits.

Mars v. Coin Acceptors (Fed. Cir. 2008) Question (3) whether Mars had standing to recover damages incurred from 1996 to 2003. Real Questions: (a) Whether the 1996 Agreements transferred title of the patent from Mars to MEI, and (b) If so, whether the 2006 Confirmation Agreement transferred title back from MEI to Mars.

Mars v. Coin Acceptors (Fed. Cir. 2008) Question (a) Whether the 1996 Agreements transferred title of the patent from Mars to MEI. Answer: Yes. Federal Circuit- language is a clear assignment to MEI: “[Mars] Incorporated hereby transfers to MEI-US its entire interest in the Covered Intellectual Property that relates to the business of the Parties.”

Mars v. Coin Acceptors (Fed. Cir. 2008) Question (b) Whether the 2006 Confirmation Agreement transferred title back from MEI to Mars. Answer: No.

Mars v. Coin Acceptors (Fed. Cir. 2008) Federal Circuit- the following language was a transfer of a right to sue for past damages and not an assignment (acknowledges patent ownership but does not actively transfer): Mars and the Buyer [MEI] do hereby acknowledge that Mars owns and retains the right to sue for past infringement of the Litigation Patents. To the extent that MEI may have or claim any rights in or to any past infringement of the Litigation Patents or any recovery therefor, upon the terms and subject to the conditions of the Purchase Agreement, MEI hereby does irrevocably assign all such rights to Mars.

Mars v. Coin Acceptors (Fed. Cir. 2008) Question (3) whether Mars had standing to recover damages incurred from 1996 to 2003. Answer: No.

Mars v. Coin Acceptors (Fed. Cir. 2008) Watch out who owns the patents. Corporate structure and ownership can affect: Standing to sue and Damages (lost profits). Be very clear with the language you use when assigning a patent (don't play games).

Ownership and Licensing Licensing Others

Quanta v. LG Electronics (U.S. 2008) Computer Memory Management Methods US 4,939,641 Cross-License US 5,379,379 License does not extend to products that combine Intel with Non-Intel Components US 5,077,733 3rd Party Supplier of Memory/Bus Bought

Quanta v. LG Electronics (U.S. 2008) Sales of products that do not fully practice the invention can still trigger patent exhaustion when the product includes essential features and the “reasonable and intended use” of the product is to practice the patent. Method claims are subject to exhaustion. The court left open the possibility of using specific licensing terms to limit the scope of patent exhaustion. For example, a License could prohibit types of third party sales as a breach.

Quanta v. LG Electronics (U.S. 2008) Take Home #1: Try to have the agreement create a breach if downstream parties violate the agreement (Good Luck on getting that in an agreement). Take Home #2: Recoup all of your licensing revenue from the original sale/license. (Make sure your royalty rate reflects royalties for downstream use).

Continuation, Divisional and CIP Applications

Themes Following a long line of cases- CIP’s might not be that useful What is gained by filing a CIP in comparison to a new utility application for the new matter and a continuation? Answer: Not much

Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc. Safe Harbor of 35 U.S.C. § 121 Safe Harbor: Protection afforded by 35 U.S.C. 121 to applications (or patents issued therefrom) filed as a result of a restriction requirement is limited to divisional applications and does not apply to CIP’s filed as a result of a restriction requirement.

PowerOasis v. T-Mobile (Fed. Cir. 2008) Priority & Presumption of Validity Patentee normally bears burden of proving priority exception: priority claim considered by PTO = presumption of validity PTO did NOT consider priority = NO presumption of validity CIP did not receive benefit of parent’s filing date

Patentable Subject Matter- Business Methods and Software

Business Methods and Software Themes: This area of the law is a work in progress. Focus of the analysis seems to be that the claims are being overly broad. Right now, the Patent Office is taking an expansive view of what is not patentable. Watch out, other types of inventions might not be patentable.

Patentable Subject Matter- Business Methods and Software The Federal Circuit

In re Bilski, (Fed. Cir. 2008)(en banc) The claim is for a method of hedging risk in the field of commodities trading. A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of: (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer; (b) identifying market participants for said commodity having a counter-risk position to said consumers; and (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions

In re Bilski, (Fed. Cir. 2008)(en banc) Bilski holds that a claimed process either (1) be tied to a particular machine or apparatus or (2) transform a particular article into a different state or thing. Bilski's claim fails this test

In re Bilski, (Fed. Cir. 2008)(en banc) Federal Circuit: [W]e recognize that the Supreme Court may ultimately decide to alter or perhaps even set aside this test to accommodate emerging technologies. And we certainly do not rule out the possibility that this court may in the future refine or augment the test or how it is applied. Bilski v. Doll (on petition for certiorari)

In re Comiskey (Fed. Cir. 2009)- Revised Panel Opinion Original- claim features directed to nonstatutory subject matter would be de facto obvious. Rejects under 103. Comiskey’s patent application claims a method of arbitrating that does not necessarily require the use of any ‘technology.’ Revised opinion- finds the claims just directed to non-statutory subject matter. Rejects under 101.

In re Comiskey (Fed. Cir. 2009)- Revised Panel Opinion Dissent- Moore and Newman- the revised opinion violated "well established precedent that this court will not consider new grounds of rejecting patent claims on appeal."

Business Methods and Software Not yet many follow on cases from the Federal Circuit, but the Patent Office has been busy lining up cases for the Federal Circuit. The Board of Patent Appeals and Interferences (BPAI) was at first a little tentative in expanding In re Bilski, but the BPAI seems to have lost some inhibition (being tricky). While it is likely some of these cases will be overturned, BPAI cases might provide a clue of things to come for the Federal Circuit.

Patentable Subject Matter- Business Methods and Software Bilski- tied to a particular machine or apparatus prong

Business Methods and Software Question: How much of an apparatus or machine do I need to recite in my method claim in order to satisfy the “be tied to a particular machine or apparatus” prong of the test?

Business Methods and Software Bilski admitted that the claim was not limited to any specific machine, so not at issue in Bilski. “We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.”

Ex parte Halligan (BPAI 2008) 119. A programmed computer method based upon the six factors of a trade secret from the First Restatement of Torts for identifying trade secrets within a plurality of potential trade secrets of a business, where each of the plurality of potential trade secrets comprise information, said method implemented by the programmed computer to effect the following steps: a) the programmed computer providing a predetermined criteria for evaluating a potential trade secret ...

Ex parte Halligan (BPAI 2008) Machine Prong- “The issue presented by these claims is whether recitation of a programmed computer suffices to tie the process claims to a particular machine. This is the exact issue that the court in Bilski declined to decide.”

Ex parte Halligan (BPAI 2008) Machine Prong- Fails. “Were the recitation of a 'programmed computer' in combination with purely functional recitations of method steps, where the functions are implemented using an unspecified algorithm, sufficient to transform otherwise unpatentable method steps into a patent eligible process, this would exalt form over substance and would allow pre-emption of the fundamental principle present in the non-machine implemented method by the addition of the mere recitation of a 'programmed computer.'”

Ex parte Halligan (BPAI 2008) Transformation Prong- Failed because the transformation involves legal rights (Trade Secrets) and "does not represent physical and tangible objects."

Ex parte Halligan (BPAI 2008) Practice Tip: Right now, it appears that just reciting a “computer” or a “programmed computer” without more in a method claim will not overcome the machine prong of Bilski's machine-or-transformation test at the Patent Office. Note: Other non-method claims directed to “a programmed computer” were held invalid under § 112 (did not reach § 101 issue)

Ex parte Cornea-Hasegan (BPAI 2009)(non-precedential) 1. A method, comprising: normalizing by a processor operands a, b, and c for a floating-point operation; predicting by the processor whether result d of said floating-point operation on said a, b, c might be tiny; if so, then scaling by the processor said a, b, c to form a', b', c'; calculating by the processor result d' of said floating-point operation on said a', b', c'; determining by the processor whether said d is tiny based upon said result d'; if so, then calculating by the processor said d using software; and if not, then calculating by the processor said d using floating-point hardware.

Ex parte Cornea-Hasegan (BPAI 2009)(non-precedential) Machine Prong: “The recitation of a processor in itself, however, does not tie the process steps to a particular machine. In other words, the recitation of a processor does not limit the process steps to any specific machine or apparatus.” Transformation Prong: “Appellant’s claim 1also fails the second prong of the machine-or-transformation test because the data acted on by the method does not represent physical and tangible objects. Rather, the data represents information about an abstract floating-point number, which is intangible.” Result: “Thus, claim 1 fails the machine-or-transformation test and is not patent-eligible under 35 U.S.C. § 101”

Ex parte Cornea-Hasegan (BPAI 2009)(non-precedential) Practice Tip: Similar to “programmed computer” in Halligan, it appears that just reciting a “processor” without more in a method claim will not overcome the machine prong of Bilski's machine-or-transformation test at the Patent Office.

Patentable Subject Matter- Business Methods and Software How Bilski Affects Other Types of Claims

Business Methods and Software Question: Can I get around this problem by using apparatus claims instead of method claims? Clue: In re Bilski (which did not outright overturn State Street) stated in footnote 18: “In State Street, as is often forgotten, we addressed a claim drawn not a process but to a machine.”

Ex parte Bo Li (BPAI 2008) One of first BPAI cases to interpret Bilski (somewhat). The application describes a system and method for generating Web based reports that can be easily updated.

Ex parte Bo Li (BPAI 2008) 42. A computer program product, comprising a computer usable medium having a computer readable program code embodied therein, said computer readable program code adapted to be executed to implement a method for generating a report, said method comprising: providing a system, wherein the system comprises distinct software modules, and wherein the distinct software modules comprise a logic processing module, a configuration file processing module, a data organization module, and a data display organization module; parsing a configuration file into definition data that specifies: a data organization of the report...

Ex parte Bo Li (BPAI 2008) Claim 42 is a Beauregard claim directed to a computer program product stored on a computer readable memory . Held that “though not finally adjudicated,” such claimed products, even when written as Beauregard claims, are still valid under § 101. However, claim still held unpatentable as obvious.

Ex parte Atkin (BPAI 2009) Issued after Ex parte Cornea-Hasegan The application concerns human interfaces for the World Wide Web addresses in languages which require bidirectional display and presentation (can read right to left or vice versa).

Ex parte Atkin (BPAI 2009) Method Claim 1. A method for converting a unidirectional domain name to a bidirectional domain name, said method comprising the steps of: establishing a plurality of labels within a unidirectional domain name by using a pre-determined full stop punctuation mark as a delimiter between said labels, said labels having an original label display order as encountered from left to right; within each said label, performing inferencing through...

Ex parte Atkin (BPAI 2009) System Claim 9. A system for converting a unidirectional domain name to a bidirectional domain name comprising: a label definer adapted to establish a plurality of labels within a unidirectional domain name by using a pre-determined full stop punctuation mark as a delimiter between said labels, said labels having an original label display order as encountered from left to right; an inferencer adapted to, within each said label, resolve ...

Ex parte Atkin (BPAI 2009) Atkin did not separately argue: Independent claim 5, which recited a computer readable medium encoded with computer software for accomplishing method steps like those recited in claim 1 (Beauregard claim), and Independent claim 9, which recited a “system” that comprises elements for performing the functions represented by those steps.

Ex parte Atkin (BPAI 2009) BPAI rejected under 35 U.S.C. § 101 as not being directed to patent-eligible subject matter as defined in Bilski: Independent claim 1- Method Claim. Independent claim 9- System Claim. Notably, claim 5, which was the Beauregard claim, was not rejected under 35 U.S.C. § 101.

Ex parte Atkin (BPAI 2009) BPAI noted that claim 1 does not: "recite any machine or apparatus or call for transforming an article into a different state or thing. A domain name is simply a series of characters representing the address of a resource, such as a server, on the World Wide Web. All of the steps are data manipulation steps."

Ex parte Atkin (BPAI 2009) System claim 9 for converting the domain name rejected: The term “system” in the preamble is broad enough to read on a method and thus does not imply the presence of any apparatus. Language “inferencer” and “label definer” used in the body does not help (not really an apparatus). BPAI treated claim 9 as encompassing any and all means for performing the recited functions and rejected claim 9 under § 112, first paragraph, as based on a nonenabling disclosure in accordance with Miyazaki (BPAI). (too broad a claim- the disclosure fails to provide a scope of enablement commensurate with the scope of the claims).

Ex parte Atkin (BPAI 2009) System claim 9 for converting the domain name rejected: “when construed in accordance with Miyazaki in the manner explained above in the discussion of the new rejection of those claims under § 112, first paragraph, for nonenablement, those claims encompass any and all structures for performing the recited [claim 9 is] at least as broad as method claims which we have determined recite patent.” ineligible subject matter under Bilski.”

Ex parte Atkin (BPAI 2009) Practice Points: Include Beauregard claims in your application to cover the methods for your invention (Might improve your chance of avoiding a 101 rejection at the Patent Office)

Ex parte Atkin (BPAI 2009) However, note in an earlier non-precedenital decision, Ex parte Cornea-Hasegan (BPAI 2009) (discussed before), the BPAI rejected the following claim as being directed to unpatentable subject matter: 18. A computer readable media including program instructions which when executed by a processor cause the processor to perform the following: normalizing operands a, b, and c for a floating-point operation;... BPAI- “Limiting the claim to computer readable media does not add any practical limitation to the scope of the claim. Such a field-of-use limitation is insufficient to render an otherwise ineligible claim patent eligible.”

Ex parte Atkin (BPAI 2009) Practice Points: System claims can be rejected under 101 Recite “An apparatus...” Avoid Miyazaki Enablement Trap- if claiming structure, try to Include structure specifically tailored to the invention's environment (e.g., “x-ray machine”) … and not uncommon/means-like terms “inferencer”, “label definer” Might Avoid Miyazaki Enablement Trap- use means plus function language 35 U.S.C. 112, paragraph 6.

Business Methods and Software Question: I do not deal with business method and software patents, so what is the big deal? Answer: Claims in other types of fields may fail Bilski's machine-or-transformation test. Medical diagnostic or treatment claims.

Business Methods and Software Federal Circuit in Bilski discussed several medical treatment cases. Discussing machine prong, it looked favorably to Grams – rejecting a claim directed to a process of diagnosing an 'abnormal condition' in a person by identifying and noticing discrepancies in results of unspecified clinical tests of different parts of the body. Footnote 27 mentions dissenters view of dismissal of writ certiorari in Metabolite case.

Business Methods and Software In Bilski, Abele case was discussed with respect to the transformation prong of the test. In Abele, the (broad) independent claim to a process of graphically displaying variances of data from average values was unpatentable because it “did not specify any particular type or nature of data; nor did it specify how or from where the data was obtained o what the data represented.” However, its dependent claim, which recites “said data is X-ray attenuation data produced in a two dimensional field by a computed tomography scanner”, was patentable. “the transformation of that raw data into a particular visual depiction of a physical object on a display was sufficient to render that more narrowly-claimed process patent-eligible.”

Classen v. Biogen IDEC (Fed. Cir. 2008)(Nonprecedential) US 5,723,283 The claims focus on several methods for evaluating vaccine immunization schedules.

Classen v. Biogen IDEC (Fed. Cir. 2008)(Nonprecedential) Claim 1 of patent 5,723,283: 1. A method of determining whether an immunization schedule affects the incidence or severity of a chronic immune-mediated disorder in a treatment group of mammals, relative to a control group of mammals, which comprises: immunizing mammals in the treatment group of mammals with one or more doses of one or more immunogens, according to said immunization schedule, and comparing the incidence, prevalence, frequency or severity of said chronic immune-mediated disorder or the level of a marker of such a disorder, in the treatment group, with that in the control group.

Classen v. Biogen IDEC (Fed. Cir. 2008)(Nonprecedential) The whole decision (Judge Moore with Judge Newman concurring) : "In light of our decision in In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc), we affirm the district court's grant of summary judgment that these claims are invalid under 35 U.S.C. § 101. Dr. Classen's claims are neither 'tied to a particular machine or apparatus' nor do they 'transform[] a particular article into a different state or thing.' Bilski, 545 F.3d at 954. Therefore we affirm.”

Classen v. Biogen IDEC (Fed. Cir. 2008)(Nonprecedential) Practice Tip: Even if your invention is neither a business method type invention nor a software type invention, check your claims to make sure that they satisfy Bilski's machine-or-transformation test.

Practice Before the Patent Office

USPTO Practice Topics: Current Rules on Hold. Future Rules- Deferred Examination? More Requirements for Practitioners. Improvements to PCT/Outside US filing and prosecution.

Practice Before the Patent Office Patent Office Rules

USPTO New Rules on Hold President Obama has ordered that new federal rulemaking cease until the White House Office of Information and Regulatory Affairs (OIRA) can review the rules.

USPTO Proposed Rule-Changes to Practice for Documents Submitted Eliminating the Fax Machine (Almost) Prohibits faxing any correspondence that can be submitted via EFS–Web Prohibits faxing any patent or TM correspondence that can be submitted via the Electronic Patent Assignment System (EPAS) Allows faxing correspondence not intended to become part of the official file record Limits fax submissions to one application or matter (except those involving maintenance fee payments or refunds) Requires use of fax number identified by the PTO for the particular type of correspondence, or else transmission is ineffective! Proposing an increased minimum font size for papers submitted in patent application, patent and reexamination proceedings Capital letters no smaller than 0.28 cm high (e.g., Times New Roman 12 point font)

FINAL PTO RULE: Patent Appeals ON HOLD New format requirements, i.e., 30-page limit, 14-point font. Extensions-of-time for Reply Briefs and Requests for Rehearing are no longer a matter of right. New required sections: Statement of Facts and Claims Support and Drawing Analysis.

FINAL PTO RULE: Patent Appeals OMB requested public comments on the costs and paperwork burdens with a November 7, 2008 deadline. Effective date of new appeals rules would have been December 10, 2008 BUT the new rules have been indefinitely delayed because “the review by OMB has not been completed.” Applicants are free to submit appeals following the old or new rules. Dec. 10 entry in Federal Register with announcement: http://edocket.access.gpo.gov/2008/pdf/E8-29297.pdf

Practice Before the Patent Office Future Rules- Deferred Examination?

Current Deferred Examination Requirements- Rule 103(d) Allows a deferral up to 3 years from the earliest priority date claimed Requirements for Request Fees- $430 Publication Fee under Rule 1.18(d)- $300 Processing Fee under Rule 1.17(i)- $130 Originally Filed Utility (or Plant) application or Nationalized PCT Allowed to be Published (no non-publication request or rescinded request) Application in condition to publish No Office Action or Notice of Allowance

Future of Deferred Examination Select comments from the roundtable discussion held on February 12, 2009. Deferred Examination would harmonize U.S. with the rest of the world. Question of whether the PTO has the authority to make the change. It appears that Deferred Examination likely will be back on the table this year. Written comment deadline was February 26, 2009, but now has been extend to May 29, 2009.

Practice Before the Patent Office New Requirements for Patent Practitioners

Patent Practitioners Annual Patent Practitioner Maintenance Fees Starting Spring 2009 - $118 Reminder to make sure your contact info is correct with PTO, notices will be sent in advance Info on how to update contact: http://www.uspto.gov/main/homepagenews/2008dec11.htm

“Continuing Education for Practitioners” (“CEP”) System Pilot launched late August 2008 Materials to cover recent PTO rule changes, revised patent examination guidelines, etc. If implemented, practitioners will be required to complete one CEP program per year.

Practitioners Withdrawing from Representation Eliminates requirement of 30 days between approval of Request to withdraw and expiration of time period for reply. Instead, practitioners must certify (SB/83): i. Notice to client, before expiration of reply period, that practitioner wants to withdraw; ii. Returned to client all papers and property (including funds); and iii. Notified client of any replies due and time frame for response.

Final Rules on Redefining “Practice” before the Office Effective September 15, 2008 Registration Authorizes: Preparing and prosecuting any patent application, consulting with or giving advice to a client in contemplation of filing a patent application or other document with the Office, and drafting the specification or claims of a patent application; Drafting an amendment or reply to a communication from the Office that may require written argument to establish the patentability of a claimed invention; Drafting a communication for a public use, interference, reexamination proceeding, petition, appeal to the Board of Patent Appeals and Interferences, or other proceeding; and Drafting patent assignments "if the practitioner is filing or prosecuting the patent application, and assignment does no more than replicate the terms of a previously existing oral or written obligation of assignment from one person or party to another person or party.” Registration Does Not Authorize: Offering an "opinion of validity of another party's patent when the client is contemplating litigation and not seeking reexamination“ PTO expects the new ethics rules to be the subject of a later, separate notice

July 23, 2008 PTO Notice – Scope of Foreign Filing Licenses Beware Outsourcing Exporting subject matter for preparation of patent applications to be filed in the US Requires clearance from the Bureau of Industry and Security (BIS) Not authorized by foreign filing license Exporting subject matter for purposes related to filing of foreign patent applications Foreign Filing License Export Administration Regulations (EAR) Governs use of dual-use commodities, software and technology (including technical data) If invention made in US, technical data in the form of a patent application, or in any form, can only be exported for purposes related to the preparation, filing or possible filing and prosecution of a foreign patent application, after compliance with the EAR or following the appropriate PTO foreign filing license procedure Reminder – Foreign filing licenses do not authorize the export of any technology that is not specifically submitted to the PTO as part of a U.S. patent application or a petition for a foreign filing license

Practice Before the Patent Office Improvements to PCT/Outside US Filing and Prosecution

PCT- Options to Save Money Australia now available as a PCT searching authority Effective: November 1, 2008 Press release: applications with “claims relating to particular mechanical engineering or analogous fields of technology may be excluded”

PCT- Options to Save Money For PCT applications, consider a non-U.S. International Searching Authority (ISA), such as Korea or Australia. Korea is the least expensive option. As of December 1, 2008, the search fee for Korea will be $220 (as compared to the U.S. $2080 search fee in January). Korea will not search certain types of technology, such as selected biotechnology inventions. Australia now can act as an International Search Authority (ISA) for U.S. originated PCT applications. The search fee for Australia is currently $1302, which is less than the $2,080 current U.S. search fee. However, the technology that can be searched by the Australian Patent Office is extremely limited. For example, Australia excludes searches of mechanical engineering type inventions.

PCT- Options to Save Money Below is a chart summarizing the options. Please note that the search fees are based on March 2009 figures. ISA Office Search Fee Benefits Issues Australia $1091 Less expensive Only searches applications in very limited technology fields. For example, it does not search all mechanical engineering and some biotechnology type inventions. Europe $2164 Perceived high quality search Expensive, and it will not conduct searches for applications that concern some types of technologies. Korea $609 Inexpensive and receive results relatively quickly. Limits the technology of applications that can be searched. United States of America $2080 Expensive and does not supply the search report in a timely fashion (e.g., before Chapter II deadline).

Outside US Prosecution Expansion of members in Patent Prosecution Highway Program. Full Implementation with Japan Added- Australia, China, Europe, Korea Common Application Format between EPO, JPO and USPTO. Triway Pilot Program- Worksharing between the USPTO, EPO and JPO with Paris Convention Applications

Enforcement and Term

Enforcement and Term Topics: Patent Term Adjustment Patent Marking Infringement Patent Litigation Defenses

Patent Term Adjustments Enforcement and Term Patent Term Adjustments

Wyeth v. Dudas (District of Columbia 2008) Overturned the PTO’s interpretation of Patent Term Adjustment Might be entitled to additional PTA, review PTA determinations within 2 months of issue At least three other cases filed.

Enforcement and Term Patent Marking

Pequignot v. Solo Cup Co. (ED VA no. 1:07cv00897) Marking False marking case allowed to proceed since lids marked with expired patent nos. Still have to prove intent to deceive public, but case made it past summary judgment Note Washington DC patent attorney, Matthew Pequignot, filed another complaint against Gillette. Pequignot v. Gillette and P&G.

Enforcement and Term Infringement

Egyptian Goddess v. Swisa, Inc. (Fed. Cir. 2008) Loosened the standard for design patent infringement Previous test = ordinary observer + point of novelty New test = ordinary observer, in light of the prior art Eliminated point of novelty requirement for infringement

Patent Litigation Defenses Enforcement and Term Patent Litigation Defenses

Aristocrat Tech. v. Int'l Game Tech. (Fed. Cir. 2008) Patent concerns a system to improve the jackpot for slot machines.

Aristocrat Tech. v. Int'l Game Tech. (Fed. Cir. 2008) Prosecution Timeline: July 8, 1997 & September 9, 1997 Australian Provisional Applications filed July 8, 1998 PCT/AU98/00525 filed claiming priority to Australian apps January 10, 2000 (Monday) 30 month nationalization deadline § 371 national stage paperwork apparently submitted by this date January 11, 2000 filing fee submitted one day late June 13, 2000 Notice of Abandonment mailed w/note that Applicants may consider filing petition to revive under Rule 137 September 15, 2000 Petition to Correct Date-In submitted June 5, 2001 PTO mailed denial of Petition to Correct Date-In July 18, 2002 Aristocrat filed Petition to Revive under Rule 137(b) note: > 6 mo after PTO denial of Petition to Correct Date-In September 2, 2002 Petition to Revive granted

Aristocrat Tech. v. Int'l Game Tech. (Fed. Cir. 2008) Filed a petition to revive as unintentional, but § 371: Title: “National stage: Commencement” “(d) ...Failure to comply with these requirements shall be regarded as abandonment of the application by the parties thereof, unless it be shown to the satisfaction of the Director that such failure to comply was unavoidable.” (Emphasis added).

Aristocrat Tech. v. Int'l Game Tech. (Fed. Cir. 2008) Federal Circuit: Statute spells out the defenses for patent infringement and this is not one of them. Cites Magnivision “[p]rocedural lapses during examination, should they occur, do not provide grounds of invalidity. Absent proof of inequitable conduct, the examiner’s or the applicant’s absolute compliance with the internal rules of patent examination becomes irrelevant after the patent has issued.”

Aristocrat Tech. v. Int'l Game Tech. (Fed. Cir. 2008) Federal Circuit's Reason: “If any prosecution irregularity or procedural lapse, however minor, became grist for a later assertion of invalidity, accused infringers would inundate the courts with arguments relating to every minor transgression they could comb from the file wrapper. This deluge would only detract focus from the important legal issues to be resolved—primarily, infringement and invalidity.”

Sponsored by the Intellectual Property Law Section Indianapolis Bar Association: 2008 Year in Review Patent Law and Practice Chuck Schmal cps@uspatent.com (317)634-3456 Sponsored by the Intellectual Property Law Section