IP Law Bulletin

Just three and a half years ago, the European Patent Office (EPO) changed its rules to limit the time period during which divisional applications could be filed. As explained in our March 2010 IP Bulletin, the rule change only allowed new divisional applications to be filed within 24 months of the first communication from the Examining Division issued in the family, absent a unity objection in a subsequent application. This change led to a rash of European divisional patent application filings prior to April 1, 2010. The EPO, however, has now reversed course. Last month the Administrative Council approved a rule change that permits divisional applications to be filed at the EPO based on any pending parent patent application, regardless of how long the application has been pending. Under this rule change, a divisional application could be filed up until the date that the application from which the divisional application is pending issues. While the details related to the changes have not yet been published, it is anticipated that there will be an additional fee to file a divisional application that claims priority to an earlier application that itself is a divisional application, in an effort to curb long sequences of divisional application filings. Importantly, the new rule will be retroactive for any pending application, even if the application was previously subject to the 24 month rule. Thus, applicants with applications pending at the EPO, particularly those having applications that are not currently eligible for further divisional applications, may want to consider delaying grant until after April 1, 2014, if feasible, to allow for the opportunity to file additional divisional applications. Stay tuned to the IP Bulletin for the particulars regarding the new EPO divisional rules.

On December 18, 2013, a series of new U.S. patent rules will become effective. The rule changes update the U.S. patent rules in view of a 2012 U.S. law passed to harmonize certain U.S. laws with an international agreement and international treaty to which the United States is a party. The four most significant changes are:

The Patent Trial and Appeal Board (PTAB) at the USPTO recently issued a rare precedential opinion in Ex Parte Mewherter that addresses subject matter eligibility of computer program product claims under 35 U.S.C. § 101. The PTAB affirmed the examiner’s rejection of a claim that recited a “machine readable storage medium” as being directed to non-statutory subject matter under 35 U.S.C. § 101. In particular, the PTAB held that the term “storage” in “machine readable storage medium” did not save the claim from encompassing non-statutory signals, carrier waves, and the like. In light of this decision, patent applicants should continue to include the modifier “non-transitory” in software medium claims to avoid § 101 issues. Explicit support for the term “non-transitory” can be provided in the specification at the application drafting stage. Claims to a “non-transitory” medium can also be properly supported even when the specification does not expressly include the term, per a USPTO Official Gazette Notice that offers guidance on this issue. Patent applicants should also continue to provide written description support for propagating signals per se, as other jurisdictions such as Europe consider such embodiments to be patent eligible.

The U.S. Supreme Court recently agreed to hear two patent-related cases, as well as a copyright case. The copyright case, Petrella v. Metro-Goldwyn-Mayer, Inc., involves the doctrine of laches, and in particular whether a copyright holder can sue for a new act of infringement, such as distributing another copy of a movie, when the copyright holder failed to assert infringement claims during previous distributions. The two patent-related cases, Octane Fitness, LLC v. ICON Health & Fitness, Inc. and Highmark Inc. v. Allcare Health Management Systems, involve challenges to the Federal Circuit’s high standard for awarding attorneys’ fees to the prevailing party in patent infringement cases. It is anticipated that the two patent cases may impact litigation by non-practicing entities (NPEs), sometimes referred to as “patent trolls,” because a decision that makes it easier to shift attorneys’ fees to the non-prevailing party may serve as a deterrent to NPEs suing established companies. Congress is also considering action that may negatively impact NPEs. Virginia Representative Bob Goodlatte has introduced a bipartisan bill, dubbed the Innovation Act, which aims to encourage innovation by creating a number of procedural safeguards against frivolous patent infringement lawsuits, including heightening the pleading requirement, limiting discovery, and shifting fees to the prevailing party. Of course, given that patent reform took center stage just two years ago in the form of the Leahy-Smith America Invents Act (AIA), it seems more likely that Congress will take-up other issues before it opens debate on the Innovation Act, if it does so at all. Stay tuned to the IP Bulletin for further developments on the Supreme Court cases and for pertinent legislative updates.

Defendants in patent litigation suits often seek reexamination of the asserted patents in hopes that the United States Patent and Trademark Office (USPTO) will find the patents to be invalid, and therefore unenforceable. As a patent owner seeking to assert a patent, it is often critical that the patent proceed through reexamination unscathed and that the patent remain enforceable. It can also be desirable for the reexamination to proceed quickly, as the related litigation is often stayed pending the outcome of the reexamination. A quick reexamination can only be achieved when appeals are avoided.

Courts and litigants alike have struggled to make sense of claim vitiation, the idea that reading a claim element to encompass an accused product would so stretch the claim language as to “vitiate” (i.e., make ineffective) that claim element. Claim vitiation has been invoked as an exception to the judicially created doctrine of equivalents, which allows courts to find infringement even though a claim element is not literally present in the accused product. Over the past year, however, the Federal Circuit has emphasized that claim vitiation is not an exception to the doctrine of equivalents, but merely a finding under the doctrine of equivalents test.

The Federal Circuit rendered a decision in Novo Nordisk A/S v. Caraco Pharmaceutical Laboratories, Ltd. on June 18, 2013, finding that a Novo Nordisk diabetes treatment patent involving the combination of the drugs metformin and repaglinide was an obvious combination of known diabetes treatment drugs, despite certain factual findings of the combination’s unexpected results. Combination drugs, such as Novo Nordisk’s metformin-repaglinide treatment for diabetes, have been increasingly found to be effective for treating a variety of ailments, but their development is typically incredibly expensive and time-consuming. This Federal Circuit decision could adversely affect investment in developing combination drugs, which in turn would affect the availability of these often very effective treatments. The decision also highlights the deference (or lack thereof) given to patent examiner findings during prosecution.

Hiring patent agents—persons who do not hold a license to practice law but are licensed to practice in front of the United States Patent and Trademark Office (USPTO)—can be an attractive alternative to more costly patent attorneys. Typically, patent agents can have all of the experience and skills necessary to prosecute patents at the USPTO, but often work at discounted rates in comparison to their attorney brethren. Thus, as companies continue to strive toward lean operation, patent agent hiring may increase. This practice, however, is not without risk. Notably, and as addressed in this article, attorney-client privilege may not attach to patent agent work, even when that work is solely related to representation at the USPTO.

In response to concerns about the stringency of unity of invention requirements, the Japanese Patent Office (JPO) released new examination guidelines on July 1, 2013, which expand the scope of claims that meet the unity of invention requirement and are therefore eligible for examination. The new guidelines provide for a less formalistic approach to assessing unity of invention and focus instead on the relation of a claim to the novel features of the invention. The guidelines will apply to applications filed on or after January 1, 2004, and will also affect examination of claims of an application filed on or after April 1, 2007, that have been amended in response to an Office Action.

While most of the changes resulting from the Leahy-Smith America Invents Act (AIA) have been implemented, a few provisions that will save applicants money do not go into effect until January 1, 2014. These cost savings relate to post-issuance fees and electronically filed assignment fees for all patent applicants, and Patent Cooperation Treaty (PCT) patent applications for small entities and micro-entities. Patent applicants may want to consider delaying the payment of certain fees in order to take advantage of these cost savings. For example, patent applicants who can pay an issue fee for a utility patent on or after January 1, 2014 will save $1120 because the issue fee will be reduced from $1780 to $960 and the $300 publication fee will be eliminated. Small entities and micro-entities will also pay lower issue fees as of January 1, 2014, with the issue fee for small entities being $480 (previously $890) and the issue fee for micro-entities being $240 (previously $445). Further, any size applicant can electronically file an assignment on January 1, 2014 or later for free, rather than paying the current $40 fee. Finally, beginning January 1, 2014, certain PCT application fees, including transmittal and search fees, will be reduced for small and micro-entities. For example, while any applicant used to have to pay a search fee of $2080, small entities will only have to pay a search fee of $1040 and micro-entities will only have to pay a search fee of $520.