For many years, the United States Patent and Trademark Office (PTO) has provided, and still does provide, a 50% fee discount to “small entity” patent applicants. The Leahy-Smith America Invents Act (AIA) introduces an additional applicant classification: the “micro entity.” At least under the current, not-yet formally adopted definitions in the AIA, micro entity applicants are entitled to a 75% reduction in fees associated with filing, searching, examining, issuing, appealing, and maintaining a patent application. However, even though applicants already have the ability to claim micro entity status, because the PTO has not yet set fee schedules reflecting this new status, the benefits of this new status are not anticipated to be seen until 2013.
Micro entities are defined in a new section of title 35 added by the AIA—35 U.S.C. § 123. The new section requires applicants seeking micro entity status to make four certifications. Alternatively, applicants associated with an institution of higher education can also claim micro entity status.
First, an applicant must certify that it qualifies as a small entity under the existing requirements of 35 U.S.C. § 41. This means the applicant must be an individual, a small business having less than 500 employees, or a non-profit organization. It is important to note that if the applicant has assigned or licensed rights to the invention (or is under an obligation to do so) to another party that does not meet these requirements, small entity status, and thus micro entity status, cannot be claimed.
Second, an applicant must certify that he or she has not been named as an inventor in more than four previously-filed United States patent applications. Neither provisional applications nor Patent Cooperation Treaty (PCT) applications that do not subsequently enter the United States in a national stage filing qualify as a previously-filed United States patent application. Foreign applications also have no bearing on this patent application count.
Third, the applicant must certify that he or she did not have a gross income in the calendar year preceding the year the application was filed that was greater than three times the median household income. For the past few years, the median income has been around $50,000, so the gross income limit is approximately $150,000.
Finally, the applicant must certify that he or she has not assigned or conveyed (or is under an obligation to do so) a license or ownership interest in the application to another party whose gross income in the preceding calendar year exceeded the three-times-median-income limit discussed above. Importantly, for inventors looking to leave current jobs to start new companies, applications that have been assigned (or applications that are obligated to be assigned) as a result of previous employment do not count against the four previously filed patent applications for an applicant.
For each of these four certifications, if the application includes multiple applicants, each applicant must be able to make each of the four certifications for the applicants to be able to assert micro entity status.
The current, not-yet formally adopted definitions in the AIA also allows for applicants associated with an institution of higher education to take advantage of the micro entity fee discounts. In order to do so, applicants must certify that their employer (from whom they receive the majority of their income) is an institution of higher education. Applicants must also certify that they have assigned (or were under an obligation to assign at the time of the invention) a license or other ownership interest in the application to the institution of higher education.The four certifications discussed above are inapplicable to a micro entity status claim related to being associated with an institution of higher education.
Applicants associated with universities and other educational institutions may wonder which institutions qualify under the AIA. The AIA defines institutions of higher education by specific reference to the Higher Education Act of 1965. That statute defines institutions of higher education as public or non-profit accredited institutions that admit post-secondary students for programs lasting 2 years or longer. Importantly, the Higher Education Act of 1965 defines an institution of higher education as being located in the United States (including its territories), which is in contrast to the small entity regulations that include institutions located in any country as non-profits eligible for small entity status. As a result, foreign universities will not be able to take advantage of the micro entity fee discounts, at least under the current, not-yet formally adopted definitions in the AIA.
The new micro entity status can provide significant savings to applicants who, in many cases, can use the saved capital to help build businesses around their innovations. Applicants must be weary, however, of actions that may invalidate their micro entity status. For example, assigning or licensing rights to a party that does not qualify as a micro entity can revoke the status, and require payment of higher fees to the PTO. The penalties for failing to appropriately update an applicant’s status with the PTO and pay any required fees can be severe. These actions can be regarded as inequitable conduct (a fraud on the PTO) that can result in the loss of the application or patent.
The provisions of the AIA creating the micro entity status went into effect upon President Obama’s signature on September 16, 2011. However, applicants cannot presently take advantage of the micro entity fee discount. This is because a significant amount of administrative rulemaking is still required at the PTO to implement the new provision and other provisions of the AIA. In fact, the AIA gives the PTO Director authority to impose additional income limits, annual filing limits, or other limits on who may qualify as a micro entity, meaning the micro entity status may have additional limitations upon implementation. In a press release dated September 21, 2011, the PTO confirmed that the micro entity fee discount will not be implemented until a later date. The PTO has more recently stated that implementation of the discount will likely take place in 12 to 18 months, putting the implementation date sometime in 2013.
Applicants looking to take advantage of the new micro entity status should monitor the PTO website for announcements regarding the fee structure, and should further consult a patent attorney to ensure they appropriately claim the new status.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
As discussed in our March issue, earlier this year the United States Patent and Trademark Office (PTO) published a proposed prioritized examination procedure to allow applicants to speed up patent application prosecution by meeting particular requirements, including paying an additional fee. However, the PTO later delayed the implementation of the “fast track” or Track I procedure because of funding limitations—the PTO could not hire the number of new examiners needed to meet “fast track” pendency goals without impacting the examination of non-prioritized applications. The delay is now over, as the Leahy-Smith America Invents Act (AIA) brought the “fast track” back as of September 26, 2011.
Prioritized examination (PE) provides a patent applicant the ability to receive expedited review of his or her original utility or plant application for an additional fee if the application is filed on or after September 26, 2011. The expedited review is aimed to result in a final disposition within twelve months of prioritization. Final disposition can include the mailing of a notice of allowance or a final office action, filing a notice of appeal or a Request for Continued Examination (RCE), or abandoning the application. Prioritization is lost after filing an RCE, or through the course of an appeal or interference.
Applicants receive prioritized status by filing a request (Form PTOSB424) with a $4800 fee, exclusive of typical filing and prosecution fees. Small entities receive a 50% discount. It remains to be seen whether micro entities will receive a 75% discount, as the PTO has yet to set its fee schedules for micro entities. Applications subject to PE can have up to 4 independent claims and 30 total claims, and excess claim fees do still apply. If an applicant amends claims to exceed the claim limits, PE is terminated. Currently, the PTO is limiting prioritized applications to 10,000 per fiscal year, and for the uninitiated is providing a Quick Start Guide to help applicants figure out how to file their requests.
When an application enters Track I, it is accorded special status and placed on the examiner’s special docket throughout the course of prosecution until a final disposition is reached. The time periods for reply are the same as for standard, non-prioritized applications, unlike accelerated examination (AE). However, any petition for an extension of time to file a reply or request for suspension will automatically terminate the application’s prioritized status, and the application will revert to the standard prosecution track.
The PE procedure is not intended to replace the currently available AE procedure. Both options co-exist as alternatives. AE has a lower filing fee, limits applicants to 3 independent and 20 total claims, requires up-front search and analysis, and limits response time periods to one month. It is anticipated that most applicants will find PE more palatable than AE because under PE there is no requirement to create written prosecution history by performing and submitting an up-front search and analysis.
The PTO website provides statistics on PEs. As of November 4, 2011, for the 2011 fiscal year (which ended on September 30, 2011), 852 total prioritized applications were filed, 365 of which have been granted and 4 of which have been dismissed. For the 2012 fiscal year (which concludes on September 30, 2012), 377 prioritized applications have been filed, 26 of which have been granted and none of which have been dismissed. There does not appear to be a present danger of being locked out of PE during the 2012 fiscal year due to the 10,000 application limit.
As the PE procedure has only just begun, it is difficult to predict whether the PTO will be able to meet its 12 month pendency goal. At its current rate, this goal appears achievable, but if applicants are adopting the “wait-and-see” approach, these early successes may result in an increase in prioritization requests and pendency times.
Applicants interested in expediting the prosecution of their applications should consult their patent attorneys about pursuing this option, particularly when attaining a patent within a year may provide real value for the applicants.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
The Leahy-Smith America Invents Act (AIA) broadens the scope of prior art that can be used to reject claims of a patent application or to invalidate claims of a patent. Under the current statute, a prior sale, commercial use, or public disclosure not otherwise published made in a foreign country could not (and cannot through March 16, 2013) be used as prior art unless the foreign sale, use, or disclosure appeared in a publication, patent, or patent application. The new law, which includes a revised 35 U.S.C. § 102, expands the scope of prior art to make it more consistent with patent laws in most foreign countries by removing the limitation that a prior sale, commercial use or public disclosure must be domestic to constitute prior art. Accordingly, the new law extends available prior art to include any subject matter that is publically available in the world prior to the filing date of the application. This new scope applies to all applications with an effective filing date on or after March 16, 2013.
Naturally, the effect on applicants and practitioners is that the expanded scope of prior art may make it more difficult to obtain or enforce a patent. To the extent a use, sale, or other public disclosure is documented in a foreign country, it can be used to reject a patent application or invalidate a patent. While it remains to be seen what evidence of a foreign sale, use, or other public disclosure will be sufficient to rely upon as prior art, it is anticipated that this type of art will more likely be relied upon by a defendant in patent litigation because, at least in the near term, it will likely be difficult for an examiner to obtain and verify evidence of such a foreign disclosure. The examiner’s resources in this context are limited, particularly in light of the time constraints under which he or she typically operates.
One way in which examiners can be made aware of foreign disclosures, of course, is through the applicant and practitioner’s duty of disclosure. The expanded scope of prior art under the new law will require care by applicants and practitioners to properly cite in an Information Disclosure Statement any sales, uses, or other public disclosures not otherwise published in foreign countries that could affect the patentability of the application. The impact on practitioners and applicants in this regard is anticipated to be minimal because an applicant’s own sale, use, or public disclosure in a foreign country will often be in a country in which the applicant is also seeking patent protection. Thus, because most other countries do not allow a one-year grace period between disclosures and patent application filings, it is anticipated that foreign sales, uses, or other public disclosures by an applicant will typically not affect the patentability of the applicant’s United States patent application.
While the expanded scope of prior art may have only a minimal impact on Information Disclosure Statement practices, it may have a more significant impact on actions taken by applicants and inventors in foreign countries prior to filing a patent application. Previously, sales, commercial uses, and other public disclosures not documented in a patent or printed publication in foreign countries did not qualify as prior art, and thus applicants and inventors could make sales in foreign countries or present at a conference in a foreign country without distributing any published materials without affecting their patent rights in the United States. Not anymore. Applicants should take care not to make any such public disclosures if they desire to prevent their one year clock for filing a patent application in the United States from beginning to tick. Applicants, such as universities and hospitals in particular, should ensure their inventors do not make public disclosures at conferences, regardless of location, without first filing for patent protection or filing within the one year grace period afforded by the new U.S. “first-to-file” system. Even if an inventor is planning to attend a conference in a foreign country but not formally present at the conference, applicants should make sure the inventor is aware of the consequences of making an unintended public disclosure during the conference because such a disclosure could impact the applicant’s patent rights.
Because the scope of prior art does not expand until March 16, 2013, the effect of this expansion on various practices is not yet fully vetted. For example, at this time it does not appear that the expanded scope of prior art will apply to pre-issuance submissions, as the relevant provisions in the AIA refer only to the submission of patents, published applications, and printed publications. Thus, third parties aware of a foreign use that might serve as prior art appear to have to wait until after a patent has granted to challenge it in a post-grant review proceeding or litigation.
Overall, the changes in the scope of prior art, along with other provisions of the AIA, provide further incentive to file patent applications as soon as possible so that applicants can limit the possible universe of prior art that might be applied to reject the application or invalidate the resulting patent.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
Recent European Patent Convention (EPC) rule changes were recently passed to streamline European patent prosecution. Summaries of various important aspects of these rule changes are discussed below, including how these changes may affect European patent prosecution strategy.
Accelerated Prosecution
Under the amended rules, applicants have six months to respond to a Rule 161 or Rule 162 communication, where the previous term was a single month. This change primarily affects clients who wish to expedite prosecution, as an applicant can only obtain accelerated prosecution by waiving the right to Rule 161 and Rule 162 communication. To qualify for accelerated prosecution, upon European regional phase entry an applicant must pay all claim fees and file a response to the Written Opinion/International Preliminary Report on Examination. Otherwise, the European Patent Office (EPO) will determine the requirements are fulfilled and then, after the six month deadline has passed, will forward the application to the Search Division for a supplemental search (where the EPO is not the International Searching Authority) or to the Examining Division (where the EPO is the International Searching Authority). This process slows down prosecution, regardless of when the response Rule 161/162 response is filed.
Voluntary Amendments
Where the EPO is the International Searching Authority (ISA) or International Preliminary Examining Authority (IPEA), Rule 161(1) governs amendment of the application. Within six months of the Rule 161 communication, the applicant must respond to a negative Written Opinion or International Preliminary Examination Report and pay excess claim fees, and the applicant may voluntarily amend the claims. Where a jurisdiction other than the EPO is the ISA, Rule 161(2) governs, and the applicant must pay excess claim fees within 6 months of the Rule 161 communication but need not comment on the Written Opinion or International Preliminary Examination Report. Because excess claim fees are paid at this stage, applicants may choose at this time to reduce the number of claims, prioritize claims, and remove non-patentable subject matter.
Divisional Applications
According to Rule 36(1)a, a voluntary divisional application must be filed by the earlier of: twenty-four months from issuance of a first communication from the Examining Division or the date of grant or refusal of the parent application, i.e. the parent must be pending. According to Rule 36(1)b, a mandatory divisional application must be filed by the earlier of twenty-four months from issuance of a first communication from the Examining Division raising specific unity objection for the first time, or the date of grant or refusal of the parent application, i.e. the parent must be pending. Thus, decisions regarding the filing of divisional applications may need to occur earlier than under the previous rules.
Search
According to Rule 62a, a European patent should only contain one independent claim in the same category, with the exception where the claims relate to either (1) a plurality of interrelated products, (2) different uses of a product or apparatus, or (3) alternative solutions to a problem, where it is inappropriate to cover the alternatives in a single claim. Prior to the search, the applicant is asked to indicate independent claims to be searched, and only searched subject matter will be examined. The EPO will only search the first listed independent claim in any given category, there is no opportunity for the payment of additional search fees, and unsearched subject matter must be deleted.
According to Rule 63, claims deemed to lack clarity are excluded from searching and patentability. Prior to search, the applicant is asked to file a statement indicating subject matter to be searched. Only searched subject matter is examined. Therefore, if the applicant fails to respond, then no search will be conducted. Alternatively, if the applicant’s response does not address the problem, no search will be conducted. Applicants and practitioners should ensure that claims are clear, should remove unpatentable subject matter from the claims, and must always respond to a Rule 63 EPC communication is search and examination of the claims is desired.
Examination
Where the U.S. Patent and Trademark Office is the ISA or when the application is a directly filed European application, the applicant must file a response to the Extended European Search Report. If the applicant does not respond within the six months deadline, then the application is deemed withdrawn.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
In a recent en banc decision of the Federal Circuit, TiVo Inc. v. EchoStar Corp., U.S. Court of Appeals for the Federal Circuit, 2009-1374, decided April 20, 2011, the Court unanimously overruled its previous two-step test, the KSM test, regarding patent infringement in a contempt hearing, which first requires a threshold inquiry of the appropriateness of a contempt hearing before a district court can adjudge whether a redesigned product continues to infringe. The court held that the KSM inquiry “confuses the merits of contempt with the propriety of initiating contempt proceedings,” and replaced that test by allowing broad discretion to the district court to determine the propriety of a contempt proceeding based on the facts presented. While the court held that the district court did not abuse its discretion in holding the contempt proceedings, it vacated the finding of contempt and remanded to the district court to make factual findings under the new guidance. Seven judges joined the majority opinion, written by Judge Lourie, while five judges joined Judge Dyk’s dissenting-in-part opinion.
This case’s somewhat convoluted procedural history started when TiVo initially filed a patent infringement suit in the Eastern District of Texas alleging that EchoStar’s television receivers infringe claims of its U.S. Patent No. 6,233,389 (the ‘389 patent). After a $74 million jury verdict finding EchoStar liable for willful infringement, the district court issued a permanent injunction against EchoStar. Without appealing the permanent injunction, EchoStar spent time and effort redesigning its receivers and obtaining opinions of counsel that the redesigned devices no longer infringed the ‘389 patent. After the district court found EchoStar in contempt of its permanent injunction order despite these efforts, EchoStar appealed the decision. A panel of the Federal Circuit affirmed the district court’s decision, and EchoStar petitioned for a rehearing en banc.
The Federal Circuit held that the KSM two-step inquiry was unsound, clarified the standards governing contempt proceedings in patent infringement cases, and vacated the district court’s finding of contempt of the infringement provision of the permanent injunction and remanded to make a determination of colorable differences under the newly articulated standard. Preliminarily, the court dismissed EchoStar’s good faith defense. Pointing to Supreme Court precedent, the court stated that “a lack of intent to violate an injunction alone cannot save an infringer from a finding of contempt.” The court did indicate that, though not a defense to civil contempt, good faith efforts may be considered in assessing penalties. After discussing the replacement of the unworkable KSM inquiry, the court held that, given the district court’s familiarity with all the facts, there was no abuse of discretion in the decision to hold the contempt proceedings.
The court also clarified the colorable differences test: instead of focusing solely on infringement by the newly accused devices, the initial focus should be on the “differences between the features relied upon to establish infringement and the modified features in the newly accused products.” When modifications to those features are “significant,” the newly accused product will be deemed “colorably different” from the adjudged infringing one. If the court determines that the modifications are not colorably different, then the court must find that the newly accused product continues to infringe the relevant claims, making the evaluation on a limitation by limitation basis. The patentee is bound by any prior claim constructions and must prove violation of the injunction by clear and convincing evidence. In the present case, since the district court did not make its contempt determination based on this clarified test, the Federal Circuit vacated the contempt finding and remanded to make the assessment under the new guidance.
The majority and minority divided on the issue of whether provisions of an injunction order can be directly challenged within a contempt proceeding, and, thus, the minority disagreed with the decision to uphold the finding of contempt. The dissent, led by Judge Dyk, stated that an accused party cannot be held in contempt for violating an injunction that does not clearly reach the accused conduct. Judge Dyk noted that policy dictated that accused infringers design around patents and that the permanent injunction at issue did not address design-arounds. The majority, on the other hand, held that lack of clarity of the injunction was not a defense; challenges to clarity are appropriately made as direct appeals or motions to modify the injunction.
The decision therefore suggests that any ambiguities in an injunctive order are best challenged at the time of granting to clarify the scope of the order. The decision also lowers the threshold for initiating a contempt proceeding, but focuses the “colorable differences” inquiry on features that were relied upon in the initial infringement finding. Thus, in cases where there may be significant modifications in these features, the patentee may be better off initiating a new infringement suit against the redesigned products rather than a contempt proceeding, despite the fact that the contempt proceeding is now easier to initiate.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
In the recent decision of CyberSource Corp. v. Retail Decisions, Inc., the Federal Circuit affirmed the District Court for the Northern District of California’s summary judgment holding two software method claims to be invalid because they are drawn to an un-patentable mental process. CyberSource’s claimed invention relates to a method for detecting fraud in a credit card transaction by utilizing Internet Protocol (IP) information, e.g., a user’s IP address. The court held that the method claims do not meet the requirements of the machine-or-transformation test and, furthermore, recite an un-patentable mental process that could be performed in a human mind.
Of particular note in this case is the court’s treatment of the second claim under consideration, a so-called “Beauregard claim” directed to a computer readable medium containing program instructions to execute the disclosed method. Specifically, the court declined to recognize the computer readable medium as a statutory manufacture or machine and invalidated the claim on the same grounds as the method claim. The court stated that it looks to the underlying invention of the claim and is not bound by the “statutory category…a claim’s language is crafted to literally invoke.” In this case, the underlying invention of both claims was identical, i.e., the method of fraud detection. Explaining further, the court noted that merely reciting a computer readable medium does not guarantee patent eligible subject matter where a computer device is not required to perform the method.
Although post-Bilski law is still in an early development stage, practitioners should consider implications this holding may have when drafting software method claims. In particular, practitioners should consider drafting method claims that cannot be performed in the human mind alone. Of particular help may be two cited cases, SiRF Tech, Inc. v. Int’l Trade Comm’n and Research Corp. Techs. V. Microsoft Corp., in which software methods were held to be patentable due to the inability to perform the methods without a computer or other manufactured device.
To read the Federal Circuit’s opinion, click here.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
As our readers likely know, an en banc panel of the Federal Circuit substantially raised the bar for proving inequitable conduct in patent cases in its recent decision in Therasense, Inc. v. Becton, Dickinson and Co., Nova Biomedical Corp. and Bayer Healthcare LLC. The court raised the bar both with respect to the intent and the materiality prongs of an inequitable conduct analysis. The court established the “knowing and deliberate” standard for proving specific intent by clear and convincing evidence, stating that for an applicant to have the specific intent necessary to commit inequitable conduct, the applicant must: (1) know of a reference, (2) know that the reference is material, and (3) make a deliberate decision to withhold the reference. Further, the court significantly raised the bar with respect to materiality by supporting the “but-for materiality” standard. Under this standard, undisclosed prior art is “but-for material if the PTO [Patent and Trademark Office] would not have allowed a claim had it been aware of” that art. A more in-depth discussion of the Therasense decision can be found in the Nutter client alert found here.
It is anticipated that the Therasense decision, in combination with the heightened pleading standards set forth in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009), may lead to fewer assertions of inequitable conduct in litigation. The Therasense decision will almost certainly lead to litigants seeking more dismissals of issues related to inequitable conduct by summary judgment motions. Although it is not anticipated that the Therasense decision will significantly reduce the patent prosecutor’s burden of citing prior art references to the PTO to comply with an applicant’s duty of disclosure, prosecutors may wish to re-evaluate their current practices, particularly in view of proposed Therasense-based rule changes presented by the PTO. The PTO’s proposed rule changes would place the duty of disclosure materiality standard in-line with the “but-for materiality” standard endorsed by Therasense. Stay tuned to Nutter’s IP Bulletin for further updates once the comment-making period for on the proposed rule changes closes on September 19, 2011.
To read the full text of the Therasense opinion, click here.
To read the PTO’s proposed rule changes related to the duty of disclosure, click here.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
On June 9, 2011, the U.S. Supreme Court issued its much anticipated decision in Microsoft v. i4i. At issue was whether patents would continue to enjoy a strong presumption of validity during litigation. More specifically, whether the clear and convincing evidence standard necessary to invalidate a patent would be overturned. Microsoft had challenged that standard; arguing that a lower standard of “preponderance of the evidence” should be sufficient. The Supreme Court unanimously rejected Microsoft’s argument and affirmed the Federal Circuit’s long-standing strong presumption of proof. As a result, the clear and convincing evidence standard remains, even for prior art not considered by the Patent Office. However, the Supreme Court did note that when new prior art is asserted by a defendant, the jury should be given instruction on that point and also instructed to consider that fact when determining whether an invalidity defense has been proven by clear and convincing evidence.
The United States Patent and Trademark Office (USPTO) recently announced that it is expanding the First Action Interview Pilot Program to include all utility applications in all technology areas. As under the previous program, which was limited by technology area and filing date, an applicant is entitled to a first action interview, upon request, prior to the first Office Action on the merits. The new pilot program is scheduled to run through May 16, 2012.
To take advantage of this program, applicants must electronically file a request for first action interview at least one day before a first Office Action appears in the Patent Application Information Retrieval (PAIR) system. Then, once the application is taken up for examination, the examiner will issue a Pre-Interview Communication containing the results of a prior art search. In response to this communication, the applicant must either file a request not to have a first action interview or schedule the interview and file a proposed amendment or remarks. If the applicant chooses not to have a first action interview, a First Action Interview Office Action will promptly issue with a shortened period for response of one month or thirty days. If the applicant chooses an interview, and the applicant and examiner reach agreement during the interview on the patentability of all claims, a Notice of Allowability will be issued promptly after the interview. If agreement is not reached, a First Action Interview Office Action will be issued with a shortened period for response of one month or thirty days, with limited extensions of time.
Some eligibility requirements exist for participation in the First Action Interview Pilot Program:
- The application must be a non-reissue, non-provisional utility application filed under 35 U.S.C. 111(a), or an international application that has entered the national stage in compliance with 35 U.S.C. 371(c).
- The application must contain three or fewer independent claims and twenty or fewer total claims. The application must not contain any multiple dependent claims. Applicants may file a preliminary amendment to cancel claims in excess of 20 and/or multiple dependent claims to make the application eligible for the pilot program.
- The claims must be directed to a single invention. If the Office determines that the claims are directed to multiple inventions, e.g., in a restriction requirement, the applicant must make an election without traverse or withdraw the application from the pilot program.
- The request for a first action interview must be filed electronically.
- The request for a first action interview must be filed at least one day before a first Office Action on the merits appears in the PAIR system for the application.
- The request for a first action interview must include a statement that applicant agrees not to file a request for a refund of the search fee and any excess claim fees paid in the application after the mailing or notification date of the Pre-Interview Communication.
Although the First Action Interview Pilot Program may not accelerate the time before an application is searched and considered by an examiner, the program may help accelerate prosecution once an Examiner is ready to consider the application. Given the expansion of the First Action Interview Pilot Program to include all utility applications in all technology areas, applicants may want to consider reviewing their portfolio of pending U.S. applications awaiting a first Office Action on the merits to determine if a request for a first action interview should be filed before such an opportunity is lost by issuance of an Office Action.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
Competing patent reform bills were passed by the Senate and House of Representatives earlier this year. Yesterday, the Senate took the unusual step of bypassing reconciliation and instead adopted the House bill without changes, paving the way for President Obama’s anticipated signature on the “Leahy-Smith America Invents Act” (“AIA”). The Act provides the most comprehensive set of patent reforms since 1952. A number of the major provisions are summarized below:
Post Grant Review
Among the biggest changes is the new provision for an administrative process to challenge newly issued patents without having to resort to litigation in a federal district court. Moreover, unlike federal district court litigation (where the patent is “presumed” valid) and invalidity must be established by “clear and convincing” evidence, a challenger need only prove invalidity before the new Patent Trial and Appeal Board by a preponderance of the evidence.
Post grant review must be sought within nine months after the grant or re-issue of a patent. This provision of the act will take effect one year after enactment and apply to all patents issued before, on or after that date. Thus patents that issue before the one year anniversary may still be subject to post grant review provided that they have not been issued for more than nine months as of the effective date.
Unlike the current re-examination process, some discovery may also be permitted. Additionally, an oral hearing can be requested. The scope of discovery will be defined by rules yet to be promulgated by the USPTO. Nonetheless, the ability to conduct discovery and present oral arguments should go a long way towards leveling the playing field between the challenger and the patentee.
In addition to the new Post Grant Review, the traditional routes for reexamining patents will remain available to challengers. However, inter-partes re-examination will be renamed inter-partes review. The AIA also tweaks the standard for initiating review. The new threshold question will be: does the request show that there is a "reasonable likelihood that the requester would prevail" with respect to at least one claim. Inter-partes review will only be available after the nine month period for instituting post grant review proceedings expires.
Forgiveness by Supplemental Examination
Patent owners will be able to request supplemental examination “to consider, reconsider, or correct information believed to be relevant to the patent.” One purpose of this provision appears to cleanse patents that might otherwise be unenforceable due to alleged “inequitable conduct” during prosecution. The bills provide that, subject to certain exceptions, “a patent shall not be held unenforceable under section 282 on the basis of conduct relating to information that had not been considered, was inadequately considered or was incorrect in a prior examination of the patent if the information was considered, reconsidered or corrected during a supplemental examination of the patent.”
First to File
In a roundabout way, the patent reform act provides that a patent will be issued to the first inventor to file a patent application. Both the House and Senate bills redefine prior art to include any earlier filed patent application by another, thereby ensuring that the second to file will be unable to get a patent. But both bills also provide for “derivation proceedings” before a Patent Trial and Appeal Board (which will replace current Interference proceedings) to determine whether a prior applicant had derived the subject matter in question from a later patent applicant. The effective date for the “first to file” provisions will be 18 months after enactment.
The act also provides greater rights to prior users of an invention, who chose not to seek patent protection. Currently, US patent laws provide a “first inventor” defense to an action for infringement – but only for business method patents. The AIA appears to create a more general prior user right for those who used the “subject matter” on which they are being sued for infringement commercially more than one year prior to the effective filing date of the application giving rise to the patent.
Fee Setting Authority
Currently, the USPTO submits a budget each year to Congress and proposes fees that will cover the cost of running the patent and trademark operations. Congress routinely approves the fees but only gives the USPTO part of the revenue. The rest of the money gets spirited away and spent by Congress for sundry projects. The Senate bill would have allowed the USPTO to set fees and retain all of its fee revenue. However, the final resolution (based on the House bill approach) will allow fees to be set aside in a special fund that can be accessed by the USPTO based on congressional approval.
Prior Art Citation
The AIA expands the rights of third parties to submit prior art. Such submissions have to be considered by the examiner so long as they are submitted before allowance and no more than six months after publication.
After issuance, the Act also permits submissions of written statements made by the patent owner in federal court or USPTO proceedings as to the position taken by the patent owner as to the meaning of one or more claims. Such statements can be used for claim interpretation in re-examination, inter-partes review or post grant review proceedings.
Best Mode Requirement
In a nod towards international harmonization, the AIA disables the unique requirement of the US patent laws that applicants must disclose the “best mode” of practicing their inventions. The Act removes failure to disclose the best mode from the list of invalidity defenses to an infringement action by providing that this is “not a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable.”
Direct Filing by an Assignee Rather Than the Inventor
The AIA provides for filing in the name of an assignee or one to whom the inventor is under an obligation to assign the invention. A person who otherwise shows “sufficient proprietary interest in the matter” may make an application “on behalf of and as agent for the inventor,” and the patent will issue to the real party in interest. The AIA thus paves the way for corporations to file directly and dispenses with the notion that patent applications must be filed by individuals – and only after filing can they be assigned to a corporate employer.
Virtual Marking and an End to Marking Trolls
The AIA permits “constructive notice” (for seeking damages) to be met by notifying consumers that the product is patented and directing the public to an internet site that provides a current list of patents covering the product. The Act also puts an end to so-called “false marking” actions by enterprising plaintiffs (“marking trolls”) who have sought damages (as private attorneys general) for incorrect identification of patents covering products. Henceforth, only the US Government will be able to sue for false marking and collect statutory penalties. Entities that have suffered “competitive injury” will also be able to sue for actual economic damages but marking trolls will be out of luck.
Satellite Offices
“Subject to available resources” the USPTO is directed to open two more satellite offices (in addition to one in Detroit currently being planned) within three years of enactment. Several criteria for selecting the locations of these satellite offices are set out, including geographic diversity, origin of patent filers and the availability of technically trained personnel for hiring as examiners.
The Cutting Room Floor
A number of patent reforms that had been proposed in the prior unsuccessful House and/or Senate bills were scraped to make the package of patent reforms less controversial. These include prior attempts to legislate changes in the way damages are awarded in infringement action, e.g., calculation of compensatory damages, new definitions for willful infringement and calculation of enhanced damages upon a finding of willful infringement. Changes in the law on inequitable conduct were also abandoned (apart from new supplemental examination process discussed above). A requirement for 18 month publication of all applications was also nixed as were rules relating to venue and provisions for interlocutory appeals after a district court had completed claim construction but prior to final disposition of a case.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.
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