IP Law Bulletin

Our January 2010 issue included a report about the initiative implemented by the USPTO to reduce the backlog of patent applications by permitting small entity applicants to expressly abandon one application and file a petition seeking special status for a second application. This initiative is sometimes referred to as the “Bump and Dump” program. To be eligible for this program both applications must be unexamined, must have been filed earlier than October 1, 2009, and must either be owned by the same party or have at least one common inventor. Further, the abandoned application cannot be revived and fees associated with the abandoned application cannot be recovered. The USPTO recently announced that this program has been extended through June 30, 2010. Small entity applicants that have unexamined applications that they are no longer interested in pursuing should consider taking advantage of this rule to expedite examination of another application.

Additional details and requirements are available from the USPTO website via the following link.

China’s patent system provides three types of patent rights: invention, utility model and design. Utility models are used extensively by Chinese applicants but foreign applicants have filed only a small number of utility model applications. Among other changes, a recent amendment to Chinese patent law, which became effective as of October 1, 2009, clarifies that an applicant can apply for both invention and utility model patents on the same invention but requires that the applicant abandon the utility model patent in favor of the invention patent when the invention patent grants. This clarification brings to light a filing strategy not often pursued in China by foreign applicants.  

As mentioned, China has three types of patents: invention patents, utility model patents and design patents. A Chinese invention patent is similar to a U.S. utility patent and protects a new technical solution relating to a product, a process or an improvement thereof. A Chinese utility model patent, on the other hand, covers a new technical solution relating to a product's shape, structure or a combination thereof.  

Utility model patents, which have a 10-year term, are not substantively examined and are granted after a formal examination, which generally takes about one year to 1.5 years or less. In contrast, invention patents, which have a 20-year term, are substantively examined and can take three years to five years to grant.

It can therefore be advantageous for applicants to file applications for both a utility model application and an invention patent application so as to gain the advantage of early issuance of a utility model patent. However, many foreign applicants do not follow this strategy. According to statistics from State Intellectual Property Office (SIPO), in 2008, 99.3% (223,945) of utility model applications were filed by Chinese applicants. Foreign applicants filed only 1,641 utility model applications (0.7%). These statistics are nothing new. Since 1985, approximately 99.7% of utility model applications have been filed by Chinese applicants with foreign applicants accounting for only 0.3% of utility model applications. A possible explanation is that foreign applicants, particularly those from countries where no similar system exists, are simply unfamiliar with Chinese utility models.  

Strategic Considerations
A basic strategy for filing in China could include filing both invention applications and utility model applications. Such a strategy can be advantageous because the relatively short period of time from filing to grant of a utility model application can be combined with the longer term of an invention patent to yield an extended period of time during which an enforceable right is available. Furthermore, the scope of protection provided by the claims of the initial utility model is likely to be broader than the scope of the claims in the eventual invention patent.  

Moreover, objections on inventiveness grounds during prosecution of the invention application may not necessarily affect the enforceability of the utility model because the standard for evaluating inventiveness in utility model invalidation proceedings is different from the standard for invention patents. Also, if the utility model patent and the invention patent have different scopes of protection, then there will likely be no double patenting issues. Applicants can therefore take the strategy even further by initially filing broader claims in the utility model applications while pursuing narrower claims in an invention application.

Utility models can also be a quick and cost-efficient way to protect products with a short life cycle. Invention patents may not be desirable for products with short life cycles because prosecution can take several years and can be costly to maintain. In contrast, utility models can provide protection for these products at much earlier stage and are cheaper to obtain and maintain.

Sophisticated applicants may also want to consider filing utility model applications for patentability reasons. Chinese patent applications filed by foreign applicants usually claim priority from a foreign application, either through the Paris Convention or as national stage of a Patent Cooperation Treaty application. Upon entry into national stage in China, foreign applicants must choose to enter either as an invention application or a utility model application, but not both. However, by national stage entry, applicants might have an idea of the patentability of their inventions based on previous prosecution. As discussed above, utility model applications are not substantively examined and later invalidation based on lack of inventiveness is difficult.Thus, for those applications that may have difficulty in terms of inventiveness, applicants can strategically choose to enter China as a utility model application. This strategy can quickly yield an enforceable utility model patent.  

Lastly, the utility model can also be used in cases where urgent protection is needed. For example, if a product launch in China is rapidly approaching, a utility model application can be filed quickly without the time required for sophisticated drafting. In extreme cases, the utility model application can be filed with narrow claims that may only cover the actual product.  

Conclusion
The default practice for foreign applicants in China has traditionally been to file invention applications while overlooking utility models. However, the Chinese utility model system can be used to strategically to enhance the scope of patent protection in China. An applicant wishing to learn how they can benefit from the Chinese utility model system should contact qualified patent counsel who can review their filing goals and provide advice on an appropriate Chinese filing strategy.

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

The Federal Circuit recently decided Wyeth and Elan Pharma Int’l Ltd. v. Kappos (Appeal No. 2009-1120, January 7, 2010) affirming that the United States Patent and Trademark Office (USPTO) has been miscalculating, and typically under-calculating, patent term adjustment. Patent term adjustment extends the effective term of a patent due to delays in its issuance. Under 35 U.S.C. § 154(b), a patent can receive a term adjustment for, among other things, (A) delays caused by the USPTO in meeting certain examination deadlines and (B) each day that issuance of the patent is delayed longer than 3 years due to delays by the USPTO. These delays are subject to an “overlap limitation,” which says the “the period of any adjustment granted…shall not exceed the actual number of the days the issuance of the patent was delayed.” The dispute in this case centered on the interpretation of how to calculate the actual number of days the issuance of the patent was delayed in an overlap situation.

Previous to this case, if there were any overlaps in delays, the USPTO would simply adjust the patent term by the greater of the A and B delays. For example, if the A delay was 610 days, the B delay was 345 days, and there were 51 days of overlap, the USPTO would grant a patent term adjustment of 610 days. However, the Federal Circuit determined that the patent term adjustment should instead be calculated by adding the A and B delays and subtracting the actual number of days overlapping. For example, if the A delay was 610 days, the B delay was 345 days, and there were 51 days of overlap, the patent term adjustment should be 904 days (610 + 345 – 51). As a result, the decision may give many patent holders an increase in patent term.

In response to the Wyeth decision, the USPTO issued a notice indicating that the Solicitor General will not seek further review of the decision, and that the USPTO is in the process of changing the manner it will calculate patent term adjustments under Section 154(b) to conform with the Federal Circuit’s decision.

Applicants dissatisfied with a patent term adjustment determination by the USPTO can seek review of that determination either by: (1) in response to a notice of allowance and before payment of the issue fee, filing a request for reconsideration of the patent term adjustment under 37 CFR 1.705 or (2) within 180 days of patent issuance, suing the USPTO in the United States District Court for the District of Columbia pursuant to 35 USC § 154(b)(4). Under some circumstances, it is also possible to request reconsideration of the PTA within 2 months of the issue date of a patent pursuant to 37 CFR 1.705(d).

A copy of the Wyeth opinion can be found on the Federal Circuit’s website at the following link.

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 an effort to reduce the backlog of patent applications, the USPTO has created a temporary additional basis under which a small entity applicant may have an application accorded special status for examination. Applications accorded special status will be placed in front of the Examiner for initial examination more quickly than other applications, but the examination process itself will not include expedited response periods. To take advantage of this program, an applicant who qualifies as a small entity can expressly abandon one application and file a petition seeking special status for a second application. Both applications must be unexamined, must have been filed earlier than October 1, 2009, and must either be owned by the same party or have at least one common inventor. Further, the abandoned application cannot be revived and fees associated with the abandoned application cannot be recovered. The program is now in effect and is being adopted on a temporary basis until February 28, 2010, although the USPTO may choose to extend it.

Additional details and requirements are available from the USPTO website via the following link.

The USPTO has announced a “Green Technology Pilot Program” in which an applicant may have an application accorded special status and thereby be examined more quickly. The pilot program was implemented on December 8, 2009 and is made available to applications pertaining to environmental quality, energy conservation, development of renewable energy resources, and greenhouse gas emission reduction. To participate in the program, an application must have a filing date earlier than December 8, 2009, and the applicant must file a petition to make special with the USPTO before December 8, 2010 and before a first Office Action is issued. There is no fee required for participating in the program, but the USPTO will accept only the first 3000 petitions to make special.

Additional details and requirements are available from the USPTO website via the following link.

Imagine a patent office reform that improves the quality of the examination process and shortens an application’s pendency period. The current reform efforts in the United States Patent and Trademark Office (USPTO) promises just that. On October 19, 2009, USPTO Director David Kappos announced an overhaul of the USPTO’s examiner performance metric system. The new count system gives examiners more time overall, including more time for initial examination and examiner-initiated interviews, while reducing the credits for requests for continued examinations (RCEs). In the long run, the new count system is intended to incentivize examiners to provide applicants with “compact prosecution" of their applications. For the near-term, however, applicants and their attorneys may need to be vigilant in monitoring the examination of their post-RCE applications.

Under the previous count system, examiners received one count for a first action (either initial or after RCE), and one count for a “disposal” either through allowance, abandonment, or appeal. An RCE also counted as a disposal and started a new round of examination. Each round of examination from first action to disposal received two counts total. Under time pressure to reach disposal, the system provided some incentive for the examiner to force a new round of examination after issuing a final Office action. This also led to aggressive restriction requirements that forced the applicant to divide a single application into multiple applications knowing that the resulting divisional applications would most likely be examined by the same examiner.

The new count system awards more counts for first round first office actions (1.25 count) than later round first office actions (1 count after first RCE and 0.75 thereafter). Along with more incentive to front-load examination, the examiners are granted more examination time for each round and additional “non-examining” time for examiner-initiated interviews. Previously, examiners only received additional time for applicant-initiated interviews.

The new system also treats RCEs as any other continuation or divisional application, by placing RCEs on the examiner’s Special New docket. Effectively, examiners are no longer required to take action on an RCE within 2 months. Examiners will now be required to work on the oldest new application every four weeks, or only one case each month from their Special New docket. For current applications in post-RCE examination, this could translate into significant delays. Over time, although additional time and incentives for “compact prosecution” should reduce the number of RCEs, it is apparent that the new system may require the applicant and their attorney to more aggressively pursue an earlier allowance.

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

The European Patent Convention (“EPC 2000”) came into effect on December 13, 2007 and represents the most significant change in European patent law since the European Patent Convention was first introduced in 1977. Recently, significant changes were made to the fee structure within EPC 2000. These changes apply to applications filed after April 1, 2009 and International Applications (PCT) which enter the European regional phase after that date.  Applicants and practitioners should be aware of some of the important changes when considering their European filing strategy. A brief review of the changes to the fee structure is outlined below.

Excess Pages Fees

The excess pages fee is now due upon filing or upon entry into the European regional phase, instead of being payable as part of the grant fee. The new excess pages fee is €12 for each page of the specification (description, claims, abstract, and drawings) over 35 pages. For international applications, page count takes into account any changes made before European regional entry, but not any made subsequently.  

Excess Claims Fees

A new higher excess claims fee of €500 for each claim over 50 is now due. The previous fee of €200 for the 16th through 50th claim is still applicable.  

Designation Fees

Designation fees are payable when examination is requested, 6 months after publication of the European search report, or upon entry into the European regional phase. Previously, applicants paid a designation fee for each contracting state up to a maximum of seven, after which all states could be designated at no additional cost. For applications filed on or after April 1, 2009, a single designation fee of €500 is payable regardless of the number of contracting states.  

Renewal Fees

Renewal fees are now only payable up to 3 months before the due date. This means that it is no longer possible to pay the first renewal fee for an International application on entry to the European regional phase along with the other fees due at that time.  

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

The United States Patent and Trademark Office recently announced that it is expanding the First Action Interview Pilot Program to additional art units. It will also be modifying the procedures under the program in an attempt to enhance efficiency and offer more options to participants. Under the program, participants receive a Pre-Interview Communication containing the results of a prior art search performed by the examiner. In response to this communication, applicants can conduct an interview with the examiner to discuss the results of the search and its impact on the claims. One important change in the so-called “enhanced” program will allow participants to waive the interview after receipt of the prior art search and receive a first Office action as under normal prosecution. In the original program, participants who failed to respond to the Pre-Interview Communication or failed to conduct the interview in a timely manner would risk abandonment of the application. Eligibility requirements for the enhanced and original programs are set forth below.

New utility nonprovisional applications that fall within one of the following groups may be eligible for the Enhanced First Action Interview Pilot Program:

1. Applications filed on or before November 1, 2006, and assigned to workgroup 1610 (art units 161X).
2. Applications filed on or before October 1, 2006, and assigned to art unit 1795.
3. Applications filed on or before February 1, 2008, and assigned to workgroups 2150 and 2160 (art units 215X and 216X).
4. Applications filed on or before July 1, 2008, and assigned to workgroups 2440 and 2450 (art units 244X and 245X).
5. Applications filed on or before June 1, 2007, and assigned to art unit 2617.
6. Applications filed on or before May 1, 2008, and assigned to art units 2811-2815, 2818, 2822-23, 2826, 2891-2895.
7. Applications filed on or before December 1, 2007, and assigned to art unit 3671.
8. Applications filed on or before January 1, 2008, and assigned to art unit 3672.
9. Applications filed on or before November 1, 2007, and assigned to art unit 3673.
10. Applications filed on or before February 1, 2008, and assigned to art unit 3676.
11. Applications filed on or before July 1, 2007, and assigned to art units 3677.
12. Applications filed on or before November 1, 2007, and assigned to art units 3679.
13. Applications filed on or before May 1, 2006, and assigned to art unit 3735.
14. Applications filed on or before April 1, 2007, and assigned to art unit 3736.
15. Applications filed on or before December 1, 2006, and assigned to art units 3737.
16. Applications filed on or before August 1, 2006, and assigned to art units 3768.
17. Applications filed on or before December 1, 2006, and assigned to art unit 3739.
18. Applications filed on or before September 1, 2007, and assigned to art units 3762 and 3766.
19. Applications filed on or before September 1, 2006, and assigned to art unit 3769.

Eligibility Requirements for Original First-Action Interview Pilot Program

Previously, new utility applications that fell within either Group I or Group II as outlined below were eligible for the original First Action Interview Pilot Program:

 Group I:

(1) Filed on or before September 1, 2005, and prior to a first action on the merits;
 
(2) Classified in Class 709 (Electrical Computers and Digital Processing Systems: Multi-Computer Data Transferring); and
(3) Assigned to an art unit in either working group 2140 (group art unit 214x) or 2150 (group art unit 215x).

 Group II:

(1) Filed on or before November 1, 2006, and prior to a first action on the merits;
 
(2) Classified in Class 707 (Data Processing:  Database and File Management or Data Structures); and
(3) Assigned to an art unit in working group 2160 (group art unit 216x).

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

In the recent case of Ropes & Gray v. Jalbert, No. SJC-10333 (July 28, 2009), the Supreme Judicial Court of Massachusetts held that attorneys’ liens for services rendered but not paid for in connection with the prosecution of patent applications can attach to the applications, letters patent issuing thereon, and their proceeds. This is not to say that patent applicants or patentees must pay their lawyers, but it is to point out that failure to do so can complicate their patent lives.

On August 24, 2009 the USPTO issued interim instructions to examiners for handling 35 U.S.C. §101 rejections. These instructions provide guidance to examiners while awaiting the U.S. Supreme Court’s 2009 / 2010 decision in In re Bilski, which, as patent practitioners are surely aware, concerns patentable subject matter under §101. In the meantime, these instructions can also provide practical guidance to applicants and patentees in claim drafting, amendments to and arguments regarding pending claims, and evaluation of issued patent claims. A copy of the interim guidelines can be found here at the USPTO’s website.