IP Law Bulletin

Important changes to Patent Prosecution Highway (PPH) practice at the U.S. Patent and Trademark Office (USPTO) and other intellectual property offices around the world took effect on January 6, 2014. The world’s five largest IP offices – the USPTO, the European Patent Office (EPO), the Korean Intellectual Property Office, the Japan Patent Office, and the State Intellectual Property Office of the People’s Republic of China (collectively, the “IP5”) – launched a new PPH pilot program (referred to as the “IP5 PPH”). Simultaneously, and with the inclusion of three IP5 members, thirteen intellectual property offices launched a similar pilot program titled the “Global PPH” pilot program. The Global PPH pilot program includes the national offices of the United States, Japan, South Korea, Australia, Canada, Denmark, Finland, Norway, Portugal, Russia, Spain, United Kingdom, and the Nordic Patent Institute.

In our November issue, we highlighted some patent rule changes that have since taken effect as part of the Patent Law Treaties Implementation Act of 2012; the changes took effect on December 18, 2013. One effect of these rules not previously discussed in our earlier write-up is the additional amount of time now afforded to applicants to reply to: (1) Restriction Requirements; (2) Notices of Informal or Non-Responsive Amendments; (3) Notices of Informal or Non-Responsive RCE Amendment; (4) Notices of Required Fees Due; and (5) Letters Requiring Computer Readable Format because it was unreadable, non-compliant, or not submitted. Previously, applicants had one month to respond to the USPTO for these matters before extension fees began to accrue, but now applicants have two months to respond without paying a fee. This additional amount of allotted time harmonizes the United States laws with those set forth in the Patent Law Treaty adopted at Geneva, which require a time period for reply by applicants be at least two months. So, don’t be alarmed when your docketing department begins docketing restriction requirements for a response time of two months instead of one!

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 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.

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.

This week the Federal Circuit again raised the bar for succeeding on claims of active inducement of infringement, holding that an alleged infringer’s “good-faith belief of invalidity may negate the requisite intent for induced infringement.” In doing so, it created an additional reason for companies to obtain opinions from counsel on the validity of competitors’ patents.

In a highly anticipated decision issued today in Association for Molecular Pathology v. Myriad Genetics, the Supreme Court unanimously ruled that isolated DNA sequences are not eligible for patent protection. The Court simultaneously held that cDNA can be patent eligible subject matter – as long as it is distinguishable from natural DNA. Justice Thomas, writing for the Court, clarified that the mixed ruling did not implicate methods, applications of knowledge about genes or alteration of sequences.

On April 1, 2013, the U.S. Patent and Trademark Office (USPTO) published interim final rules that implemented changes to patent term adjustment (PTA) provisions mandated by the AIA Technical Corrections Act of January 14, 2013. In addition to streamlining USPTO administrative procedures and procedures by which patentees can challenge PTA calculations, the rules also level the PTA "playing field" for filers of U.S. national stage applications. The new rules apply retroactively to any patent granted on or after January 14, 2013. While the rules became effective as of their publication, the USPTO will accept public comments until May 31, 2013, after which a final rule will be published.