A Claim of priority Cannot Be Made With an Incorporation by Reference

A claim of priority is a statement in a patent application referencing back to an earlier filed patent application. When the claim of priority is made correctly, the subject matter in the later filed patent application that was also described in the earlier filed patent application then has a priority date as of the filing date of the earlier filed patent application.

Benefit of a claim of priority

The benefit of an earlier priority date is that intervening references dated between the filing dates of the earlier and later filed patent applications are not prior art to the later filed patent application.  For example, assume a nonprovisional patent application is filed on December 31, 2018, but a reference is cited against the patent application dated July 1, 2018.   If the nonprovisional patent application claims the benefits of a provisional patent application filed on February 1, 2017, then to overcome the rejection, the inventor must only point out that the claimed invention has a priority date as of the filing date of the provisional patent application.  That is very easy and inexpensive to do.  More importantly, no prosecution history estoppel that might limit the scope of the patent claims was created.

Fixing a defective claim of priority

For any patent family that has two or more patents applications, the claim of priority needs to be made correctly.  Otherwise, intervening references may become prior art when they could be avoided.

If the claim of priority is defective, it can be fixed if the defect was unintentional through a petition or reexamination.  If the USPTO made a mistake in the priority claim, then a request to fix the mistake through a certificate of correction can be made.

Droplets, Inc. v. ETrade Bank

In Droplets, Inc. v. ETrade Bank (Fed. Cir. 2018), ETrade filed a petition for inter partes review against U.S. Patent 8,402,115 (‘115 Patent) which was owned by Droplets, Inc. ETrade was attempting to invalidate the 115 patent because Droplets (patent owner) alleged that ETrade was liable for patent infringement.

The ‘115 Patent was the last patent in a family lineage of four patent applications. See diagram below.  The Franco PCT is based on the 917 provisional.

1. The 115 patent properly claimed priority back to the 838 patent by satisfying the requirement for a specific reference, the timing of submitting the specific reference and the copendency requirement.
2. The 838 patent properly claimed priority back to the 745 patent and the 917provisional.

The issue was whether 115 patent was entitled to the 917 provisional’s priority date.  The Franco PCT was made available to the public more than one year before the filing date of the 115 patent.  The Franco PCT was the international stage application based on the 917 provisional.  The Franco PCT also shared common subject matter with that of the 115 patent. As such, if the 115 Patent was entitled to the 917 provisional’s priority date, then the Franco PCT was not prior art to the 115 patent.  If not, then the Franco PCT was prior art to the 115 patent and could be used to invalidate the claims of the later 115 patent.  As such, it was important that the patent owner establish a claim of priority back to the 917 provisional to eliminate the Franco PCT as prior art.

In the patent application which matured into the 115 patent, the patent owner inserted the following specific reference for the claim of priority:

The present application is a continuation of allowed U.S. patent application Ser. No. 10/720,728, entitled “SYSTEM AND METHOD FOR DELIVERING REMOTELY STORED APPLICATIONS AND INFORMATION” filed on Nov. 24, 2003 ,now U.S. Pat. No. 7,502,838, the di[s]closure of which is hereby incorporated by reference in its entirety. (emphasis added).

The patent owner argued that the 115 patent is entitled to the priority date by virtue of the incorporation by reference of the entirety of the 838 patent.  In other words, the 838 patent contained a proper priority claim back to the 917 provisional and because of that proper priority claim, the 115 patent should be entitled to the priority date of the 917 provisional.

The Federal Circuit disagreed for several reasons.

PTO Rules

35 USC § 119(e) and 120 both require a “specific reference” to the earlier filed patent application.

37 CRF § 1.78 explains that a “specific reference” to the priority patent application must reference (1) its serial number and (2) the relationship between the earlier and later filed patent applications.

The priority claim listed above did not have the two components mentioned in 37 CRF § 1.78.

The patent owner characterized their failure to follow these rules as more attributable to a failure to follow hypertechnical rules.  The Federal Circuit did not take kindly to the patent owner’s characterization of these rules as hypertechnical and instead characterized these rules as satisfying an important notice function to anyone that might want to research the claim of priority in a patent family without much effort.

Incorporation by reference

Information can be incorporated into a patent application if the information is essential or nonessential information.

“Essential material” is defined as material “that is necessary to:” (1) provide a written description of the claimed invention as required by the first paragraph of 35 U.S.C. § 112; (2) describe the claimed invention as required by the second paragraph of § 112; or (3) describe the structure, material, or acts that correspond to a claimed means or step for performing a specified function as required by the sixth paragraph of § 112. Id. Accordingly, “essential material” is expressly defined as material necessary to meet the requirements of § 112.

The MPEP defines “nonessential material” as “subject matter referred to for purposes of indicating the background of the invention or illustrating the state of the art.” MPEP § 608.01(p) I.A. The MPEP also explains that claim amendments during prosecution can transform nonessential material into essential material, triggering a § 112 rejection if the DROPLETS, INC. v. E*TRADE BANK 17 incorporation fails to satisfy § 1.57(c).

Simply put, both categories of information can incorporate information for the purposes of satisfying Section 112 (e.g., written description requirement), not Section 120 (e.g., claim of priority).

Thus, the claim of priority found in the 838 patent could not be the type that can be incorporated in by reference into the 115 patent.

The Federal Circuit found that the 115 patent was not entitled to the priority date of the 917 provisional, and affirmed a finding that the claims were invalid based on the published Franco PCT application.

Ramifications

Upon filing a patent application, the USPTO mails a filing receipt.  The domestic and foreign claim of priority is stated and should be checked to make sure that it reflects the claim of priority that the inventor intends.  Otherwise, the patent owner may not be able to cure the defect when trying to sue an infringer after it issues as a patent.  If it can be fixed after it matures into a patent, the costs are much higher than the costs to fix while the patent application is still pending.

When reviewing a patent for a noninfringement opinion, do not assume that the prosecution was done properly.  As discussed in this case, even though the 115 did not claim priority back to the Franco PCT, the examiner did not use the Franco PCT which would be the best prior art reference against the 115 because presumably at least certain portions were identical to each other.