Litigation involving incorrect claims of small entity status is very rare. In the 1998 case of DH Technology, Inc. v. Synergystex International, Inc., the small entity issue fee was paid for the asserted patent, even though it was later discovered that the patentee had over 500 employees (i.e., was now a “large entity”) at the time this issue fee was paid. Even so, the Federal Circuit overturned a district court ruling that the asserted patent had lapsed and was therefore unenforceable because the patentee had “incorrectly paid the small entity issue fee and because the statutorily-permitted time for correcting the error had passed.” Instead, the Federal Circuit held that 37 CFR § 1.28(c) (allowing an erroneous claim of small entity status and the erroneous payment of the small entity issue fee to be excused by paying the deficiency owed) controlled so that the patentee could still rectify this error (and underpayment of the issue fee), even though well outside the 1 year and 3 month “after the date of the notice of allowance” period specified in 37 CFR § 1.317(c) for correcting a good-faith error in claiming small entity status, as well as making up the deficiency for incorrectly paying the small entity issue fee.
DH Technology is the “easy case” where small entity status is lost due to a change in size of the patentee. But small entity status under 37 CFR §§ 1.27(a)(1) (person) or 1.27(a)(2) (small business concern) may also be lost if the rights in the invention are assigned, granted, conveyed, or licensed (or are subject to an obligation under contract or law to assign, grant, convey, or license, any rights in the invention) to someone other than a small entity (e.g., an entity having more than 500 employees). That was the situation in the recent case of Outside The Box Innovations. L.L.C. v. Travel Caddy, Inc. where an agreement between the patentee (Travel Caddy) and its distributor/seller (The Rooster Group, a large entity of greater than 500 employees) of the patented tool cases was deemed by the district court to contain a patent license clause for the purposes of 37 CFR § 1.27(a)(2). Even worse, the district court held that Travel Caddy had “committed inequitable conduct by claiming small entity status and paying reduced PTO fees, and that this conduct rendered both the ‘992 and ‘104 patents permanently unenforceable.”
President Obama signs the AIA. September 16, 2011.
The America Invents Act (AIA) was signed into law by President Obama on September 16, 2011. The AIA ushered in numerous changes to patent law, but there will be even more changes to patent practice and procedure. The way many things are done at the USPTO on behalf of clients will change, with the next wave of changes becoming effective on September 16, 2012, on the one year anniversary. Over the next several weeks we will be taking some detailed looks at these changes, as well as flashing back to remember the passing of patent reform.
We begin our journey today with the Supplemental Examination Final Rules, which were published in the Federal Register on August 14, 2012. Section 12 of the AIA amended chapter 25 of title 35, United States Code, to add new 35 U.S.C. 257, which permits a patent owner to request supplemental examination of a patent by the United States Patent and Trademark Office. The purpose of supplemental examination is to provide an avenue for the patent owner to ask the USPTO to consider, reconsider, or correct information believed to be relevant to the patent. Although supplemental examination goes into effect on September 16, 2012, it can be used for any patent issued on, before or after September 16, 2012.
On July 19, 2012, I interviewed Bob Stoll at the Washington, D.C., offices of Drinker Biddle. In part 1 we discussed his adjusting to life in the private sector, the fact that he doesn’t enjoy the billable hour part of private practice (just like every other attorney I know) and we discussed politics a bit, as well as the U.S. economy and innovation policy. In part 2 we discussed Presidential politics, how innovation drives the U.S. economy, why a great new technology that has spawned an entirely new industry as we have coming out of so many recessions in the past, patent examination process and how to streamline the examination process.
In this final installment, Bob Stoll and I discuss the United States Supreme Court. We spend some time talking about the Supreme Court’s recent patent eligible subject matter decisions. We also discuss the problem of bad patent applications contributing to bad law and slower, more inefficient patent prosecution. We also discuss inequitable conduct after Therasense and who might make a good addition to the Federal Circuit. Stoll says the name he keeps hearing is Todd Dickinson.
Without further ado, here is part 3 of my interview with Bob Stoll.
In view of Therasense, the Patent Office is proposing to revise the materiality standard for the duty to disclose information to the Office in patent applications and reexamination proceedings. It is the belief of the Patent Office that the Therasense standard will reduce the frequency with which applicants and practitioners are being charged with inequitable conduct, thereby reducing the incentive for applicants to submit marginally relevant information to the Office. Thus, the Therasense standard should curtail the practice of filing Information Disclosure Statements that refer to boxes full of prior art that is of marginal significance, allowing patent examiners to focus on that prior art that is most relevant. The USPTO adopting the Therasense standard could, as a result, lead to improved patent quality and even a streamlining of prosecution in at least some cases.
Washington – Today the United States Patent and Trademark Office (USPTO) announced that it is carefully studying the important en banc decision by the U.S. Court of Appeals for the Federal Circuit in the case of Therasense v. Becton, Dickinson to assess how it may impact agency practices and procedures. The agency also announced that it expects to soon issue guidance to applicants related to the prior art and information they must disclose to the Office in view of Therasense.
The United States Court of Appeals for the Federal Circuit earlier today issued its much anticipated opinion in Therasense, Inc. v. Becton, Dickinson and Co. Upon first glance I had a strong suspicion I would agree with the decision of the Court when I noticed the opinion was authored by Chief Judge Rader, who was joined by Judges Newman, Lourie, Linn, Moore and Reyna, with Judge O’Malley joining in part. While Judges Reyna and O’Malley have been on the Court only a brief time, I almost always agree with Judge Rader, I seem to always agree with Judge Newman, and Judges Lourie, Linn and Moore typically seem spot on, at least in my opinion. I was not disappointed, and if you are engaged in representing clients before the USPTO neither will you be disappointed.
Judge Rader wrote: “Left unfettered, the inequitable conduct doctrine has plagued not only the courts but also the entire patent system.” Chief Judge Rader would go on to say that materiality is a “but-for” test, and actually breathed real life into the intent requirement, saying: “Proving that the applicant knew of a reference, should have known of its materiality, and decided not to submit it to the PTO does not prove specific intent to deceive.” The Federal Circuit did decline to adopt the USPTO version of the duty of candor outlined in Rule 56, which I have advocated for, instead opting for an even better, more patentee friendly standard than I have advocated for over the years. Today is a good day no doubt. Intent now actually requires intent, and a reference must actually be material in order to satisfy the materiality requirement. What a radical concept!
The 111th Congress once again left patent reform efforts on the table without any resolution or even a vote. That might be just as well given that in the minds of most the patent reform efforts were not truly “reform,” but rather were merely changes that would not have made for a stronger Patent Office or otherwise addressed some of the pressing issues that require Congressional attention.
At some point during 2011, however, I suspect that Congress will become engaged and interested as innovators find themselves on the short end of the Supreme Court sick in the Microsoft v. i4i case. We all know that the Supreme Court only takes patent cases to overrule or at least modify the law of the Federal Circuit. That only makes sense since there is but one Circuit responsible for patent law, thus no splits among the Circuits to resolve. So in taking the Microsoft-i4i case that asks whether there should be as broad a presumption of validity as required under the well-established law of the Federal Circuit, it doesn’t take a rocket scientist to figure out that the presumption of validity will be eroded by the Supreme Court, perhaps in this term. That being the case, it is at least plausible that Congress could be persuaded to become involved, perhaps even undertaking sensible reforms that protect innovators. Yes, I realize how naive that sounds, but please keep reading!
Over the summer I had the opportunity to interview Chief Judge Michel on the record, but our conversation took on a life of its own and many of the topics I had hoped to cover wound up having to be cut due to time considerations. Chief Judge Michel graciously agreed to a second interview, which took place on September 24, 2010. In part 1 of this interview sequel, we discussed fee diversion at the USPTO, he gave an insiders view of the Senate confirmation process, discussed the confirmation process of Robert Bork and a federal judiciary that seems almost ignored by Congress. In part 2, which appears below, Chief Judge Michel and I talk about the Federal Circuit, focusing on the good decisions during his tenure on the Court, as well as a few he thought the Court got wrong, including a nearly unanimous en banc decision. We discuss inequitable conduct, his thoughts regarding the Supreme Court should be meddling with patent law so much, and what he tried to do as Chief Judge to bring the Court together and build a collegial working environment.
Part 3 of this interview will appear on Wednesday, October 27, 2010. In that final installment Chief Judge Michel explains what Federal Circuit Judges are looking for in the briefs, in oral argument and the characteristics of an attorney who is likely to find success at the Federal Circuit. Stay tuned!
Occasionally I come across some news that I wish I had time to write about, and frequently any more I am asked to help spread the word on a variety of topics relating to the intellectual property industry. With that in mind, what appears below are some random things that many would likely we interested in knowing about.
In this edition of News, Notes & Announcements, patent attorneys asked to participate in an inequitable conduct study, BIO seeks session proposals for 2011 Convention, Huffington Post and other popular press starting to report that patent backlog is costing jobs, the Second Circuit refuses en banc rehearing in reverse patent payments case and PLI sponsoring yours truly on a speaking tour.
On Tuesday, June 29, 2010, I had the opportunity to sit down on the record with Nick Godici, the former Acting Director of the United States Patent and Trademark Office and Former Acting Undersecretary of Commerce for Intellectual Property. Godici is one of only a small handful of individuals to have seen the Patent Office on every level, from newest patent examiner to SPE to Group Director, Commissioner for Patents and ultimately to Director of the USPTO. I have wanted to sit down with him for some time now, and some mutual friends of ours, who are mentioned in the interview in passing, made introductions. I was put in touch with Godici and now the rest is history, as they say.
I thoroughly enjoyed my time with Godici, and we managed to get into a wide variety of issues that ranged from his early days as a patent examiner, his patent examination philosophy and approach, the role of the USPTO, the Patent Granting Authority versus the Patent Denial Authority, examiner training, building relationships between patent examiners and the patent bar, the PTO work from home initiative, inequitable conduct, the Bilski decision and what the USPTO is now likely doing to address that, the parallels between the Reagan Administration and the Obama Administration in terms of patent and innovation policy and exactly what it is like to be the Commissioner of Patents and the Director of the Patent Office, and much more. Oh yes, we also talked about his getting a call from Secretary of Commerce Gary Locke last summer and returning to the Patent Office for a few months as a special adviser at the request of the Obama Administration.
On Friday, May 28, 2010, USPTO Director David Kappos gave five suggestions for practitioners on the Director’s Forum (i.e., the Kappos blog). The first two suggestions caught my attention because they are things that I have been writing about for quite some time. First, set up an interview. Second, set for your arguments and be prepared to discuss what makes the invention new and distinguished over the prior art.
It would be wonderful if such things could occur in the prosecution of every case, but unfortunately the Federal Circuit has effectively prevented that from happening and forced upon the USPTO and the practicing patent bar a game of hide the ball, which benefits no one. With Congress not stepping up to the plate any time soon to do anything useful for the patent system there may be only one hope left; namely to get the CAFC judges to examine patent applications, sitting by designation, so they can better understand the mess they have created.
As I’ve said before, no one could rightly accuse me of being biased against patents. See Judge Rader Doth Protest Too Much in Media Technologies. But, as I also pointed out in this article on Judge Rader’s dissent in Media Technologies Licensing, LLC v. The Upper Deck Company, I don’t believe every patent is “bullet proof,” or to use Judge Plager’s phrase, that some patents aren’t built on “quicksand.” In fact, I agree with Judge Plager’s dissent in the denial of rehearing en banc in Enzo Biochem, Inc. v. Applera Corp., issued May 26, 2010, which argues that the “definiteness” requirement in the second paragraph of 35 U.S.C § 112 needs more “teeth” than Federal Circuit precedent appears to give it.
The three patents, U.S. Pat. No. 5,328,824 (the ‘824 patent), U.S. Pat. No. 5,449,767 (the ‘767 patent), and U.S. Pat. No. 5,082,830 (the ‘830 patent), in Enzo Biochem involved compounds used in techniques for labeling and detecting nucleic acids. The district court granted summary judgment of invalidity of all of the asserted claims of each of these patents based on “indefiniteness” under 35 U.S.C § 112, second paragraph, or alternatively as anticipation under 35 U.S.C § 102. The “indefiniteness” ruling for each of the three patents related primarily to the phrase “not interfering substantially.” This phrase was used to define a linkage group present in the claimed compounds as “not substantially interfering” with the function of these compounds as detection probes with respect to both hybridization and detection (the ‘824 and ‘767 patents) or simply detection (the ‘830 patent).
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more. The treatise is continuously updated to address relevant Federal Circuit and Supreme Court decision impacting patent drafting.
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