Posts Tagged: "reexamination"

The absolute truth known to everyone in the innovation community is that pioneering innovations become commonplace. What was revolutionary at the time the invention was made becomes taken from granted. In hindsight pioneering innovations look insignificant because they have become ubiquitous. The public, judges and critics find it difficult (assuming they try) to determine whether that which is commonplace today was really, truly obvious decades earlier as of the critical date. Even when an honest and fair obviousness inquiry is undertake it can be exceptionally difficult to put yourself back to before the invention was made in order to determine what was known and what was obvious at the time. But let’s dispense with the ridiculousness, shall we? The overwhelming majority of the world was not at all knowledgeable about or clued into the World Wide Web at the time this innovation was first made. So let’s dispense with the histrionics.

Our inter partes challenge data from pre- and post-passage of the AIA clearly show that of the relatively few initial denials made by the USPTO of an inter partes challenge request, most fell on entities that typically file as small entities. We found 88% of denied petitions for inter partes review were filed by small entities, while only 12% of those denials related to petitions filed by large entities (Fig. 6). That is, small entities are 7 times more likely to have their petitions for inter partes review denied than large entities.

Myth 4: Patents of NPEs fare much more poorly in reexamination proceedings brought during litigation than those of Producers. Truth: When one includes independent inventors and independent inventors in the mix of NPEs, the patents being asserted by NPEs may be said to fare slightly more poorly in reexamination proceedings than those patents asserted by Producers. However, if one removes these independent inventor entities from the mix of NPEs, the patents held by non-independent inventor based NPEs were seen to do at least as well, if not better, than the average asserted patent of the Producers which was likewise thrown into reexamination during litigation.

Kappos explained that the PTAB has started and will continue, in at least some cases, to issue shorter per curiam decisions, which will allow them to decide more cases and move through the backlog. Co-Chair of the program, Rob Sterne, asked Kappos whether this would present problems for those who might want to appeal to the Federal Circuit. Given the standards applied by the Federal Circuit will it be possible for an applicant ever be able to satisfy the standards? Kappos acknowledged that is a concern and why we will see hundreds of shorter per curiam decisions rather than thousands. Kappos explained that the USPTO wants these types of decisions issued only when the record is extremely clear, making a detailed decision of the Board less necessary.

A new addition to the program just announced today is David Kappos, who is the immediate former Director of the United States Patent and Trademark Office. Kappos, a life-long employee of IBM prior to taking charge of the USPTO, is now with Cravath, Swaine & Moore LLP in New York City. Kappos will discuss the Patent Trial and Appeal Board, specifically discussing ex parte reexamination, the remaining legacy inter partes reexamination cases, inter partes review and the transitional program relating to covered business method patents. His segment will run from 9:15 am to 10:15 am. In addition to being presented live in New York City the program will also be webcast.

It’s no secret patent litigation costs are immense. According to the American Intellectual Property Law Association, the cost of an average patent lawsuit, where $1 million to $25 million is at risk, is $1.6 million through the end of discovery and $2.8 million through final disposition. Adding insult to injury, more than 60% of all patent suits are filed by non-practicing entities (NPEs) that manufacture no products and rely on litigation as a key part of their business model. Patent litigation will always be costly, but by planning, preparing, assessing, narrowing and focusing – the attentive client or counsel may succeed in achieving some predictability and keeping costs to a minimum.

The substantial new question of patentability standard is lower than the prima facie case of unpatentability standard needed for a patent examiner to make a valid rejection. In other words, just because a prior art patent or printed publication raises a substantial new question of patentability does not necessarily mean that the prior art patent or printed publication can be used either alone or in combination with the other art of record to reject the claims. Nevertheless, it is most common that a reexamination when ordered will result in the claims all being rejected. Thus, in the clear majority of cases a reexamination request is granted if the request will support a prima facie case of unpatentability.

Right now the best business to be in at the moment is the patent enforcement business, at least if you are concerning yourself with low-risk monetization with high reward. Between the legacy issue of bad patents, patent auctions and the many who purchase patents, what has started to happen is that the patent system rewards those who have the finances and ability to game the system. But the problem is extraordinarily complex.

At the conclusion of the supplemental examination if the certificate issued indicates that a substantial new question of patentability is raised an ex parte reexamination will be ordered by the USPTO. The resulting ex parte reexamination, which will address each and every substantial new question identified, will substantially be conducted according to the rules and procedures associated with ex parte reexamination. Notwithstanding, there is one very notable exception — the ex parte reexamination is not limited to patents and printed publications. Additionally, a less consequential procedural distinction is that the patent owner will not have the right to file a statement pursuant to 35 U.S.C. 304.

The recurring theme will be decreased fees for those who qualify for micro-entity status, but increased fees for everyone else. That is great, but micro-entity status will not even apply to all independent inventors, but only a subset of independent inventors who are at the lowest end of the income scale and who have had very few patents or patent applications. Thus, even the professional garage inventor will be a small entity and will pay more — in some cases substantially more — than they pay now. Not to mention the small businesses that are the engine of the U.S. economy. These fees will be a real and substantial impediment to the patent process for those individuals and businesses that we need to be encouraging and incentivizing the most.

This case intrigued me from the start because it seemed rather odd that there should be a nonprecedential opinion in an appeal to the Federal Circuit necessitated by a completely adjudicated inter partes reexamination at the United States Patent and Trademark Office. Moreover, the original panel concluded that the combination of known elements resulted in a predictable result. The problem with that reasoning, however, is that not all of the elements were found within the prior art. In fact, the Board found that there are no fewer than three (3) meaningful structural differences between the invention as claimed and the prior art.

Where the en banc decision gets particularly interesting (and adversarial) is with respect to the second question, namely when does “intervening rights” apply to reexamined claims? By a 6 to 4 vote, (and a reversal of the panel decision), a majority of the en banc Federal Circuit also concluded “as an alternative ground for affirmance” of the district court’s judgment that “intervening rights do not apply to claims that have not been amended and are not new.” The majority opinion by Judge Lourie (the dissenter in the panel decision) was joined by Chief Judge Rader, and Judges Newman, Bryson, Prost, and Linn (who was one of the 5 “nay” votes on the meaning “biocompatible). The dissenting opinion on the “intervening rights” question by Judge Dyk (who wrote the majority opinion in the panel decision) was joined by Senior Judge Gajarsa (who also joined the majority opinion in the panel decision), Judge Reyna, and Judge Wallach.

Let’s first consider one of the “bread and butter” components of patent prosecution, the utility application filing fee. Actually, this basic fee comprises three components: the filing fee, the search fee, and the examination fee. In the proposed fee changes, this utility application filing fee will increase from $1250.00 to $1840.00 (or from $625.00 to $920.00 for those qualifying as “small entities,” which get a 50% reduction in this fee). The biggest portion of this increase is reflected in the examination component, which has increased from $250.00 to $780.00 (or from $125.00 to $390.00 for those qualifying as “small entities”). Excess claim fees (total claims in excess of 20 and independent claims in excess of 3) have also gone up significantly, from $60.00 to $100.00, and from $250.00 to $460.00, respectively. (I’ll let you do the math for those qualifying as “small entities.”)

On September 26, 2011, the a three-judge-panel of the United States Court of Appeals for the Federal Circuit issued a ruling in Marine Polymer Technologies, Inc. v. HemCon, Inc., which found intervening rights due to certain patent claims due to the fact that Marine Polymer made arguments about claim language during reexamination, but without actually amending the claims. See Marine Polymer vacated opinion. On January 20, 2012, the full Federal Circuit decided to hear this case en banc and ordered that the original panel decision be vacated and the appeal reinstated. No additional briefing by the parties was requested, but on January 26, 2012, the Federal Circuit issued an Order allowing amicus briefs to be filed on or before February 10, 2012. On February 10, 2012 the Biotechnology Industry Organization and Pharmaceutical Research and Manufacturers of America filed a joint Amici Curiae Brief supporting the appellee and seeking affirmance of the district court decision.

I had the honor of being invited to the White House today for the Innovation for Global Development Event, which was held in support of the President’s commitment to using harness the power of innovation to solve long-standing global development challenges. As a part of this event, David Kappos, Under Secretary of Commerce for Intellectual Property and the Director of the United States Patent and Trademark Office, launched a pilot program dubbed Patents for Humanity, which is a voluntary prize competition for patent owners and licensees. The pilot program seeks to encourage businesses of all kinds to apply their patented technology to addressing the world’s humanitarian challenges.