Earlier this month, the United State Patent and Trademark Office released new guidance for its Examiners to help them better determine when an invention is too abstract to be patentable. This latest effort by the Patent Office brings more clarity and predictability to the examination process for inventors seeking patent protection for software and business methods.
To be patentable, an invention must be new, useful, and unobvious. The courts have also recognized that abstract ideas and laws of nature are also not eligible for patent protection. Predicting which inventions are too abstract for patent protection has been a challenge in the past, and has become more difficult since the Supreme Court’s ruling in Alice Corp. v. CLS Bank (March, 2014). The Court of Appeals for the Federal Circuit has so far attempted to follow the Supreme Court’s guidelines on a case by case basis giving us clues as to the kinds of inventions that are too abstract to be patented. This effort has created some clarity in specific cases, but it has also created additional confusion where the Federal Circuit has given differing opinions for similar inventions. This raises the possibility that different Examiners in the same technology area may pick and choose how to handle similar inventions thus arriving at different conclusions for similar subject matter.
The Patent Office has responded with this latest guidance for the Examiner corps that attempts to synthesize the case law into a more practical legal framework that may be applied in a more predictable manner. Although they do not have the force of law, the guidelines offer valuable insights into how Examiners will determine whether the subject matter in a given application is unpatentably abstract.
Looking briefly at the substance of the latest guidance, the USPTO is revising its examination procedure by: (1) Providing groupings of subject matter that it considers to be an abstract idea; and (2) clarifying that a claim is not ‘‘directed to’’ a judicial exception if the judicial exception is integrated into a practical application of that exception.
On the first point, the Patent Office sees three separate categories of material that are unpatentably abstract:
Mathematical Concepts: Mathematical relationships, mathematical formulas or equations, mathematical calculations
Methods of Organizing Human Activity: Fundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions)
Mental Processes: Mental processes—concepts performed in the human mind (including an observation, evaluation, judgment, opinion).
According to the guidelines, concepts that do not fit one of these categories are probably not abstract ideas. The Patent Office does leave open the possibility that exceptional cases could arise where the concept is too abstract to be patented, but also does not fit into one of these categories.
On the second point, the Patent Office explains that even if the claims do fall within one of the three groupings above, they may still be eligible for patent protection if the abstract concept is integrated into a practical application of that concept. A “practical application” is one that applies, relies on, or uses the concept “in a manner that imposes a meaningful limit on the abstract concept.”
The new guidance represents a noteworthy change in the way applications will be handled by Examiners, and it marks the latest attempt by the Patent Office to bring clarity and predictability to the process. It is also important to note that this is not a change in the statute approved by Congress, nor is it a change to the legal framework that has been endorsed by the Federal Circuit or the Supreme Court. It remains to be seen then, what the long-term effect of this change will be on applications currently under examination, and what affect, if any, it will have on patent litigation going forward.
Provisions of the America Invents Act Effective as of September 16, 2012
The America Invents Act (IAI) is now one year old and several important provisions are now in effect. Some of these provisions are important to both patent holders and anyone who wants to challenge the validity of a patent. The newly in-force provisions include:
Prior art submissions by third parties;
Post-grant review of newly issued patents;
Post-grant review of covered business method patents;
Inter partes review of issued patents; and
Supplemental examination
Prior Art Submissions by Third Parties
Third parties may now submit any printed publication of potential relevance to the examination of a patent application. This allows a third party to let the patent examiner know of relevant prior art that may have a bearing on patentability. Third party submissions must be filed before a notice of allowance and before the later of 6 months after publication or the date of the first office action (not a restriction requirement). Submissions must include a brief explanation of why the submitted documents are relevant.
This can be advantageously used as a persuasive brief arguing against patentability. Third-party submissions of prior art may provide a relatively inexpensive way to invalidate a competitor’s patent before it ever issues. Businesses should consider a patent monitoring service to monitor published patent applications for business damaging patents.
Inter partes Review of Issued Patents
This new review procedure replaces the old inter-partes reexamination. Anyone (except for the patentee) can petition for inter partes review of the patent, seeking cancellation of one or more claims based on the claim(s) being anticipated and/or obvious in view of one or more prior art documents (limited to patents and printed publications). This review allows the third party to participate throughout the process, including comments on any arguments or amendments made by the patentee. Unfortunately, the Patent Office has set the base government fee for inter partes review at $27,200, making this approximately three times as expensive as the previously available inter-partes reexamination.
Post-Grant Review of Newly Issued Patents
This new review procedure allows anyone (except for the patentee) to petition for post-grant review of the patent, requesting cancellation of one or more claims. Unlike inter-partes review, the petition for post-grant review is not limited to anticipation or obviousness arguments based on prior art documents. Post-grant review may also argue the claims are directed toward ineligible subject matter, the claims are invalid because the written-description in the patent is insufficient to support the claims and the claims are invalid as anticipated and/or obvious in view of prior public use or disclosure (as well as any prior art documents).
This provides options for arguing invalidity that were not previously available from the Patent Office (and which otherwise require Federal Court litigation to resolve). Unfortunately, the Patent Office has set the base government fee for post-grant review at $35,800. Also, the petition must be filed no later than nine-months after the date the patent was granted. Due to this short timeframe, businesses should consider a patent monitoring service to monitor for business damaging patents.
Post-Grant Review of Covered Business Method Patents
This new review procedure is a broadening of the post-grant review, as applied to “covered business method patents.” Post-grant review of covered business method patents is allowed anytime between September 16, 2012 and September 16, 2020 and is not limited by the grant date of the patent. Only a person who has been charged with infringement of a patent that claims a covered method of corresponding apparatus can file a petition under this procedure. The petition may be brought under the same grounds as the post-grant review, but with limits on the prior art that may be asserted.
Supplemental Examination
This new review procedure is now available to patent owners to correct mistakes made during the prosecution of the patent. The patent owner may present any information believed to be relevant to the patent including any ground of patentability, i.e., patent eligibility of the subject matter of the claims, anticipation or obviousness in view of prior art, lack of written description, enablement, best mode and indefiniteness of the claims. Supplemental examination can be used to cure what otherwise might be considered inequitable conduct during the prosecution of an application, although it is expensive. A request for supplemental examination requires a total government fee of $21,260, although $16,120 is potentially refundable.
Please contact us here at Woodard, Emhardt, Moriarty, McNett & Henry LLP if you need any assistance with these or any other IP matter.
The United States Patent and Trademark Office (USPTO) opened the first ever satellite patent office in Detroit, Michigan amid fanfare on July 13, 2012. USPTO Director David Kappos swore-in the office’s first seven USPTO Board Judges who will preside over patent appeals cases and help speed up patent prosecution. In addition to the judges, approximately 25 patent examiners and other staff began work on Monday, July 16. The Detroit office is expected to create approximately 120 highly-skilled jobs in its first year of operations, which should help to reduce the backlog of patent applications and appeals. Three additional satellite offices are set to be opened in or around Dallas, Texas, Denver, Colorado, and Silicon Valley, California, as the USPTO announced July 2, 2012.
This is good news for inventors and entrepreneurs because it will help them to move their innovation to market more quickly, saving critical time and resources. In some cases the new office could allow for more economical prosecution by allowing Indianapolis attorneys to conduct Examiner interviews at the new office.
Go here to learn more about the opening of the new Patent Office. If you wish to learn more about how this can impact you as an inventor or entrepreneur, feel free to contact us here at Woodard, Emhardt, Moriarty, McNett & Henry LLP.
Topics discussed in this month’s prosecution group meeting include the recent U.S. Chamber of Commerce study finding that industries that depend on intellectual property rights account for more than $5 trillion of the country’s gross domestic product, the USPTO’s pilot “Deadwood” project, and the ICANN list of applied-for generic top level domains (gTLDs). To download a copy of this presentation click here.
In a 6–1–4 decision, an en banc Federal Circuit in Therasense, Inc. v. Becton, Dickinson and Company tries to cure the “plague” of inequitable conduct pleadings by raising the bar for proving that alleged bad acts were material to patentability and that the patentee undertook the alleged bad acts with intent to deceive the Patent and Trademark Office.
The court now rejects the previous “sliding scale” approach that allowed strong evidence of materiality to compensate for weak evidence of intent to deceive (and vice-versa), and requires the accused infringer to prove both elements — intent and materiality — by clear and convincing evidence.
For the element of intent to deceive, the Federal Circuit now demands evidence of a “deliberate decision” to deceive the Patent Office. Focusing on the failure to submit prior art material to patentability, the court held that “the accused infringer must prove by clear and convincing evidence that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it.”
For the element of materiality, the Federal Circuit now demands evidence of “but-for materiality.” Stated differently, the court must find that, but for the deception, the Patent Office would not have allowed the claim. “In making this patentability determination, the court should apply the preponderance of the evidence standard and give claims their broadest reasonable construction.” Yet, the court identified a major exception [to proving but-for materiality] in cases of “affirmative egregious misconduct”.
Please click here for a link to the opinion, and please contact our attorneys to further discuss the Therasense opinion.
On April 4, 2011, the United States Patent and Trademark Office (USPTO) issued a final rule regarding prioritized examination (Track I). The purpose of the rule is to provide a final disposition within twelve months of prioritized status being granted.
Track I of the prioritized examination will allow an applicant to request prioritized examination of an original utility or plant application under 37 CFR 1.102(e). To qualify for this status, the application: (1) must be a new original utility or plant nonprovisional application filed on or after May 4, 2011, (2) must be complete under 37 CFR 1.51(b) including an oath or declaration under 37 CFR 1.63 and all required fees (i.e., filing fee, search fee, examination fee, any excess claims fees, and any application size fee), and it must be filed via the USPTO’s electronic filing system (EFS-Web) if it is a utility application, (3) must contain no more than 4 independent claims, no more than 30 total claims, and cannot contain any multiple dependent claims, (4) and must be filed in conjunction with a request for prioritized examination in compliance with 37 CFR 1.102(e) along with the prioritized examination fee, the processing fee, and the publication fee. The prioritized examination fee is the same for large and small entities ($4000), although this fee may be increased to $4,800 for large entities and reduced to $2,400 for small entities if the patent reform legislation S. 23 (or similar legislation) is enacted into law.
Additional details from the Federal Register notice point out that continuing applications are acceptable; however, these applications will not automatically be given prioritized examination status based on a request filed in the parent case. As well, unlike the accelerated examination program under 37 CFR 1.102(d), the filing of an examination support document is not required for prioritized examination under 37 CFR 1.102(e).
The USPTO is limiting the number of qualifying applications to 10,000 during the remainder of 2011.
To read the final rule in the Federal Register, click here.
Topics covered in this month’s patent prosecution presentation include a discussion of the patent statistics dashboard now available on the United States Patent and Trademark Office (USPTO) website, the latest USPTO examination guidelines on obviousness, and a discussion of a recent Federal Circuit case about when a preamble limits a claim. Click here to download a copy of the presentation.
The United States Patent and Trademark Office (USPTO) recently published updated examination guidelines regarding obviousness rejections under 35 U.S.C. §103 in light of the United States Supreme Court’s 2007 decision in KSR Int’l Co. v. Teleflex Inc. The updated examination guidelines provide additional examples to assist in obviousness analyses stemming from post-KSR case law. The guidelines can be found clicking here. Comments can be emailed to KSR_Guidance@uspatent.gov.
For the latest in patent news, please view the PowerPoint below from our August 2010 Patent & Trademark Prosecution Group meeting. Topics covered in this month’s presentation include the Patent Office’s Interim Guidelines on patentable subject matter in light of the U.S. Supreme Court’s recent Bilski decision regarding business method patents, as well as a review of recent Federal Circuit decisions. Click here to download the PowerPoint presentation.
How often have you noticed that a product bears a label of “patent pending” or “U.S. Patent No.”? But, what if that patent does not cover the product? Or maybe there is no “patent pending”? Well, anyone could have a “false marking claim” against that manufacturer and could recover up to $500 per article manufactured with such label. As one could imagine, the recoverable amount or damages could be very large. Therefore, it is recommended that businesses implement procedures to avoid potentially false marking their products and minimize potential risk for liability.
Many products or packaging are marked with the label “patent” or a variant such as “pat.” and a full patent number or “patent pending”. This “marking” provides notice to the public that the product is patented or has a patent pending. Notice to the public is required to ensure a patentee’s right to damages for a time period prior to notice to the offending party if the patent is ever litigated. In other words, failure to properly mark a patented product limits the time period by which one can recover damages.
There are three types of “marking” prohibitions. The first type includes “counterfeit marking” which is the use of a patent mark without the owner’s permission. The second type includes “false marking” which is the use of a patent mark on an unpatented article. The third type includes “false patent pending marking” which is the use of “patent applied for” or “patent pending” when no patent application covering the product is pending with the United States Patent and Trademark Office.
If an unpatented product is marked with a patent number and it can be proven that the party marking the product had the intent to deceive the public, then a penalty of up to $500 per article can be recovered. Any person can sue for this penalty, in which event one-half of the recovery goes to the person suing and the other half to the U.S. government. By permitting members of the public to sue on behalf of the government, Congress has allowed individuals to help control false marking.
However, for patents directed to process or method claims the notice provision or “marking” does not apply. The reason that the marking statute does not apply to method claims is that, ordinarily, where the patent claims are directed to only a method or process there is nothing to mark. Where the patent contains both apparatus, i.e., product, and method claims, however, to the extent that there is a tangible item to mark by which notice of the asserted method claims can be given, a party is obliged to do so if it intends to recover damages under the method claims prior to notice to the offending party.
Some recommendations that businesses may implement to avoid potentially false marking their products and minimize potential risk or liability include the following. One recommendation is to review all current patent marking to verify that a product is marked with at least one claim in a patent that covers the product. Also it is important to check for any expired patents and if there are any expiration dates approaching. If any expired patents are found, then it is recommended to stop marking with that number upon expiration. Similarly, if the maintenance fees have not been paid for a patent and the patent is no longer enforceable, then stop marking with that number.
Additionally it is suggested to avoid conditional marking, i.e., “product may be covered by one or more of the following patents”, unless the product is covered by at least one claim of every listed patent. Also avoid marking “patent pending” unless there is a reasonable belief that such marked products are covered by one or more claims in a pending patent application. If a patent application is no longer pending, i.e., abandoned, then businesses should stop marking products with “patent pending”.
In addition to reviewing products, it is recommended to review product literature, brochures, presentations, advertising, and other materials that may be marked. Businesses may also want to review any licensing programs for third party marking activities.
The preceding discussion is intended for informational purposes only and should not be construed as legal advice. Please contact one of our attorneys to learn more about patent marking or any other aspect of intellectual property law.
