Author Archives: Nelson R. Capes

Federal Circuit Holds Medical Diagnostics Patent Invalid under 35 USC 101.

The Federal Circuit, in a three-judge panel, recently decided a medical diagnostics patent case that has an unusual concurrence written by one of the three judges, Judge Linn. In Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. June 12, 2015), (“Sequenom”) the Court affirmed a district court summary judgment holding that U.S. Patent No. 6,258,540 (“the ‘540 patent”) is invalid under 35 U.S.C. § 101 as not directed to patent eligible subject matter.

The Court based its holding on Mayo Collaborative Services v. Prometheous Laboratories, Inc., 566 U.S. __, 132 S. Ct. 1289 (2012) (“Mayo”).

The ‘540 patent claims a method for detecting cell-free fetal DNA (“cffDNA”) in maternal blood samples. A sample claim of the ‘540 patent is:

  1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises: amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

The Court followed the two step Mayo method of determining subject matter eligibility for processes claiming the use of laws of nature, natural phenomena, and abstract ideas.

In the first step, the Court determines whether the claims at issue are “directed to” a patent-ineligible concept. Here, the Court held that the claims are directed to a natural phenomenon because the method “begins and ends with a natural phenomenon.”

In the second step, the Court determines whether “additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Here, the Court held that the claims do not pass the second step because “the method steps were well-understood, conventional and routine.”

In its analysis, the Court, citing Alice Corp. v. CLS Bank Int’l, __ U.S. __, 134 S. Ct. 2347, 2354 (2014), (“Alice”) “made clear that the principle of preemption is the basis of the judicial exceptions to patentability.” However, the Court also stated that “[W]here a patent’s claims are deemed only to disclose patent ineligible subject matter under the Mayo framework, as they are in this case, preemption concerns are fully addressed and made moot.” The Court declined to adopt the appellee’s “distinction among natural phenomena based on whether or not they will interfere signifcantly with innovation in other fields now or in the future.” The Court also stated that the Supreme Court has instructed that a “[g]roundbreaking, innovative or even brilliant discovery does not by itself satisfy the § 101 inquiry.” Assn for Molecular Biology v. Myriad Genetics, Inc., 569 U.S. __, 133 S. Ct. 2107, 2117 (2013) (“Myriad”).

Judge Linn wrote a concurring opinion but stated he was doing so “only because I am bound by the sweeping language of the test set out in [Mayo].” He further explained:

“The Supreme Court’s blanket dismissal of conventional post-solution steps leaves no room to distinguish Mayo from this case, even though here no one was amplifying and detecting paternally-inherited cffDNA using the plasma or serum of pregnant mothers.”

Sequenom is notable for the stringent application of the Mayo analysis even in the case of (admittedly) an absence of prior art and the presence of a “new way that revolutionized prenatal care.” This is an indication of the Federal Circuit’s new obeisance to its chastising by the Supreme Court in Alice, Mayo, and Myriad. However, Judge Linn’s concurrence suggests that not all of the members of the Court fully subscribe.

Covered Business Method Patent Held Invalid under 35 USC 101 and Alice.

The Patent Trial and Appeal Board (PTAB) has issued a Final Written Decision of the invalidity of an Internet-related patent under the subject matter restrictions of 35 U.S.C. 101.

In Bank of America, N.A., PNC Financial Services Group, Inc. and PNC Bank, N.A, vs. Intellectual Ventures I LLC, the PTAB found claims 1-23 of U.S. Patent No. 7,603,382 B2 (“the ‘382 patent”) to be unpatentable as directed to patent-ineligible subject matter under 35 U.S.C. 101 and Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014) as being directed to an “abstract idea.”

A sample claim of the challenged patent is as follows:

  1.  A system for providing web pages accessed from a web site in a manner which presents the web pages tailored to an individual user, comprising:an interactive interface configured to provide dynamic web site navigation data to the user, the interactive interface comprising:a display depicting portions of the web site visited by the user as a function of the web site navigation data; anda display depicting portions of the web site visited by the user as a function of the user’s personal characteristics.

In arriving at its decision, the Board considered the following arguments on the part of the Patent Owner:

  1. that the claims of the ‘382 patent are not “directed to ‘an idea itself, a mathematical formula or algorithm, a fundamental economic practice long prevalent in our system of commerce, or a method of organizing human activity.'”
  2. that the claims of the ‘382 patent “do not preempt the alleged abstract idea and are transformed by an inventive concept.” That claims 1-6 and 16-23 user the claimed interactive interface to provide tailored content based upon the user’s personal characteristics and the user’s website navigation data.
  3. That the ‘382 patent is not a covered business method patent because the claims are directed to a technological invention.
  4. That Section 101 is not a proper ground upon which a covered business method patent review may be maintained.

The Board based its decision regarding argument 1 on the recent U.S. Supreme Court holding in Alice, setting out a two-step test for patentability of an abstract idea. Key to this step 1 was a statement by the Patent Owner’s expert, who testified that “the patent is described at what may appear to be a fairly high abstract level.” In responding to argument 2, the Board held that the limitations of the claims do not contain an “inventive concept” to “transform” the claimed abstract idea into patentable subject matter. Key to this step was, again, testimony of the Patent Owner’s expert that “the ‘382 patent lacks implementation details because it is written at a ‘fairly high abstract level.’” The Board distinguished the ‘382 patent from the Federal Circuit’s decision in DDR Holdings, LLC v., L.P., 773 F.3d 1245 (Fed. Cir. 2014). In responding to argument 3, the Board held that in at least claim 11 “there is no technological feature in that claim that is novel and unobvious.” Finally, in regard to argument 4, the Board held that Section 101 is a proper ground for instituting a Covered Business Method patent proceeding.

Alice Corp. v. CLS Bank Intl: the Supreme Court supports a “New Hermeneutic of Suspicion?”

Alice Corp. v. CLS Bank Intl (573 U.S. ___ (2014)) held that Petitioner’s method, computer readable media, and system claims are drawn to a patent-ineligible abstract idea. Here, I focus not on the definition of an “abstract idea” (the Court avoided such a definition) but rather on how the Court’s holding appears to affirm the “new hermeneutic of suspicion” that I discussed in my blog post analyzing the per curia Federal Circuit opinion (CLS Bank Intl v. Alice Corp., 717 F.3d 1269, 106 U.S.P.Q.2d 1696 (C.A. Fed. 2013)). In the case at hand, the Court did not distinguish among the ineligibility under 35 U.S.C. 101 of the method, media, and system claims, but rather rejected them all. The Court also did not take into account the dissenting in part opinions of Federal Circuit Judges Rader, Linn, Moore, and O’Malley that the system claims are eligible for patent protection under 35 U.S.C. 101 even though the method claims are not. Rather, in passing the Court stated that “This Court has long ‘warned…against’ interpreting §101 ‘in ways that make patent eligibility depend simply on the draftsman’s art.’” The Court appears to accept Judge Lourie’s opinion in the per curia case that “the asserted method and system claims require performance of the same basic process” and therefore simply adding a computer to the system claims does not save them from ineligibility. 106 U.S.P.Q.2d 1696. The Court’s opinion appears to support the Federal Circuit’s analysis whereby system claims, even though drawn to a computer with hardware,  are no more eligible than the method claims because the reviewing court suspects the patent draftsman of  “artfully” attempting to avoid the ineligibility of the method claims. As Federal Circuit Judges Moore, Linn, and O”Malley said in their dissenting opinion, such a hermeneutic “may open to ineligibility challenges “hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications systems.” 106 U.S.P.Q.2d ___ (Moore, J; Linn, J; and O’Malley, J. dissenting-in-part). The Supreme Court has not attempted to “delimit the precise contours of the ‘abstract ideas’ category.” In other words, the Court is essentially saying “we will know it when we see it.”

Here is a link to my previous blog post.



CLS Bank v. Alice Corp.: a New Hermeneutic of Suspicion

CLS Bank Int’l v. Alice Corp.PTY, (2013 WL 1020941 (C.A.Fed.)(Dist.Col))), a per curiam opinion of the Federal Circuit, conflates method, system, and media claims in rejecting all of them under 35 USC § 101. The Court’s reasoning depends upon the proscription against “abstract ideas” in Supreme Court judicial precedent interpreting the statute. This article suggests that this is an incorrect approach.

Every patent claim contains an abstract idea. It has to, because we are using words to describe the claimed invention. If we could put the invention itself into a claim, then the idea might not be abstract. Even a claim to a simple mechanical invention such as a wrench is abstract, e.g.,

1. A wrench for removing a bolt from a workpiece.

“Wrench,” “bolt,” and “workpiece” are all abstract at some level: we do not include the actual physical objects in the claim. Of course we don’t because a) the PTO would have to store the actual physical objects and b) any competitor would have to get access to the actual physical objects to design around the claim.

Then, of course, the conscientious patent draftsman, realizing that he or she does not know of all possible prior art, and desiring to get the broadest claim coverage, will proceed to a higher level of abstraction:

2. A tool for removing a fastener from an object.

But “tool” and “fastener” may be too broad, considering the known prior art. Nevertheless, this “abstract” claim will never be rejected under 35 USC § 101. Why? Because it does not claim a computer process. Correctly, the Examiner will look at the other provisions of patentability: 35 USC §§ 112, 102, and 103.

Why should the examination process be different for claims drawn to computer inventions? If we claim the binary code that carries out the programmed function, a claim might not be “abstract,” e.g:

1. A computer, having a processor, a memory, and an input/output device, the memory having binary data, the binary data being executed by the processor, each group of binary digits comprising an instruction directing the processor,  the instructions further comprising:

a) 010010101001

b) 100000100111


But of course, no patent draftsman would write such a claim. The binary representation of the program would be exceedingly long, infringement could only be proved by getting a copy of the actual binary data of the alleged infringer, etc.  Instead, the draftsman would begin by writing an “abstract” claim, e.g.,

2. A method of addition on a computer having a processor, a memory, and an input/output device, the memory having a program executed by the processor, the program comprising the following steps:

a) store a first number in a first portion of the memory;

b) store a second number in a second portion of the memory; and

c) add the first number and second number, storing the result in a third portion of the memory.

The claim now covers the implementation of the program in many possible computers, no matter what the actual binary coding of the instructions is for that computer. This is good. But the claim is abstract: it is not limited to the actual concrete instructions in a particular computer. Note also that the claim claims a mathematical algorithm (addition). It is also a method claim. It is also not limited to a particular machine. For all of the above reasons, the claim would undoubtedly be rejected under § 101, Bilski v. Kappos, and the USPTO Memorandum “Interim Guidance for Determining Subject Matter Eligibility for Process Claims in view of Bilski v. Kappos.”

A different method claim that might be eligible under the “Interim Guidance” memorandum would have the following characteristics:

(1)   incorporation of a particular machine or apparatus;

(2)   the machine or apparatus implements the steps of the method, as opposed to where the machine or apparatus is merely an object on which the method operates;

(3)   the machine or apparatus imposes meaningful limits on the execution of the claimed method steps;

(4)   performance of the claimed method results in or otherwise involves a transformation of a particular article;

(5)   performance of the claimed method does not involve an application of a law of nature;

(6)   a general concept (principle, theory, plan or scheme) is not involved in executing the steps of the method.

Is there any doubt in the reader’s mind that most of the words in the above guidance are abstract? What is the difference between an apparatus “implementing the steps of the method” and the apparatus is “merely an object on which the method operates?” What are “meaningful limits?” What is “transformation” and what is “a particular article?” What is a “law of nature?” What is a “general concept?”

How can a patent draftsman avoid claiming an abstract idea when the USPTO’s guidance is so highly abstract? He or she has a very difficult task, indeed.

So what is the patent draftsman to do? In addition to method claims, the draftsman writes system claims. Presumably, these claims are no longer subject to the “Interim Guidance for Determining Subject Matter Eligibility for Process Claims in view of Bilski v. Kappos” Memorandum. This was a generally accepted best practice until CLS Bank. The draftsman wrote a claim to a computer, a memory, a processor, and an input/output unit. Execution of the claim resulted in the transformation of a particular article (a real-world physical object ideally). The claim did not involve an application of a law of nature (whatever that may be!) And the claim did not involve the execution of the steps of a general concept on the machine (whatever a “general concept” might be!)

A system claim that a draftsperson might write would be the following:

3. A system for adding two numbers, the system comprising a processor, a memory, and an input/output device, the memory having a program executed by the processor, the program comprising the following steps:

a) store a first number in a first portion of the memory;

b) store a second number in a second portion of the memory;

c) add the first number and second number, storing the result in a third portion of the memory; and

d) output the results through the input/output device.

Note that in the above claim: the claim is drawn to physical objects (processor, memory, input/output device); the machine implements the steps of the method; the machine imposes meaningful limits on the execution of the claimed method steps; performance of the claimed method results in the transformation of a particular article (the computer’s memory); performance of the claimed method does not involve an application of a law of nature; and a general concept is not involved in executing the steps of the method.

This claim very likely would not be patentable under 35 USC § 102, but is there any reason to treat it differently under 35 USC § 101 than the claim to a wrench above?

Since CLS Bank, however, the claim must not only pass the USPTO’s “Interim Guidance” memorandum for method claims. CLS Bank now sets up a hermeneutic of suspicion in examining system claims, as well as method claims. Apparently believing that all patent draftspersons employ “clever claim drafting” to merely recast an ineligible method claim into a system claim, the Court in its per curia opinion decides that, although the claims are “formally drawn to physical objects” it is “often a straightforward exercise to translate a method claim into system form, and vice versa.” The “asserted method and system claims require performance of the same basic process.”

Well, of course the system and method claims require “performance of the same basic process”: the invention! As we have seen, any claim to an invention involves the use of words, and therefore involves “abstraction.” We have also seen that the USPTO “Interim Guidance for Determining Subject Matter Eligibility for Process Claims in view of Bilski v. Kappos” memorandum uses highly abstract words to guide the Examiner (and claim draftsperson) in deciding what is an abstract claim. To provide maximum claim coverage for the inventor, the patent draftsperson drafts system claims as well as method claims. Now, after CLS Bank, because the system claims are in the same patent application as the method claims, the ineligible subject matter in the method claims has infected the system claims with ineligibility.

So, continuing with our example, transforming the above method claim into a system claim would not result in patentability.

As Judges Moore, Rader, Linn, and O’Malley write in their dissenting-in-part opinion, the per curia opinion “lump[s] together the asserted method, media, and system claims…holding that they are all patent-ineligible…giv[ing] staggering breadth to what is meant to be a narrow judicial exception.” These judges predict that this holding may be the death-knell for “hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications systems.”

The consequences of Bilski and other recent cases on 35 USC § 101 have now reached a nadir. The snake has swallowed its own tail. In attempting to establish a Procrustean bed on which to make all computer software claims fit, the Federal Circuit is cutting the legs off software patents. The per curia opinion’s statement in CLS Bank that the approach “might also inform patent-eligibility in other contexts” (i.e. medical treatments, gene patents, etc.) can only make one shudder.

Federal Circuit is “Irretrievably Fractured” over System Claims: “CLS Bank v. Alice Corp.”

In CLS Bank Int’l v. Alice Corp. PTY. LTD (2013 WL 1920941 (C.A.Fed.(Dist.Col))), the Federal Circuit has arguably provided the first substantive guidance on the patentability of software patents with claims drawn to systems, methods, and computer readable media since Bilski v. Kappos. And that guidance is arguably not good news for software patents.

In the per curia opinion, the Court writes:

“What is needed is a consistent, cohesive, and accessible approach to the § 101 analysis–a framework that will provide guidance and predictability for patent applicants and examiners, litigants, and the courts. As set forth below, the Supreme Court’s foundational § 101 jurisprudence offers the guideposts to such a system, one that turns primarily on the practical likelihood of a claim preempting a fundamental concept. We would adopt this approach to address the abstractness of the specific computer-implemented inventions presented in this case, but it might also inform patent-eligibility inquiries arising in other contexts.”

Although on the surface the Federal Circuit’s standard procedure for determining the § 101 patent eligibility of software patents does not seem to have been substantially modified, the practical guidance does appear to make it more difficult for the patent draftsman to avoid a § 101 rejection on system, process, and computer-readable media claims.

The Court’s rejection of the process and computer-readable media claims is not surprising considering how close the claims were to those earlier rejected by the Supreme Court in Bilski. However, the Court’s basis for its rejection of the system claims arguably sets forth a new standard. Basically, the Court looks skeptically at system claims that appear merely to cast an ineligible method claim in system form by adding limitations to a computer:

“…applying a presumptively different approach to system claims generally would reward precisely the type of clever claim drafting that the Supreme Court has repeatedly instructed us to ignore. As illustrated by the obvious parallels between the method and system claims now before us, it is often a straightforward exercise to translate a method claim into system form, and vice versa.”

It should be noted that the dissenting opinion of Judges Moore, Rader, Linn, and O’Malley disagrees with the per curia opinion regarding system claims, arguing that the “computer covered by this claim is a tangible item that you could pick up and put on your desk.” However, the per curia opinion arguably significantly narrows the patentability of system claims, stating:

“A particular computer system, composed of wire, plastic, and silicon, is no doubt a tangible machine. But that is not the question. The question we must consider is whether a patent claim that ostensibly describes such a system on its face represents something more than an abstract idea in legal substance. Claims to a computer were, and still are, eligible for patent. No question should have arisen concerning the eligibility of claims to basic computer hardware under § 101 when such devices were first invented. But we are living and judging now…and have before us not the patent eligibility of specific types of computers or computer components, but computers that have routinely been adapted by software consisting of abstract ideas, and claimed as such, to do all sorts of tasks that formerly were performed by humans. And the Supreme Court has told us that, while avoiding confusion between § 101 and §§ 102 and 103, merely adding existing computer technology to abstract ideas — mental steps — does not as a matter of substance convert an abstract idea into a machine…Abstract methods do not become patent-eligible machines by being clothed in a computer language.”

The Moore, Rader, Linn and O’Malley dissenting opinion takes strong issue with the per curia opinion, dramatically holding that “the current implementation of § 101, and in particular the abstract idea exception, is causing a free fall in the patent system…if all of these claims, including the system claims, are not patent-eligible, this case is the death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunication patents.”

Considering that the Federal Circuit is “irreconcilably fractured over these system claims,” Judges Moore, Rader, Linn, and O’Malley believe the Supreme Court must once again address § 101.

Baseball Bats, Chocolate Chip Cookies, and Warp Drives: the Supreme Court Hears Oral Argument in Myriad Genetics

On Monday, April 15, 2013, the United States Supreme Court heard oral argument in Association of Molecular Pathology vs. Myriad Genetics. As has been amply discussed, this case involves the patent eligibility under 35 U.S.C. 101 of certain isolated DNA molecules encoding a mutation that is associated with an increased risk of breast cancer in women.

The American Intellectual Property Law Association (AIPLA), in its amicus brief in support of neither party, provides an excellent framework that could, and should, be used by the Justices in deciding this case. As AIPLA points out, this case is not about patentability, but about patent eligibility:

“To be sure, ‘human genes’ as they exist in the body are not ‘patent eligible’ under 35 USC 101; they also are not patentable under other provisions of patent law. For instance, human genes are not ‘new’ and therefore a claim to a human gene would be anticipated by naturally occurring human genes in contravention of 35 U.S.C.  102. ‘Patentability,’ however, is not at issue in this case. ‘Patentability’ refers to compliance with all statutory provisions that govern whether a patent is valid and enforceable, including those directed to, inter alia, obviousness, anticipation, enablement, and written description. The focus of this appeal is solely on 35 U.S.C. 101, the gatekeeper provision that determines what subject matter is eligible for patent protection.” AIPLA Amicus Brief, p. 3.

Rather than following the Supreme Court’s own precedent in earlier cases that addressed the patentability of “products of nature” (such as Diamond v. Chakrabarty, 447 U.S. 303 (1980) and Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948)), some of the Justices seem to focus on the difficulty of the invention. The Court’s own holding in Chakrabarty is that whether a composition of matter passes the eligibility threshold of 35 U.S.C. 101 depends on whether the claimed composition is “a product of human ingenuity ‘having a distinctive name, character, and use” from naturally occurring starting materials.” 447 U.S. at 309-10. However, some of the Justices seem to be focusing more on the level of human ingenuity involved than on the characteristics of the claimed composition. Not only so, but they appear to be turning the degree of difficulty on its head.

For example, some of Chief Justice Roberts’ questions to the attorney for Myriad Genetics focus on the difficulty of making a baseball bat from a tree branch as opposed to “simply” cutting the claimed DNA molecules out of a human gene.

“CHIEF JUSTICE ROBERTS: My understanding -my understanding is that here, what’s involved, obviously through scientific processes, but we’re not talking about process. Here, what’s involved is snipping. You’ve got the thing there and you snip -snip off the top and you snip off the bottom and there you’ve got it.
The baseball bat is quite different. You don’t look at a tree and say, well, I’ve cut the branch here and cut it here and all of a sudden I’ve got a baseball bat. You have to invent it, if you will. You don’t have to invent the particular segment of the — of the strand; you just have to cut it off.”

According to Roberts’ remark, the former would be patent eligible but the latter is questionable.

In an even more absurd analogy, Justice Sonia Sotomayor compared the nucletotide sequence of isolated DNA to the natural ingredients in chocolate chip cookies such as eggs and flour.

“JUSTICE SOTOMAYOR: I can bake a chocolate chip cookie using natural ingredients — salt, flour, eggs, butter — and I create my chocolate chip cookie. And if I combust those in some new way, I can get a patent on that. But I can’t imagine getting a patent simply on the basic items of salt, flour and eggs, simply because I’ve created a new use or a new product from those ingredients.”

With all due respect to Justice Roberts’ ability as a carpenter and Justice Sotomayor’s talents as a chef, these remarks signal the Court’s fundamental mis-characterization of the biological molecules involved in the case and the difficulty of obtaining them. The Supreme Court should uphold the Federal Circuit in finding the claimed isolated DNAs as patent eligible under 35 U.S.C. 101.

If these simplistic analogies were to win the day, might it not be possible (purely on the basis of 35 USC 101) to allow a patent for a new baseball bat and deny one for the Star Trek Warp Drive? Is there not something wrong with a jurisprudence that even entertains such questions? If the “person on the street” were asked “Which invention is more worthy of a patent: a new baseball bat or a warp drive?” can anyone credibly believe that the person would choose the former? Which advances the frontiers of science more?

The problem suggested by these simplistic analogies seems to be one of finding “laws of nature” (and thus ineligibility under 35 USC 101) the further that science goes towards the microscopic but not finding such “laws of nature” at the macroscopic level. Hence, such arguments as those above and in those presented earlier at the Federal Circuit (which Judge Lourie capably defeated).

One way of understanding the scientific and philosophical  implications of this case is presented in my earlier article “Myriad Genetics: Laws of Nature and the Philosophy of Science”…phy-of-science/

Five Reasons to File a US Patent Application as Soon as Possible, after March 16, 2013

On March 16, 2013, a fundamental change to United States patent law occurred. The America Invents Act (AIA) first-inventor-to-file (FITF) provisions went into effect. Since that date, any new patent application will be examined under the FITF provisions instead of the previous first-to-invent (FTI) provisions. What does this mean to you or your client as a United States inventor? This alert summarizes five reasons why it is important to file a United States patent application as soon as possible after the invention and before any public disclosure. 

Reason #1:  Another inventor who files a US patent application first may get the patent that you want. Under the AIA, the first inventor to file (not the first to invent) is presumed to be entitled to a patent. 

Reason #2: Even if another inventor who files a US patent application first does not get a US patent, publication of that patent application may be “prior art” that would prevent your patent from issuing. Under the AIA, US patent application publications are prior art as of the date that they are “effectively filed” (which may include a foreign or domestic priority date). The US Patent and Trademark Office (USPTO) can use such application publications to reject your US patent application that was filed between the effective filing date of the other patent application and that patent application’s publication date (generally 18 months after the filing date). 

Reason #3: The AIA, unlike the previous patent law, does not provide a way for you to “swear behind” a publicly available document or patent publication to prove that your invention preceded this prior art. This is the result of the change of the law from FTI to FITF. 

Reason #4:  Your or another’s public disclosure of the same or similar invention may be prior art that would prevent your patent from issuing unless you file a patent application claiming that invention within one year of such public disclosure. The AIA provides a one year “grace period” for your own public disclosure, but you might forget to file a patent application within one year. The AIA does not provide a one year grace period to you for another’s public disclosure, unless the other person obtained the subject matter of the invention directly or indirectly from the inventor or a joint inventor (or unless you first publicly disclosed the subject matter of the invention within the one year grace period). 

Reason #5: Your or another’s public disclosure, even if you file a US patent application within one year, may prevent your patent issuing in another country, which does not have the one year grace period that the AIA provides for US patent applications. However, a US patent application filed before public disclosure of the invention is honored by most countries. 

This is only a summary of the AIA FITF provisions. There are many other sections of the AIA and the sections have a great deal of interaction. You should contact a registered patent attorney for further information.

USPTO Receives Huge Increase in Patent Application Filings Prior to AIA FITF March 16, 2013

On March 16, 2013, the first-inventor-to-file provisions of the America Invents Act (AIA) went into effect. The USPTO and many patent professionals predicted that there would be a huge influx of new patent application filings in the month before this deadline. Statistics from the USPTO Data Visualization Center confirm this. The following graph shows the rapid increase in the number of new (non-RCE and provisional) patent application filings in the month before March 16, 2013. The blue line is the number of non-RCE filings and the magenta line is the number of provisional filiings. Apparently, a lot of applicants wanted to take advantage of the pre-AIA first-to-invent law.


USPTO Final Rule Changes Need for Statement about Transition Applications

On February 14, the U.S. Patent and Trademarks Office (USPTO) announced its final rules implementing the first-inventor-to-file (FITF) provisions of the AIA, scheduled to go into effect on March 16, 2013. After a number of comments from stakeholders, the USPTO changed the rule regarding patent applications filed on or after March 16 that claim priority to an earlier-filed application.

Previously, the United States Patent and Trademark Office had issued proposed rules implementing the first-inventor-to-file provisions of the America Invents Act (AIA).

Among other things, the Office had proposed additional requirements for nonprovisional applications filed on or after March 16, 2013, that claim the benefit of the filing date of a foreign, provisional, or nonprovisional application filed prior to March 16, 2013. According to the proposed rule, if a nonprovisional application contains at any time a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant would be required to provide a statement to that effect. A statement would also have been required if the nonprovisional application does not have a claim to a claimed invention that has an effective filing date on or after March 16, 2003 but discloses subject matter not also disclosed in the foreign, provisional, or nonprovisional application.

The Office is providing in the final rule that a statement is required only if a transition application contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013. Thus, no statement is required if a transition application discloses subject matter not also disclosed in the prior- filed foreign, provisional, nonprovisional application, or international application designating the United States of America but does not ever contain a claim to a claimed invention that has an effective filing
date on or after March 16, 2013. The Office is also providing that an applicant is not required to provide such a statement if the applicant reasonably believes on the basis of information already known to the individuals designated as having a duty of disclosure with respect to the application that the transition application does not, and did not at any time, contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013.

Thus, an applicant in this situation is not required to conduct any additional investigation or analysis to determine the effective filing date of the claims in their applications.

The Games PTO Plays: Exelexis and Patent Term Adjustment

Younger patent attorneys and many clients are not aware that the period during which a patent remains in force (the patent term) was at one time 17 years from the date of issue rather than 20 years from the filing date of the patent application. The change was made in Section 534 of Pub. L. 103-465, so that “the term of a patent granted on an application filed on or after June 8, 1995…shall be measured from the filing date of the earliest filed application.” The result is that under the current law, every patent application absorbs all delays that are caused either by the U.S. Patent and Trademark Office (USPTO) or by the applicant, such that the lifetime (20 years from the filing date) of the patent is reduced by any such delays. Statistics from the USPTO’s Data Visualization Center reveal the very real problems that current patent applicants find in obtaining the full 20-year patent term.

The change from 17 years from issue date to 20 years from filing date was put into place at a time (1994) when the time from the filing of a patent application to the issue of the patent was much shorter than it is today. For example, the 1995 Inspector General’s Report, Table I, lists the pendency time of the average patent application between 1990 and 1994 increasing from 18.3 months in 1990 to only 19.0 months in 1994. In sharp contrast, the “traditional total pendency” during the eleven months ending November 2012 was 40.7 months as shown in the USPTO Data Visualization Center. Remarkably, the bulk of this time (26.1 months) was time in which the patent applicant was waiting for the first Office Action. This is not a surprise when one considers the increase in the number of patent applications filed and the resulting backlog.  In 1994, 185,087 patent applications were filed and 189,646 were “disposed of,” that is, issued or abandoned, so there was apparently no increase in the backlog. In contrast, the application backlog as of September 2012 was 608,283. The USPTO under Director Kappos has made significant improvements in this backlog, but it is still very large. Current patent applicants can expect to wait almost 20 months from their filing date to the first response, or “office action,” from the USPTO.

As a step towards fairness to the patent applicant, in 1999 the Patent Term Adjustment (PTA) section was passed by Congress as 35 USC Section 154(b)(1). Under this section, the patent term is adjusted for both PTO delays and applicant delays; the patent term is increased day-by-day for each PTO delay, this figure being offset by any delays caused by the patent applicant. For example,  the patent term is increased for each day beyond 14 months from filing to the first Office Action. This adjustment is called “A-delay.” Also, if the PTO does not issue a patent within 3 years of the filing date, a day-to-day increase in the patent term occurs. This adjustment is called “B-delay.” However, both A-delay and B-delay are reduced by applicant delay under 35 USC 154(b)(2)(C) “by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application.”

Section 154(b), unfortunately, sets up a “game-playing situation” by the USPTO and the applicant. The USPTO has an incentive to minimize PTA , in order to comply with its mission of speedy patent examination. In contrast, the applicant who experiences very long pendency times has an incentive to maximize PTA in order to preserve as much patent term as possible. Some sophisticated examiners also have a conflict between their management’s goal to minimize PTA and the patent examiner compensation system, known as the “count” system. Under this system, an Examiner is credited with 2.00 “counts” for each application “disposed of,” i.e., issued or abandoned. However, if the Examiner can force the patent applicant to file a Request for Continued Examination (RCE), the Examiner will get an additional 0.5 count and may then get an additional 2.00 counts for each subsequent RCE. Under this system, the Examiner is incentivized to delay patent issuance, while USPTO management is attempting to speed up patent issuance.  The USPTO changed the count system on September 30, 2009, so that the counts for subsequent RCEs are reduced.  Perhaps due to this change, the backlog of unexamined patent applications has decreased from 716,428 in October 2011 to 608,283 in September 2012. Yet, the Examiner is still credited for each RCE that the patent applicant is forced to file.

Applicants may also “game” the system. In some circumstances, the applicant may wish to delay issuance of a patent until the corresponding technology has been commercialized, thus allowing greater returns from a patent infringement suit. The applicant can do this by filing RCEs. However, in some technologies, particularly pharmaceuticals, there is a huge cost to such delays, because the enormous investment in a new drug requires as much patent term as possible to recoup that investment. Alternatively, the applicant can appeal to the newly-renamed Patent Trial and Appeal Board (PTAB).  However, this is no quick route to issuance: statistics show that an appeal will increase the pendency of a patent application from 39 months to almost 90 months. If the patent applicant is ultimately successful, the USPTO will award PTA for the time consumed by the appellate review and processing between a notice of allowance and patent issuance – but not if the applicant appeals unsuccessfully. Consequently, after two final rejections, the applicant has no way of knowing whether or not filing an RCE or alternatively an appeal will result in the most preservation of B-delay.

To summarize the foregoing, USPTO has an overall incentive to minimize PTA, even though the individual Examiner has an incentive, indirectly, to maximize his or her return by forcing the filing of one or more RCEs. Strangely, the individual Examiner’s incentive maps to the incentive of some patent applicants to delay issuance of a patent, as discussed above. However, one would think that such applicants would be in the minority: most patent applicants want either the patent to issue quickly or to have the patent term extended by any USPTO delays.

Statistics from the Data Visualization Center shed some light on the consequences of filing an RCE: “traditional total pendency” increases from 31.7 months (no RCE) to 38.6 months (RCE filed). If 35 USC 154(b)(1)(B) is interpreted to include the time from filing an RCE to a notice of allowance, it would appear that an average of 2.6 months (38.6 – 36) of B-delay would be awarded. But not if the filing of an RCE prevents the accumulation of further B-delay.

The recent U.S. District Court (E. D. Va.) case Exelixis, Inc. v. Kappos (Exelixis I) ( illustrates how USPTO has interpreted 35 USC 154(b)(1)(B) to minimize B-delay. In that case, the USPTO argued that any B-delay stops accumulating as soon as a patent applicant files an RCE, although it still might accrue A-delay (and C-delay, which I have not discussed). However, in Exelixis I, Judge Ellis found that USPTO’s interpretation of such an “RCE carve-out” is contrary to the law of 35 USC 154(b). This case has been appealed.

Incredibly, the same court recently issued a decision in different Exelixis case, (Exelixis II) (  that affirms the USPTO’s interpretation of 35 USC 154(b)(1)(B); Judge Brinkema’s decision is in direct conflict with Judge Ellis’s decision in Exilixis I. This case will probably also be appealed.

The result of the appeal could be momentous for patent applicants. If the appeals court upholds the USPTO interpretation, any patent application that is pending with an RCE filed before or after 3 years from the filing date of the patent application will lose the accrual of all B-delay after the RCE is filed. For example, suppose an application is filed on January 1, 2013. If the USPTO does not issue a patent by January 1, 2016, B-delay will start accumulating. Suppose, then, that the patent does not issue until January 1, 2018: the patent term will be extended by 2 years. However, if the patent applicant files an RCE before or after after January 1, 2016, such a filing will stop the accrual of B-delay. Again supposing that the patent does not issue until January 1, 2018, the patent’s term will be reduced by 2 years. For industries such as “big pharma,” huge losses may be involved.

One gets the distinct impression that the USPTO operates in a fantasy world in which all applicants and patent examiners do a thorough prior art search so that a correct decision to issue or reject the patent application occurs during the initial filing, without the need for the applicant either to file an RCE or to appeal. (See Exelixis II: “…such delay emanates solely from an applicant’s original failure to file an application fit for a notice of allowance.”) Therefore, the USPTO apparently views the filing of an RCE as a penalty against an applicant who has intentionally “failed to engage in reasonable efforts to conclude prosecution of the application.”  If the USPTO prevails in Exelexis I and Exelexis II, many patent applicants will lose substantial portions of the 20-year patent term that was introduced in 1995. This seems unreasonable given the very lengthy prosecution period now as compared to 1994.

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