Category Archives: Procedure

“The Innovation Act of 2013” – Representative Goodlatte Introduces New Bill Seeking to Curb Perceived Patent Litigation Abuses

On October 23, 2013, House Judiciary Committee Chairman Robert Goodlatte introduced “The Innovation Act of 2013.” (H.R. 3309) The bill is in response to perceived abuse of the patent litigation system by Non-Practicing Entities (referred to derogatorily as “Patent Trolls.”) The bill is being distinguished from other recent reform proposals on the basis that it “target[s] abusive behavior rather than specific entities.”  The bill’s authors have been careful to note that it does not attempt to eliminate valid patent litigation.  Rather, the stated goal is “preventing individuals from taking advantage of gaps in the system to engage in ‘litigation extortion.’”

Some of the key highlights of the bill are:

1.         Heightened pleading requirements.  Without limitation, the bill would require Plaintiffs to provide: i) an identification of each patent and each claim allegedly infringed; ii) an explanation as to where each element of each claim is found in each “accused instrumentality”; iii) whether each element is infringed literally or under the doctrine of equivalents; iv)  how the terms of each claim correspond to the functionality of the accused instrument; v) for any indirect infringement, a description of the direct infringement and any acts allegedly inducing or contributing thereto; vi) allege indirect infringement; vii) a description of the “right” of the party to assert infringement, viii) a description of the principal business of the party alleging infringement; and ix) a list of all infringement complaints involving the same patent(s).

2.         Joinder.  The bill would allow joinder of an “interested party” where a defendant shows the plaintiff has no substantial interest in the patent other than asserting it in litigation.  “Interested Party” is defined to include: i) assignees of the patent; ii) persons with a right to enforce or sublicense the patent; iii) persons with a direct financial interest in the patent, including attorneys and law firms representing the plaintiff;

3.         Attorneys Fees to the Prevailing Party. The bill provides that the court “shall” award reasonable fees and other expenses to the prevailing party unless the position of the non-prevailing party was “substantially justified” or “special circumstances make an award unjust.”  Of note – the bill expressly allows prevailing defendants to collect fee awards from non-plaintiffs having a substantial interest in the patent-at-issue.

4.         Limitations on Discovery.  The bill would allow only limited discovery until after claim construction.

The bill also contains substantive changes to the AIA’s new IPR and PGR proceedings.  First, the bill seeks to limit PGR estoppel. Under the AIA, PGR creates estoppel for “any ground that the petitioner raised or reasonably could have raised. . .” 35 U.S.C. § 325(e) (italics added.)  The bill would narrow such estoppel solely to grounds actually raised.  The authors of the bill presumably want to promote use of PGR by limiting estoppel concerns.

Second, the bill seeks to change the PTO’s longstanding practice of applying the broadest possible claim construction in review proceedings.  The proposed bill would require the PTO to “constru[e] each claim of the patent in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent.” To the extent the authors of the bill are seeking to curtail NPE litigation, one wonders why they would propose a narrower claim construction, thereby making it easier for the NPEs’ patents – many of which are perceived to be obvious and overbroad — to survive review.

To see why former USPTO Director Kappos supported and favored continuing application of the broadest possible claim interpretation see


The new AIA Inter Partes Review proceedings (“IPR”) became effective September 16, 2012.  USPTO statistics reveal IPR has been widely accepted with IPR filings steadily increasing.  In October 2012, the first full month the new IPR procedures were in effect, approximately 25 IPRs were filed. Less than a year later in July 2013, approximately 75 IPRs were filed – a 200% increase.  A total of 459 IPRs were filed through August 30, 2013. The rate of IPR filings now greatly exceeds the average filing rates for the old Inter Partes Reexamination proceedings.

Interpartes review data

inter partes reexam data

Inter Partes Reexamination

A variety of factors are responsible for the widespread acceptance and utilization of IPR, including: 1) the expedited nature of IPR (decision required within 12 months of filing); 2) the availability of limited “litigation” style discovery; 3) the express ability of the parties to enter into a settlement prior to a final decision (“put the genie back in the bottle”); and 4) filing deadlines (a defendant in a patent litigation may only request IPR for up to one year after being served with the complaint).

In addition to the new benefits afforded by IPR, the traditional benefits of administrative review verses a district court challenge remain, including: 1) significantly lower average attorneys fees; 2) lower “preponderance of the evidence” standard (compared to heightened “clear and convincing evidence” applied in district court); 3) no presumption of validity; and 4) application of broadest claim interpretation (compared to district court canon that claims be construed to preserve their validity).

IPR has continued to gain momentum despite the AIA’s adoption of a heightened standard for commencement/initiation of the review proceeding.  The old “substantial new question of patentability” standard resulted in roughly 95% of Inter Partes Reexamination proceedings being allowed to proceed.  The “SNQ” standard has been replaced by what was intended to be a heightened standard.  Specifically, an IPR requestor must now establish a “reasonable likelihood that the requestor will prevail with respect to at least one of the claims challenged.”  The initial data indicates a slight decrease in the initiation rate under the new standard.  Through August 2013, 87% of IPR petitions filed have been allowed to proceed.

Based on one year of data, it appears the USPTO will increasingly become the forum of choice for patent validity challenges.

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 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.

Can You Trademark Anything?

Apparently so.  After recently watching the movie Moneyball, I got to thinking about value in IP.  Trademarks, and in particular alternative trademarks, are the most undervalued and under-utilized form of IP protection.

Case in point, United States Trademark Registration No. 4,277,914 for the mark shown below:

apple store

The registration is owned by Apple and covers the design of an Apple Store, and issued on January 22nd.  That’s right – Apple trademarked the look of an Apple Store, and it really wasn’t that difficult.  They received an initial rejection on the grounds that the 3-dimensional store configuration was not inherently distinctive trade dress. (more…)

AIA’s March 16th Deadline Approaches

As you may know, the America Invents Act (AIA) has key amendments to the patent law effective March 16, 2013 that will convert our patent system to a “first inventor to file” system for granting priority to patents as opposed to our current system of “first to invent”.  This means starting March 16, 2013 there will be many inventors and their companies who will race to the Patent Office to be first to file.

In order to ensure upcoming patent applications fall within the existing rules granting priority to the first to invent and avoid triggering the new rules granting priority to the first inventor to file, many patent applications will have to be filed before March 15, 2013. Over the next three months, the Patent Office expects to be overwhelmed with new patent applications.

On and after March 16, 2013, this means that it will be important to file your patent applications at the earliest practical date so that others do not file before you on the same invention.  In other words, if someone else files a patent application on your invention before your filing date, you may lose rights to your invention.  Because of Patent Office confidentiality (the first 18 months from filing date),  no one will be able to monitor the Patent Office filings to check whether someone else has filed before you.

Federal Circuit on Mootness: “We do not play dice.”

Like any gambling, betting on an appeal can be risky.

Allflex USA v. Avid Identification is an appeal from an declaratory-judgment action for unenforceability and non-infringement for six different patents related to RFID tags for pets. The district court made three rulings that Avid appealed: (1) that Avid “should be sanctioned” for not disclosing pending reexamination proceedings; (2) granting summary judgment of non-infringement, and (3) granting partial summary judgment after concluding that Avid’s failure to fully disclose prior public use and offers to sell one of its products was material to the inequitable conduct. Dice

Then the parties settled—sort of. The Federal Circuit explains:

By its terms, the agreement resolved all claims and issues between the parties other than those raised in this appeal. As part of the settlement agreement, Avid agreed to pay $6.55 million to Allflex. The parties further agreed that Avid would be free to appeal the three issues referred to above—[non-infringement, materiality of prior public use and offers, and the “should be sanctioned” ruling.] Avid also reserved the right to appeal the district court’s claim constructions and any other “underlying orders, objections, opinions, and rulings.” For its part, Allflex retained the right to contest any appeal on the merits, but the settlement explicitly barred Allflex from disputing the existence of a live case or controversy. The agreement further provided that, “[i]n the event AVID is successful in overturning any of such findings,” Allflex would pay Avid $50,000, i.e., the settlement amount to be paid to Avid would be reduced from $6.55 million to $6.5 million.

After the settlement, the district court entered a stipulated order, which dismissed the action with prejudice “with the exception of the following findings, which are final and ripe for appellate review.” The district court listed non-infringement, materiality, and sanctions as the issues ready for review.

Avid appealed and filed its opening brief. Allflex did not file a brief. Read the rest of this entry

The Crossclaim Loophole Left Open by the America Invents Act, Inter-circuit Patent-law Splits

Congress established the United States Court of Appeals for the Federal Circuit over 30 years ago to bring uniformity to patent law. But the Federal Circuit is not truly a national patent court.

The Federal Circuit has never had jurisdiction over all appeals involving patents. The jurisdictional statute that Congress wrote for the Federal Circuit gave that court appellate jurisdiction over any civil action “arising under” the patent laws. OLYMPUS DIGITAL CAMERA

For many years, it was an open question whether the Federal Circuit had appellate jurisdiction over an action where there was no patent claim in the complaint but there was a patent claim in the answer or counterclaim. Read the rest of this entry

Protip: Don’t raise 8 issues on appeal

Here’s something you never want to see in response to one of your appeals:

Both parties have appealed and have raised many—too many—issues.

Accentra v. Staples is a multi-patent and trademark dispute between owners and licensees of several patents concerning staplers. Both Accetra and Staples prevailed in part in the district court, and both appealed. The parties raised at least the following issues:stapler

  1. Claim construction for the ’768 patent
  2. A means-plus-function non-infringement argument for the ’692 patent
  3. A literal non-infringement argument for the ’692 patent
  4. Indefiniteness finding against the ’709 patent
  5. Damages (The awarded amount was higher than any figure proffered by either party’s expert.)
  6. Trademark infringement
  7. Willfulness

These seven issues are merely the ones identified in the opinion, which suggests other issues were raised, too. “We have carefully considered the remaining issues on appeal…we affirm the district court’s rulings on each of those issues.”

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