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LAW OFFICE OF DONALD J. PAGEL

Patent and Trademark Law

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The Right Way to Start a Business (June 7, 2016)


Professional surfer Kelly Slater has demonstrated how you start a ground (or maybe water) breaking business.  Slater’s new venture would allow surfing in large artificial pools.  The technique uses a submerged “foil” driven along a mechanical track to create a solitary wave.  The bottom of the pool is configured to make the solitary wave break like an ocean wave.  U.S. Pat. No. 8,573,887 illustrates the method and wave generator apparatus.  Videos of a working prototype of the system are available online (Kelly Slater Wave Co. - YouTube).  The patent illustrates very good inventive technique: Slater identified a product idea (conception); he hired an engineer to help him develop the idea (pre-AIA reduction to practice); he filed sufficient patent applications to protect the idea (including international patents); and sometime during this process, he lined up financing.  On top of this, he actually built the product.  I predict you’ll be hearing more about this business.



Provisional Applications:  If They’re Worth Doing, They’re Worth Doing Right (October 27, 2015)

 

Inventors sometimes make the mistake of thinking that provisional patent applications are “short-cut” applications that provide a quick and inexpensive way to get a patent application filed. This is probably because provisional applications are not required to include a set of claims at the end, and this causes people to think that an abbreviated description of the invention can also be filed. This is incorrect because provisional applications are subject to the same disclosure requirements as regular, non-provisional patent applications. In other words, if you want your non-provisional application to be entitled to the filing date of the provisional application, the provisional application must contain both a legally adequate written description of the invention and must enable an ordinarily skilled artisan to practice the invention that is claimed in the non-provisional application. So, even though the provisional application doesn’t have to include claims, it still needs sufficient written disclosure and enablement to support the claims that eventually will be presented in the non-provisional application.


This point is illustrated by the recent case of Dynamic Drinkware LLC v. National Graphic, Inc. (Federal Circuit, September 4, 2015).  Dynamic Drinkware (“Dynamic”) was trying to use a third party patent (“Raymond”) as prior art (under pre-AIA §102(e)(2)) to invalidate some claims in National’s patent during a PTAB proceeding. The Raymond patent claimed the benefit of a provisional application that was filed before National’s invention was reduced to practice. However, the court upheld the PTAB’s finding that Dynamic did not prove that Raymond’s provisional application contained sufficient disclosure to support the claims in Raymond’s issued patent.  Therefore, the Raymond patent was not entitled to the priority date of its provisional application and could not be used as prior art against National’s patent.


One take-away lesson illustrated by Dynamic Drinkware is that provisional patent applications need to be prepared with the same amount of deliberation and hard work as non-provisional applications. There are still advantages to filing provisional applications, but a  “short-cut” to patent filing is not one of them. 
It should be noted that Dynamic Drinkware is a procedural case, not a case about patent drafting, but the lesson for patent drafting is still there.



Silicon Valley Satellite Patent Office Opens on Historic Site  (September 12, 2015)

The long-awaited permanent satellite office of the United States Patent Office is scheduled to open in San Jose, California on October 15, 2015.  The satellite office will be located in the San Jose City Hall complex at 200 E. Santa Clara Street and will provide some inventors and/or their attorneys with the opportunity for face-to-face interviews with examiners to discuss their patent applications.  The satellite office will also present programs related to commerce, such as patent and export programs, to help individuals and businesses.  On a note of historical interest, the San Jose City Hall complex was built on the site of the first public Grateful Dead performance which took place in December of 1965 in a house on S. Fifth Street (
Historic rock landmarks in Santa Clara County).


Business Method Claims

On June 19, 2014, the U.S. Supreme Court decided the case of Alice Corp. v. CLS Bank (“Alice Corp.”).  Continuing a trend in patent law interpretation, the Supreme Court found that claims directed to a method of using a computer as a third party intermediary to ensure performance of an obligation (like a clearinghouse or escrow service), were merely claiming an “abstract idea” and hence were invalid. The key lesson from Alice Corp. is that if your claims include a known process (e.g. a method or algorithm), especially a well-known business method, you need to include additional features in the claims that demonstrate the uniqueness or ingenuity of your method.  Merely, implementing the known process on a computer is not sufficient, even if computer implementation has not been done before.

 

Some Patent Law Changes Taking Effect March 16, 2013

Under the Leahy-Smith America Invents Act (AIA), the following major changes to the U.S. patent law became effective on March 16, 2013: First, the party who is entitled to receive a U.S. patent is the first inventor to file the patent application (an assignee of the invention can also file the patent application and receive the patent).  This major change to the patent law means that inventors (or employers or other patent right owners) need to file patent applications at the earliest possible date.  If a competitor files an application for a similar invention before you do, you probably lose the right to the patent, regardless of how much time, money or effort you’ve spent developing the invention.  It seems likely that the filing of provisional patent applications will increase as a method for obtaining the earliest possible filing date.

Second, the definition of prior art has been changed so that certain events happening anywhere in the world may constitute prior art.  Additionally, the deadline for determining prior art is now the effective filing date of the application, not when the invention was made.  Disclosures that happen before the effective filing date of the application might qualify as prior art, whereas anything that happens after the effective filing date is not prior art. Therefore, this is another reason to file U.S. patent applications at the earliest possible date, because early filing minimizes the amount of prior art that can be cited against your application.

Third, there is still a one year grace period for disclosures made by an inventor (or by someone who obtained the subject matter from the inventor) that prevents the disclosure from being counted as prior art against a U.S patent. 

Finally, a disclosure that appears in a patent or published patent application filed by another party will not be counted as prior art against an inventor if the disclosed subject matter was obtained from the inventor, or was previously disclosed by the inventor.  This provision creates a potentially interesting patent filing strategy where an inventor who is only interested in U.S. patent rights (i.e. is not interested in foreign patent rights) and who cannot immediately file a U.S. patent application, might want to publically disclose the invention (e.g. at a trade show or in a publication) to prevent a third party’s subsequently filed patent or application from being used as prior art against the inventor’s patent application when it is eventually filed within the one year grace period.

 

Some Patent Law Changes Taking Effect September 16, 2012

A number of provisions of the Leahy-Smith America Invents Act (AIA) take effect on September 16, 2012.  Several of these provisions provide a framework for resolving patent disputes without having to go to federal court.  Taken together, these provisions mean that businesses must add a new level of planning to their intellectual property strategic thinking regarding how they want to deal with a competitor’s patents and patent applications and what steps they want to take to protect their own patents and patent applications from attack by others.  The provisions are summarized below and can be divided into two groups: low cost procedures and expensive procedures.

A. Two Low Cost Methods for Challenging a Competitor’s Patent Application or Patent and One Moderately Priced Method for Strengthening An Issued Patent

1) Getting an Examiner to Consider Prior Art in a Competitor’s Patent Application (Third Party Submission of Prior Art in a Patent Application) - A third party can submit written prior art to the US Patent and Trademark Office (PTO) for consideration in a competitor’s patent application.  This process has been available for a number of years, but the deadlines for using it were unreasonably short.  The AIA has expanded the time limits during which a third party can have prior art placed in another party’s patent application file.  The new time limits mean that this procedure can be used for at least six months after the application has been published or until an office action or notice of allowance is issued.  Using this procedure would allow the examiner to consider the newly submitted prior art in a competitor's patent application and possibly reject or narrow the claims that would be allowed, without having to resort to expensive litigation or another expensive procedure after the patent has issued.  The PTO fee is only $180 for each ten documents submitted and there is no fee for three or fewer documents.

2) Placing Documents in the File of a Competitor’s Issued Patent (Citation of Prior Art in a Patent File) - After a patent has issued, a third party can still have prior art and certain other types of information placed in the file of the issued patent so that anyone else looking at the file will presumably be made aware of the information.  Using this procedure, the newly submitted documents might be used by someone else to invalidate or narrow some or all of the claims in the patent, or they might cause the patent owner to voluntarily narrow the claims.  The attractiveness of this process is that it can be used without having to incur the costs of litigation, post grant review or inter partes review (discussed below). There is no PTO fee for this procedure.

3) Supplemental Examination - This is a low cost to moderately expensive method for a patent owner to clear up potential problems in an issued patent.  Under this procedure, a patent owner (and no one else) may submit up to twelve written documents to the PTO (per fee paid) and request that the PTO issue an opinion as to whether or not any of the documents raise a substantial new question of patentability (SNQP) about the issued patent.  Within three months the PTO will issue certificate stating its opinion whether or not an SNQP has been raised.  If an SNQP is raised, the PTO will order that the patent be subjected to ex parte reexamination to determine if any claims in the patent should be narrowed or cancelled.  The PTO fee for supplemental examination is $5140 and the ex parte reexamination fee of $16,120 must be deposited with the PTO at the time supplemental examination is requested.  However, if the PTO determines that no SNQP is raised, the ex parte reexamination fee will be refunded.  Thus, the supplemental examination procedure gives a patent owner the opportunity to get an opinion from the PTO about the relevance of any  problematic written documents that weren’t considered during prosecution of the patent.  It appears to be a cost effective way to discourage a competitor from requesting post grant review or inter partes review (discussed below) for certain written documents, or from attempting to leverage a prior art document during licensing negotiations.

 

B. Two Expensive Procedures For Challenging a Competitor’s Issued Patent

1) Inter partes Review – This procedure is a mini-trial that is conducted in the PTO by a panel of three administrative judges.  In the mini-trial, a third party (not the patent owner) can challenge the validity of a patent beginning nine months after the patent issues.  The challenge must be based on written publications submitted by the third party that demonstrate that one or more claims in the patent are invalid on either novelty or obviousness grounds.  The whole process is supposed to be completed in twelve months, but it is not a trivial process.  The PTO filing fee to initiate the process is $27,200 and the process involves trial-like discovery procedures, such as document production and depositions.  Therefore, both sides in an inter partes review will almost certainly need to be represented by attorneys specializing in patent law.  However, an inter partes review should be considerably quicker than a trial in federal court and much less expensive than a federal court trial.

2) Post-grant Review – The post-grant review process is similar to the inter partes review procedure discussed above but with two important differences.  First, the post-grant review process must be initiated within nine months after the date of the grant of a patent or of the issuance of a reissue patent.  Second, there are more grounds available for challenging the patent in the post-grant review process than in the inter partes review procedure.  Specifically, the post-grant review procedure can include at least §101, §102, §103 and §112 challenges, not just the §102 (novelty) and §103 (obviousness) grounds allowed in the inter partes review procedure.  There is a substantial PTO filing fee of $35,800 for post-grant review and the procedure is supposed to be completed in twelve months.  The post-grant review procedure will only be available for the review of patent claims having an effective filing date after March 16, 2013 (i.e. to patents subject to the first-inventor-to-file provisions of the AIA).

 

 

Major Changes to U.S. Patent Law
 
On September 8, 2011 the U.S. Senate passed H.R. 1249, thus completing congressional approval of major changes to the patent laws of the United States.  President Obama signed the bill on September 16, 2011, so the bill is now law. The changes in the new patent law are so extensive that years of litigation and uncertainty are likely to follow as the interpretation of the legislation is worked out. In any event, the U.S. has now adopted a first to file system of patenting.  This means that after the effective date of the relevant statutory provisions (March 16, 2013), the first party to file a U.S. patent application will be considered the inventor in the United States.  In filing future patent applications, the consequences of the first to file system will have to be carefully considered.  A more immediate effect of the new law is that a 15% surcharge has been applied to all fees charged by the PTO, including filing and maintenance fees.

 
 
Method Claims
 
In the recently decided case of Bilski v. Kappos (decided June 28, 2010), the United States Supreme Court rejected the notion that method claims are only patentable if they meet the machine or transformation test.  Instead, the Court ruled that the machine or transformation test is one test that can be used to evaluate the patentability of method claims, but that other considerations can also be used.  In this case, Bilski's claims were rejected as being "abstract ideas."

The case is also interesting because it addresses the general patentability of business method claims.  One judge (Justice Kennedy) clearly feels that business method claims are patentable subject matter.  Three other judges (Justices Roberts, Alito and Thomas) supported this position. However, four judges (Justices Stevens, Ginsburg, Sotomayor and Breyer) do not believe that business method claims are patentable subject matter.  A fifth judge (Justice Scalia) didn't take a position on business method claims in this case.  Considering that Justice Stevens has announced his retirement, the current score on the general patentability of business method claims is four justices (Kennedy, Roberts, Alito and Thomas) in favor of patentability, three justices (Ginsburg, Sotomayor and Breyer) oppossed to patentability, and two justices (Scalia and Stevens' replacement) with unknown positions on the patentability of business method claims.
 
 
The Written Description - Why Does Your Patent Attorney Ask For So Many Details?
 
Under a section of the patent law known as §112 (first paragraph), a patent must contain a written description of the invention that includes the manner and process of making and using the invention, and that is sufficiently clear so as to enable any person skilled in the art to make and use the invention (as of the filing date of the patent application).  The description also needs to include the best mode of the invention, but this will be the topic of a separate entry. 
In the recent case of Ariad Pharmaceuticals v. Eli Lilly & Co. (Fed. Circuit 2009), the relevant claims in the patent were found to be invalid by the court for failure to comply with §112 (first paragraph).  In this case, Ariad was trying to broadly claim a method for reducing the activity of a biological substance (a transcription factor called NF-κB) for treating certain diseases. 
The claims in the Ariad patent did not specify that a chemical substance was to be used to reduce the activity, and the written description only described certain vague classes of chemicals that might fulfill this function. Because of this, the court found that a person skilled in the art at the time the patent application was filed could not determine what the invention was based on the written description.
Now the Ariad case was a special situation where eminent scientists were trying to patent an advance at the leading edge of their field.  They didn’t describe actual chemicals that could accomplish the claimed function because they probably didn’t know the exact identity of these chemicals at the filing date.  However, the lesson for patent applicants is clear.  The written description in your patent application needs to include enough detail to satisfy §112 (first paragraph) of the patent law.  That’s one reason your patent attorney asks so many questions.
Case Update:  On June 2, 2009, Ariad et al. filed a petition requesting that the full Federal Circuit Court of Appeals decide whether the separate written description test should be abolished when evaluating patents under §112 (first paragraph), leaving the enablement test as the proper standard of evaluation.
 
 
Why It Became Harder To Get a Patent In 2007
 
A claim for an invention can be rejected by an examiner if the claim is obvious (a section 103 rejection).  This is true even though the claimed invention is new, meaning that it has never been described in the prior art.  In a 2007 case called KSR v. Teleflex, the United States Supreme Court found (actually reestablished) that when an invention comprises a combination of known elements, the examiner (or a judge) may look at a number of factors to determine if the claimed invention is an obvious combination of these prior art elements.  These factors include things such as: were there a finite number of identified, predictable solutions to meet a design need or to respond to market pressure to solve a problem (i.e. was it obvious to try the claimed combination); at the time of invention, did there exist a known problem for which there was an obvious solution encompassed by the patent’s claims; and is there any reason that a person of ordinary skill in the art would be drawn to look at the relevant elements of the prior art to solve a problem, even if it’s not the same problem the inventor was trying to solve.  If any of these factors existed, then the claim may be found to be obvious unless the factor is successfully refuted, usually by your patent attorney.  For at least ten years prior to 2007, the test used to determine when individual pieces of prior art could be combined (the TSM test) was stricter than the KSR test, so patents were easier to get before KSR.
 
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