Archive for the ‘Patent Reform’ Category

New Rules, New Strategies for Innovators

Wednesday, July 31st, 2013

coke bottle patent The past 15 years have seen an unprecedented attack on patents and patent-owners in the United States. Orchestrated by foreign nations, multinational corporations, and a variety of other groups, largely funded by similar vested interests, this attack has reduced much of the value formerly associated with patented innovations. In past issues of our newsletter we have described how patent owners can no longer realistically expect to block sales of products that infringe their patents through the injunction process, how infringers can conspire to divide patented processes among several actors to avoid infringement, how multiple infringers must now be sued separately, rather than joined in a single action, and how delays at the Patent Office and increasing fees put university researchers, solo inventors, and small companies at a disadvantage. We have also been counseling our clients to help them construct valuable patent strategies.

In the latest round of anti-patent actions, a committee of the Federal Courts including some noted judges and attorneys has issued a model order that they recommend be adopted by federal trial courts to govern patent suits. Such model orders are usually adopted quickly and without significant change by courts around the country. What is troubling about the present document, “A MODEL ORDER LIMITING EXCESS PATENT CLAIMS AND PRIOR ART” is that for the history of our patent system, which dates back to the time of Thomas Jefferson, inventors have always been able to present claims in as much detail as they wish, so that their patents would clearly and particularly cover all aspects of their inventions, and, at least since the 1950s, inventors and their attorneys have been required by both the Patent Law and the rules of the Patent Office to submit every relevant item of prior art of which they were aware. The background of the model order cites a study that shows that litigated patents contain an average of 24 claims, and cite 31 prior art references, which the committee calls, “problematically excessive.”

Some recent cases have seen individual judges impose limits on patent owners, requiring that they limit the number of patents in a suit, and that they throw away claims in the patents that they assert to reach some arbitrarily small number. In other cases, the number of products accused of infringement has been limited by court order. All of this trimming is claimed to streamline cases and to promote the administration of justice. In reality, however, such rules are evidence that our judicial system often fails to handle the technical complexity of our modern technological world. When it takes teams of hundreds of researchers years of effort to develop and commercialize complex inventions such as synthetic proteins, chips with millions of components, and software with tens of millions of lines of code, the refusal of our courts to expend the mental energy needed to understand and to protect such innovations harms innovators. For courts to say to inventors, you have done the hard work of creating value, but we require you to be able to explain it to judges and juries in monosyllabic terms, and to choose, “not more than ten claims from each patent, and not more than a total of 32 claims,” means that for some inventors, they will have a more difficult task to defend the value that they create.

Inventors must and will respond. Already, we are counseling clients to submit more patent applications with fewer claims per application. In litigation, the proposed limits will mean that separate law suits will have to be filed on small groups of patents against the same defendant. The erosion of the patent system has caused some innovators to opt for trade secrecy, at least in part, rather than patenting every aspect of their inventions, and this impoverishes our entire society, because it keeps technical advances out of the public view, which slows follow-on innovation.

We are confident that Americans will continue to innovate, despite the limits being imposed on the patent system. We are confident that we, and others who value our tradition of individual innovation will continue to find strategies to protect the value generated by inventors. Because we believe in the long-term value of innovation and the patent system that protects innovation, we at LW&H continue to develop new strategies for our clients, and particularly university researchers, garage inventors, startup companies, and established concerns to implement effective and efficient legal strategies for protecting their inventions.

— Lawrence A. Husick, Esq.

The Fable of the Supreme Court and the Beanstalk

Thursday, May 30th, 2013

Once upon a time, a farmer purchased a magic bean.  The farmer planted his magic bean, as farmers do.  The magic bean grew into a magic beanstalk and made more magic beans.  The farmer harvested the magic beans, as farmers do, and saved the new magic beans for the next year.   For eight years, the farmer planted his new magic beans, grew new magic beanstalks and harvested magic beans for re-planting.

Monsanto, which owned a patent on the magic bean, filed suit against the farmer.¬† Monsanto believed that the farmer infringed Monsanto’s patent because the farmer made copies of the magic beans, violating the prohibition on making or using a patented product.¬† Monsanto’s beans were magic because they were genetically modified to survive treatment with glyphosate herbicides.¬† Use of the genetically modified bean allowed the farmer to kill the weeds in the farmer’s fields using herbicides without damaging his crop.

The farmer believed that once Monsanto sold the magic bean, then Monsanto had no further rights to the bean. The farmer’s friends agreed.¬† The farmer argued the doctrine of ‘patent exhaustion,’¬† which means that once a patent owner sells a patented product, the purchaser and any subsequent purchasers can use or sell the product and the patent owner has no further rights to control the patented product.¬† In this case, the genetically modified soybeans were twice-removed from Monsanto – Monsanto sold the patented soybeans to farmers, the farmers planted the beans, raised crops and sold their crops to a grain elevator, and the grain elevator sold soybeans from the crops to Vernon Bowman, the farmer of our fable.

The case of the magic bean went all the way to the Supreme Court.¬† On May 13, 2013 a unanimous Court ruled in favor of Monsanto.¬†¬† The Court concluded that the doctrine of ‘patent exhaustion’ applies only to a particular patented article sold, in this case each genetically-modified soybean sold by Monsanto.¬† The doctrine allows the farmer to plant or eat soybeans purchased from Monsanto, to grow a crop and to sell the crop.¬† For soybeans that had the genetic trait and that Mr. Bowman purchased from the grain elevator, Mr. Bowman could re-sell those soybeans, feed the soybeans to animals or eat the soybeans.¬†¬† However, ‘patent exhaustion’ did not allow Mr. Bowman to make copies of the patented soybeans.¬† Otherwise, a patent for a seed could never be of any value.¬† The patent owner could sell the first seed, which would then be copied by infringers, using the self-replicating nature of the seed.¬† The Court expressly limited the ruling to the facts of the case, recognizing that other situations may arise with other self-replicating inventions, such as computer programs, that might require a different result.

The facts were favorable to Monsanto – Mr. Bowman acted to isolate and duplicate the patented Roundup Ready¬ģ soybeans and to take advantage of the herbicide-resistant genetic trait.¬† He treated his fields with glyphosate herbicide, ensuring that only soybean plants with the Monsanto-owned trait survived.¬† He also was familiar with the Roundup Ready¬ģ beans and used Monsanto-supplied beans for some of his needs.

The Monsanto patents address DNA having specific characteristics and seed and plants containing that DNA.¬† The Monsanto genetic modification now has been part of the environment for years and eventually will find its way as a contaminant into many, if not all, soybean crops.¬† The Court was silent on an issue raised in friend-of-the-court briefs; namely, what happens when an organic farmer who does not use herbicides saves seed contaminated with the Monsanto genetic modification.¬† Isn’t the organic farmer infringing Monsanto’s patent?¬† In a related question, how can any farmer ever grow any soybeans without being forced to buy Monsanto’s seed due to unintentional genetic contamination?¬† Those questions currently are in the courts in Organic Seed Growers & Trade Association v Monsanto.

To Disclose or Not to Disclose … That is the Question

Tuesday, April 30th, 2013

You have conceived of a wonderful new invention and you want tell everyone, but you are not ready for the expense of a patent application.  Should you open your mouth?

Every inventor feels the tension between the need to maintain secrecy and the need to  disclose the invention.  If you are a regular reader of this newsletter, then you are aware that your sale or offer of sale, public use, or written or verbal disclosure in public can terminate your patent rights forever, with some actions such as public use or sale terminating your rights immediately.  But to develop your invention, you cannot avoid having to disclose.  You have to present written proposals. You have to demonstrate the invention.   You have to consult with others Рdesigners, engineers, manufacturers, business consultants, lawyers, investors and lenders.  How do you talk to other people about your invention, including demonstrating your invention, without losing your patent rights?

You have two options: (a) bite the bullet and file a patent application, or (b) have the persons with whom you are consulting sign non-disclosure agreements.¬† A non-disclosure agreement is a written contract between you and the person to whom you disclose the invention.¬† In return for receiving information about your invention, the other person agrees to keep the information in confidence.¬† After signing, the other person is no longer a member of the public and owes you a duty of secrecy.¬† If you demonstrate the invention to that person, you are not using the invention ‘in public’ and do not immediately lose your patent rights.¬† If you disclose the invention to that person in writing, then your written description is not a ‘publication’ and so does not trigger the patent right termination deadlines.¬† If you describe the invention verbally to that person, then your verbal description does not make the invention ‘otherwise available to the public’ to trigger the running of the time to terminate your patent rights.

The other major advantage of a non-disclosure agreement is that it is immediately enforceable.  If the person who signed the non-disclosure agreement copies your product, you can file suit in court immediately. You do not have to wait the three years or so that it will take for your patent to issue.

There are weaknesses to non-disclosure agreements.  Beware selling or offering the invention for sale. Even if a person signs a non-disclosure agreement, offering to sell the invention to that person likely will terminate your U.S. patent rights instantly and forever.

There is also the problem of who signs the non-disclosure agreement.¬† If the other person is a corporation, the person signing the non-disclosure agreement on behalf of the corporation must have authority to sign, or at least ‘apparent authority.’¬† The company CEO has ‘apparent authority.’¬† The CEO’s secretary does not have ‘apparent authority.’¬† Without actual or apparent authority on the part of the person signing, the nondisclosure agreement will not protect you.¬† Demonstration of the invention likely will immediately terminate your patent rights.

There is also the problem of proving that your non-disclosure agreement applies to a particular disclosure.¬† If, for example, one of the corporation’s employees violates company policy and posts on his Facebook page: “I saw the coolest invention today” along with video of your invention, then it will very difficult to show that a similar invention in, say, a video from Kazakhstan was derived from your disclosure.¬† That Kazakh video likely will be prior art for your subsequent patent application and may prevent you from obtaining a patent.

Bottom line:  The safest approach is to file a patent application prior to disclosing the invention and certainly prior to demonstrating the invention or selling the product, coupled with non-disclosure agreements with the persons to whom you disclose.  You then have the best of both worlds Рyou avoid loss of patent rights because your patent application is already filed and you enjoy the ability to immediately enforce the non-disclosure agreement without waiting for that patent to issue.  We can help you with both your patent application and the non-disclosure agreements.

— Robert Yarbrough, Esq.

The Statutory Invention Registration (SIR) is No More

Tuesday, April 30th, 2013

USPTO Seal As of March 16, 2013 the PTO stopped accepting or reviewing applications for SIRs.  Before March 16, the SIR was a technique to notify the world of an invention that the invention owner did not wish to patent.  The effect of the SIR was to dedicate the invention to the public so that anyone could make, use and sell the invention and no one could file a new patent application for it.   SIRs became largely redundant when the U.S. moved to the system of publishing utility patent applications eighteen months after filing.

— Robert Yarbrough, Esq.

Changing of the Guard at the PTO

Friday, November 30th, 2012

David J. Kappos has announced that he will depart as the Director of the U.S. Patent and Trademark Office at the end of January.¬† His replacement has not been announced.¬†¬† Kappos has led the PTO since 2009 and filled a leadership vacuum at the PTO dating from the last few years of the last administration.¬† He previously ran the patent department at IBM, which receives more patents than any other entity.¬† Kappos has been more effective than many of his predecessors because, in this author’s opinion, he actually knows about patents and believes in the patent system.¬† He holds a special place in our affection because he was willing to actually issue patents and because he removed some of the structural incentives put in place by his predecessors inducing examiners to deny patent applications, no matter how deserving the application.¬† His record is mixed, however, because of his support of the anti-inventor ‘America Invents Act.’

Hopefully the administration will appoint a replacement who also knows about patents and believes in the patent system.

— Robert Yarbrough, Esq.

Beware the Ides of March (well, almost the Ides)

Friday, November 30th, 2012

caesar We’ve said it before, but it bears repeating.¬† Remember that on or after March 17, 2013, you MUST protect your invention before offering the invention for sale or using the invention in public.¬† Otherwise, you lose your U.S. patent rights instantly and forever.¬† This is a major change in the law and requires an entirely new level of paranoia on the part of inventors and the companies that employ them.¬† How can you protect yourself and your company?

On or after March 17, 2013:

(1) Do not offer the invention or a product including the invention for sale until you file a patent application.

(2) Do not use the invention in public until you file a patent application.

(3) Do not disclose the invention to someone else unless you have filed a patent application or unless that person has signed a non-disclosure agreement.  Disclosure of the invention by you does not immediately terminate your U.S. patent rights, but does immediately terminate foreign patent rights in most circumstances.

PLEASE keep that above in mind and do not forfeit your rights by mistake.  For more information, follow this link.

— Robert Yarbrough

My Competitor is Telling the PTO to Deny My Patent Application! What Can I do?

Friday, September 28th, 2012

heavy workload

Thanks to the America Invents Act, you’ll have to live with it, if your competitor submits the information on time and meets other requirements.¬† As of September 16, 2012, persons who are not the patent applicant can file papers and make arguments to the patent examiner as to why someone else’s patent application should be denied.

The hope is that the participation of third parties in the patent process will result in better quality prior art coming to the attention of examiners and ultimately better quality patents.

Why would third party argument and prior art make the system better?

One of the dirty little secrets of the Patent and Trademark Office (“PTO”) is that its examiners are given relatively little time to examine patent applications.¬† Typically, the PTO allows an examiner between 14 to 30 hours (with an average of 22 hours) to examine each patent application depending on the complexity of the technology and the skill level of the examiner. In those few hours, the examiner must read the application, search for any prior art relevant to the invention, analyze the patentability of the invention, prepare a response to the applicant, and, finally, dispose of the application. Examiners and are under constant pressure to produce and are under constant review to ensure that they meet their production quotas.

Patent quality is hampered not only by a lack of time but also by the adequacy (or lack thereof) of the prior art databases available to the examiners. Especially in art areas where there is significant inventive activity (electronics and software for example), the ability to keep up with and search all publications becomes a daunting task. As a consequence, some poor-quality patents are issued for non-inventions.

To encourage interested persons to locate and report prior art to the patent examiners, the PTO has endorsed a website known as Ask Patents where persons concerned about a patent application can tap into crowd sourcing for prior art. Here is an example of an Ask Patents discussion. The public will be able to use patent resources (such as Google Patent Search) to find applications in which they are interested and to submit what they believe to be prior art relevant to that patent. The site will allow participants to vote on the relative merits of the prior art, and the ten best citations will be forwarded to the PTO.

So what do you do if you are worried about an attack by your competitor on your patent application?

For your competitor to present prior art and make arguments to the PTO, the competitor must first know about your patent application.  Your competitor usually will learn about your application in either of two ways (1) you notify your competitor or (2) your patent application is published by the PTO and your competitor finds the publication.  Patent applications are published 18 months after the first application is filed, unless the applicant specifically requests that the application NOT be published.  The only reason to allow publication is if you intend to seek protection in other countries.  If you will not seek foreign patent protection, then the risk of third party argument and prior art is a good reason to ask that your patent application NOT be published.

— Robert Yarbrough, Esq. and Laurence Weinberger, Esq.

‘Justice Delayed is Justice Denied’*

Wednesday, February 29th, 2012

GladstoneUnless the courts quickly resolve disputes, there is no justice.  As former Chief Justice Warren E. Burger said:

“A sense of confidence in the courts is essential to maintain the fabric of ordered liberty for a free people and three things could destroy that confidence and do incalculable damage to society: that people come to believe that inefficiency and delay will drain even a just judgment of its value; that people who have long been exploited in the smaller transactions of daily life come to believe that courts cannot vindicate their legal rights from fraud and over-reaching; that people come to believe the law – in the larger sense – cannot fulfill its primary function to protect them and their families in their homes, at their work, and on the public streets.”

The Board of Patent Appeals and Interferences (‘BPAI’) is denying justice to patent applicants.¬† The BPAI is charged with deciding appeals by patent applicants from the rejection of patent claims by the PTO.¬† The BPAI¬†backlog¬†has gone from 1000 cases in 2006, to 4000 in 2008, to 18,000 in 2010.¬† In early 2012 there are now 26,000¬†pending appealsof patent claim rejections.¬† Appeals currently being decided by the BPAI have been pending for about three years.¬† The BPAI gets further behind every day.

The effect of the increasing delay at the BPAI is to discourage patent applicants from filing appeals and to shift power to patent examiners.  If an applicant cannot obtain speedy redress, then the applicant will not appeal and patent examiners are free to make arbitrary, wrong decisions.   Of interest, when the BPAI rules, it reverses the examiner in about one case in three.

Hopefully, help is in sight. The PTO is attempting to address the BPAI backlog by doubling the number of patent judges at the BPAI.  The Department of Commerce is undertaking an audit of BPAI operations to identify ways to speed appeals.  Even with the efforts of the PTO and Department of Commerce, we can expect the BPAI backlog to linger for years.

Other changes at the BPAI include its disappearance, since it will soon be replaced by the Patent Trial and Appeal Board under section 6 of the America Invents Act.  The BPAI also has newprocedural rules.

*attributed to William E. Gladstone, 19th century British politician, whose photo appears here.

— Robert Yarbrough, Esq.

‘Best Mode’ Under the America Invents Act

Wednesday, November 30th, 2011

‘Best mode’ is the requirement that a patent applicant disclose the best way that the applicant knows to practice an invention.¬† The purpose of the ‘best mode’ requirement is to fulfill the public disclosure goals of the patent system by preventing a patent applicant from obtaining a patent while at the same time keeping the best parts of the invention secret.

The ‘best mode’ requirement is present both under the America Invents Act, signed into law on September 16, 2011, and under prior law.¬† Section 15 of the Act changed the law so that failure by the patent applicant to disclose ‘best mode’ is no longer a reason to declare a patent invalid or unenforceable.¬† This provision is effective immediately and removes ‘best mode’ as an issue in infringement and invalidity litigation.¬† The change will make litigation a little shorter and a little less expensive.

Is the best mode requirement now completely toothless?¬† Not quite, according to someone who took part in the discussions at the time.¬† ‘Best mode’ is still a requirement of Federal law and failure to disclose best mode potentially subjects the applicant to criminal penalties and patent attorneys to disbarment, just like it did before the Act.¬† Do we expect Federal prosecutors to drop their cases against bank robbers, terrorists and counterfeiters to pursue less-than-completely-forthcoming inventors?¬† Not likely.

Why is this change important for patent applicants?¬† The chances of being called out on a ‘best mode’ question just went from pretty good to very low.¬† While we would never advise a client to provide anything other than ‘best mode’ (it’s a requirement of Federal law, after all), the applicant may wish to be more aggressive in determining what is or is not ‘best mode’ and hence must be disclosed in a patent application.

— Robert Yarbrough, Esq.

America Invents Act, Part 2: ‘Prior Art’

Monday, October 31st, 2011

This is the second of our newsletters to discuss the ‘America Invents Act,’ which was signed into law on September 16, 2011.¬† The Act moves the US patent system away from ‘first to invent’ and to ‘first to file.’¬† So what does ‘first to file’ mean for an inventor or invention-owning business?

The most important practical difference is in the ‘prior art’ that will be cited against your patent or application by the patent examiner or by a court.¬†¬† The changes to section 102 of the patent law discussed below will apply to any patent application filed on or after March 17, 2013.

What is ‘prior art?’¬† An invention must be both ‘novel’ and ‘unobvious’ to qualify for a patent.¬† To determine whether an invention is novel and unobvious, the PTO and the courts will compare the invention to the prior art.¬† The term ‘prior art’ generally refers to things that people have created and that become available to the public, such as patents, published patent applications, treatises, articles, advertisements, web sites, designs, products and the like.¬† For most inventions, the term ‘prior art’ means issued patents and published patent applications.

About one half million patent applications are filed in the U.S. every year, not to mention all the patent filings in other countries around the world.¬† That’s an additional one half million patent applications EACH YEAR that can be ‘prior art’ and potentially may render your invention not ‘novel’ or ‘obvious.’

Bottom Line:¬† Under pre-March 17, 2013 law, the date that prior art is effective is determined by the date that you invented your invention (‘first to invent’).¬† After March 17, 2013, the date that prior art is effective is determined by the date that you filed your patent application (‘first to file’).¬† Since you invented your invention before you filed your patent application, there will be more prior art to cite against your application after March 13, 2013 than before that date.¬† In general and all other things being equal, you will have a better chance of getting and keeping a patent if you file your application before March 17, 2013.

That’s the short form.¬† If you are eager for more, read on.

Nuts and Bolts: For patent applications filed on or after March 17, 2013, the following are ‘prior art:’

1. Publications (including issued patents and published applications) are prior art if they were PUBLISHED before you filed your patent application.¬†¬† BUT, you are protected from the publication if the publication occurs within one year of your filing date AND the disclosure came from you (it’s your application that is published), or someone took the information from you, or you publicly disclose the invention prior to the date of publication.

2.  A United States patent application effectively FILED before your filing date becomes prior art when it is eventually published or issued as a patent. BUT, you are protected from the prior filing of the patent application if the disclosure is yours (your patent application) or the information was taken from you, or if the two patent applications are under common ownership or obligation to assign at the time that the second application is filed.

Examples:¬† As in all things patent, it’s complicated, so consider some examples:

1.  You file a first patent application on March 17, 2013.  You have a second invention that is a follow up to the first.  What is the latest date that you can file a second patent application without your first patent application becoming prior art to the second application?   Answer:  Up to one year after the first application is either published or issued as a patent, whichever happens first.  Publication generally will occur eighteen months after your first U.S. filing, so you have a total of up to two and one half years after filing application number 1 to file application number 2.   Note that you are not protected from intervening applications or disclosures by other people.

2. You file a patent application on March 17, 2013.  The examiner cites a technical treatise published on March 16, 2013.  Is the treatise prior art to your application?  Answer:  Yes, it is.  You will be able to overcome the treatise if you can show that the information came from you (you wrote the treatise) or was derived from you (someone wrote about your research) or that you publicly disclosed the invention less than one year before the filing date.

3. You file a patent application on March 17, 2013.¬† The examiner cites a U.S. patent application filed by your competitor on March 16, 2013 and published after your filing date.¬†¬† Is the competitor’s application prior art to your invention?¬† Answer:¬†¬† Yes, unless you can show that the list of inventors is the same, or that the competitor derived the invention from you, or that you publicly disclosed the invention prior to your competitor’s filing date, or that both applications are under common ownership at the time of the second filing date or were the subject of a joint research agreement.

4. You file a patent application on March 17, 2013.¬† The examiner cites a European patent application filed March 16, 2013 and published long after your filing date, but that was never filed as a U.S. patent application.¬† Is the European patent application prior art to your application?¬† Answer:¬† No, it is not.¬† ‘First to file’ only applies to applications that are eventually filed in the U.S, even if the application started out life in another country.

5.¬† You file a patent application on March 17, 2013.¬† The examiner cites a European patent application that was published on March 16, 2013.¬† Is the European application ‘prior art’ to your U.S. application?¬† Answer:¬† Yes, unless you can show that the information is yours (you filed the European application), or the information was taken from you, or that you publicly disclosed the information less than one year prior to your filing date.

Conclusion:  Both before and after March 13, 2013, the sooner that you can file your patent application, the better.   After March 13, 2013 other reasons to file as soon as possible go into effect, such as less prior art to cite against your invention and avoiding a patent bar.

— Robert Yarbrough, Esq.