Prosecution Primer Talk 2015_May

PATENTS IN THE U.S.A.: PRACTICAL CONSIDERATIONS

DISCLAIMER: THIS PRESENTATION HAS BEEN PREPARED FOR GENERAL INFORMATION PURPOSES ONLY TO PERMIT YOU TO LEARN MORE ABOUT OUR FIRM, OUR SERVICES AND THE EXPERIENCE OF OUR ATTORNEYS. THE INFORMATION PRESENTED IS NOT LEGAL ADVICE, IS NOT TO BE ACTED ON AS SUCH, MAY NOT BE CURRENT AND IS SUBJECT TO CHANGE WITHOUT NOTICE.

Jonathan M. Blanchard, Ph.D.W. John Keyes, Ph.D. © 2015 Blanchard & Associates, Chicago

PCT National Stage vs. “Bypass” Traditional PCT route for entering U.S. national

stage: completing the requirements for entry into the national stage under 35 U.S.C. § 371(c), including:

Oath or declaration of the inventor. It may be sometimes difficult to procure by the filing deadline. For applications filed after September 16, 2012, the national filing date is no longer the date the oath or declaration is received – it is when the filing fee is paid and the English translation is filed.

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PCT National Stage vs. “Bypass”

Copy of the PCT application or literal translation. No revisions or additions allowed.

PCT applications entering the national stage must include a copy of the application or a “correct”, i.e. exact and literal translation.

See PCT Article 46, 35 U.S.C. 375(b) and MPEP § 1893.01

35 U.S.C. § 371(d): The applicant may present amendments to the specification, claims, and drawings of the application after the national stage has commenced.

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Amendments

Amendments, for example to remove impermissible multiple dependent claims, may be presented in the form of a Preliminary Amendment filed together with the required nationalization filings.

However, the application is usually published without the amended claims from the Prel. Amd.

This may lead to substantial financial losses due to diminished provisional rights.

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Claims and New Matter

Sometimes, it is not clear which claims are pending due to amendments made in the course of the international phase (PCT Article 19 amendments before the international bureau).

Claims may require amendments to conform to US laws and regulations, e.g. multiple dependencies must be removed.

No new matter allowed, so no “continuation-in-part” applications.

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Restriction

Nationalized PCT application claims are restricted according to the “unity of invention standard”.

This usually results in fewer independent claims making it past restriction.

US examiners are usually not very familiar with the “unity of invention” standard and may erroneously issue rejections according to US restriction practice.

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Advantages of “Bypass” Approach

It is possible to file a U.S. national application under 35 U.S.C. § 111(a) without completing the requirements for entering the national stage under 35 U.S.C. 371(c), i.e. as a continuation, divisional, or continuation of a PCT application designating the U.S.

See 35 U.S.C. §§ 363, 365(c), and 120.Discussed in MPEP §§ 1895, 1896.

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Originally used in instances where there was difficulty in obtaining a signed oath or declaration by the expiration of the time for entry into the national stage. Because these continuation applications historically resulted from a need to bypass the requirements of 35 U.S.C. 371 , they became known as “bypass” applications.

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In a bypass application, the amended claims may be incorporated in the body of the application, as opposed to via a Preliminary Amendment.

As such, they will be published, eliminating the problem of lost provisional rights.

Remarks may also be submitted to address any new matter questions.

Addition of new matter allowed (CIP), see MPEP 1895.

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Bypass applications are subject to US-type claim restriction practice, which is based on claims being “independent and distinct”.

On average, fewer claims are restricted out than when the PCT “unity of invention” standard is applied.

US examiners are more familiar with the standard.

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Preliminary Amendment – Use It!

The filing fee covers 20 claims (3 independent claims). Each independent claim in excess of 3 - $420.00. Each claim in excess of 20 - $80.00. What if you need, for instance, 40 claims, 6 of which independent,

to fully claim all aspects of the invention?(a)File a first application with a first set of 20 claims.(b)File a continuation of the first application featuring the claims that

were left out of the first application.Problem: The claims in the continuation application may be

challenged as lacking sufficient support in the parent application.

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However:An amendment canceling claims accompanying the papers

constituting the application will be effective to diminish the number of claims to be considered in calculating the filing fees to be paid. A preliminary amendment filed concurrently with a response to a Notice To File Missing Parts of Application that required the fees set forth in 37 CFR 1.16, which preliminary amendment cancels or adds claims, will be taken into account in determining the appropriate fees due in response to the Notice To File Missing Parts of Application.

See MPEP § 607 (III).

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Alternative Strategy:File the application with all 40 claims, but no filing fee.The USPTO will issue a Notice To File Missing Parts.Together with the filing fee, submit a Preliminary Amendment

cancelling 20 of the claims. As per MPEP § 607 (III), you will only be charged for the 20 remaining claims.

If you later decide to file a continuation application featuring the claims that were cancelled with the Preliminary Amendment, such claims will be supported in the application as originally filed.

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US Restriction-Election Practice

37 C.F.R. § 1.142(a)If two or more independent and distinct inventions are claimed in a

single application, the examiner in an Office action will require the applicant in the reply to that action to elect an invention to which the claims will be restricted, this official action being called a requirement for restriction (also known as a requirement for division). Such requirement will normally be made before any action on the merits; however, it may be made at any time before final action.

(b)Claims to the invention or inventions not elected, if not canceled, are nevertheless withdrawn from further consideration by the examiner by the election, subject however to reinstatement in the event the requirement for restriction is withdrawn or overruled.

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Typically, the Restriction Requirements will have at least two set of claims that the Examiner contends are independent and distinct inventions, e.g. product and process, and that there would be a serious burden on the Examiner if the restriction were not made.

The applicant MUST elect one of the sets of claims. Non-elected sets may be pursued in “divisional” applications.

An applicant may choose to “traverse”, i.e. challenge, or “not traverse” the rejection.

Traversing a restriction requirement is usually not successful –dividing a case into two or more applications is a source of revenue for the USPTO. An Examiner’s refusal cannot be appealed –only petitioned.

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Reasons not to traverse: Arguments brought against the traversal may generate

prosecution “estoppel” that may limit the scope and strength of a granted patent, especially if they amount to an admission that the claimed inventions are obvious over each other.

Claims left out by the Restriction Requirement may be pursued in a “divisional application” with safe harbor.

“[A]n application filed as a result of such a requirement, shall not be used as a reference either in the Patent and Trademark Office or in the courts against a divisional application” in a double patenting rejection.

See 35 U.S.C. § 121, MPEP § 804.

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Restriction ≠ Election of Species

Unfortunately, Election of Species and Restriction Requirement are oftentimes confused by examiners and attorneys alike.

An election of species contends that there are different species of the same invention, e.g. a propeller-driven, turbo-prop, or jet aircraft. A claim is not a species; a claim may encompass two or more patentably indistinct species (generic or genus claim).

See MPEP 806.04(e). The Examiner is seeking to limit the scope of work to be done

during examination. Once the elected species is found allowable, the examiner will examine the claims directed to non-elected species.

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Examiners tend to confuse an Election of Species with a Restriction Requirement, thereby trying to restrict out claims directed to species that are not patentably distinct from the elected species.

Call up the Examiner: “You are attempting to restrict between species that are not patentably distinct from each other, that is, you are trying to split apart species belonging to the same genus. This will compel us to file a new claim that is generic to all species of the genus”.

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Example:Claim 1. A method of preventing fuel tank depletion, comprising:

measuring a fuel level in a fuel tank to determine a fuel level reading,comparing the fuel level reading to a threshold,if the fuel level reading is below the threshold, then displaying a warning.

Claim 2. The method of claim 1, where the warning is displayed on an automobile dashboard.

Claim 3. The method of claim 1, where the warning is displayed in an aircraft cockpit.

The Examiner requires restriction between “car” and “aircraft”, not understanding that this should be framed as an election.

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Solution:Claim 1. A method of preventing fuel tank depletion, comprising:

measuring a fuel level in a fuel tank of a engine-powered means of transportation, to determine a fuel level reading,comparing the fuel level reading to a threshold,if the fuel level reading is below the threshold, then displaying a warning.

Claim 2. The method of claim 1, where the means of transportation is an automobile.

Claim 3. The method of claim 1, where the means of transportation is an aircraft.

The “automobile” and “aircraft” warning are now part of the same genus, thereby forestalling an unwarranted restriction of the claims.

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Patent Eligibility Analysis Recent Supreme Court rulings have broadened and deepened the impact of

35 U.S.C. § 101, heightening the prominence of patent eligibility, as opposed to patentability, as a threshold question in patent prosecution and litigation.

Patent eligibility is now determined according to a two-part test:(1) Determine whether the claims at issue are directed to one of those “patent-

ineligible concepts”: laws of nature, natural phenomena, abstract ideas.(2) If the claims are directed to one of those patent-ineligible concepts, are

there “additional elements”? Is there an “inventive concept” that ensures that the patent in practice amounts to “significantly more” than a patent pre-empting the ineligible concept itself?

Mayo Collaborative Services v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012).Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2360 (2014).

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Test as currently implemented by the USPTO

“Abstract idea” a threshold patent eligibility issue for business method and software patents and applications.

Problem: Supreme Court not very clear on what constitutes an “abstract idea”.

What “significantly more” is considered sufficient to avoid pre-emption of the “abstract idea” is not very clear either.

Subsequent court rulings provide illustrative examples.

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Patent Eligibility Analysis Ultramercial, Inc. v. Hulu, LLC, No. 2010-1544 (Fed. Cir. Nov. 14, 2014) Under the patented process, a consumer receives a copyrighted product at

no cost in exchange for viewing an advertisement. The advertiser pays for the media and the user selects an advertisement to view.

First step of patent-eligibility analysis: abstract idea?According to the Court, the process of receiving copyrighted media, selecting

ads, offering media in exchange for watching ads, and establishing a payment scheme, describes an abstract idea “devoid of a concrete or tangible application”.

The Court did not explain how it established that the claims embody an abstract idea. Instead, the Court simply reiterated its conclusion that the patent was directed to the abstract idea of “using advertising as an exchange of currency”.

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Patent Eligibility Analysis Second step of patent eligibility analysis: The Court found the inclusion of updating activity logs, permitting users to

select advertisements, using of the Internet, and restricting user access are no more than routine, conventional “data-gathering” and “pre-solution” activities ineligible for patent protection. which are “insufficient to transform the patent-ineligible subject matter into patent-eligible subject matter. That some of the eleven steps were not previously employed in this art is not enough—standing alone—to confer patent eligibility upon the claims at issue”.

The Court did not explain how “not previously employed”, that is, novel features can fairly constitute a “routine, conventional” activity. Arguably, Ultramercial stands for the proposition that what constitutes a “routine” or “conventional” practice under § 101 is a distinct inquiry from the novelty and nonobviousness questions.

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Patent Eligibility Analysis DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014)The Court characterized the invention as follows:[The system] instructs an Internet web server of an “outsource provider” to

construct and serve to the visitor a new, hybrid web page that merges content associated with the products of the third-party merchant with the stored “visually perceptible elements” from the identified host website:

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Patent Eligibility Analysis The Court ruled that the claims are patent eligible because “they do not merely recite the performance of

some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks”.

The Court distinguished Ultramercial the claims here “specify how interactions with the Internet are manipulated to yield the desired result—a result that overrides the routine and conventional sequence of events ordinarily triggered by the click of a hyperlink.”

In sum: patent eligibility of “pure” software or internet applications, without a “machine or transformation”, is still a viable option in certain circumstances.

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Patent Eligibility Analysis Example: Intellectual Ventures I v. Symantec (D.Del. 2013). Intellectual Ventures, a “mega-troll”, sued a number of software companies on U.S. Patent Nos. 6,460,050 (the "'050 patent"), 6,073,142

(the '"142 patent"), and 5,987,610 (the '"610 patent"). At trial, the jury awarded $17 million to Intellectual Ventures. Defendant argued in a post-trial motion that the claims failed to meet the patent-eligibility test and "purport to extend their abstract ideas

to the world of electronic communications by invoking generic computer software, hardware and networking concepts“.’50 patent: claims 9, 16, and 22 are independent.9. A method for identifying characteristics of data files…16.A method of filtering an email message…22. A method of providing a service on the Internet…

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Patent Eligibility Analysis The Court ruled as follows: Step 1: “the claims of ‘050 are directed to an abstract idea of receiving identifying information, comparing it to other information, and outputting

an indication based on the identifying information”.Step 2: The claims simply append conventional steps, specified at a high level of generality, which is not enough to supply an “inventive concept”.

‘142 patent: claims 1, 17, 21, 22, 24, and 26 are independent.1. A post office for receiving and redistributing e-mail messages on a computer network…17. A process for controlling the delivery of e-mail message in a business…21. A process for deferring the delivery of selected e-mail messages…22. A computer implemented process for reviewing an e-mail message…

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Patent Eligibility Analysis29

24. A post office for receiving and redistributing data objects on a computer network…26. A process for deferring the delivery of selected data objects…Step 1: “The Court concludes that the asserted claims of the '142 patent are directed to human-practicable [abstract idea] concepts, which could be implemented in, for example, a brick-and-mortar post office”.Step 2: “Intellectual Ventures does not, and cannot, point to any specific machine used to implement any of the asserted claims”. “[T]he claims of the '142 patent are in essence directed to generic computer implementation of an abstract idea, which does not make the abstract idea patent eligible”. They are not necessarily rooted in computer technology.


‘610 Patent: claim 1 the only independent claim:1. A virus screening method comprising the steps of:routing a call between a calling party and a called party of a

telephone network;receiving, within the telephone network, computer data from a firstparty selected from the group consisting of the calling party and the

called party;detecting, within the telephone network, a virus in the computerdata; andin response to detecting the virus, inhibiting communication of at

least a portion of the computer data from the telephone network toa second party selected from the group consisting of the callingparty and the called party.


The Court found that “The '610 patent is not directed to screening generic "data" or"information." Instead, the asserted claim specifically recites a computer virus, which has computer-centric implications that cannot be abstracted away so broadly. Furthermore, the human mind cannot perform the steps described in the specification for implementing virus screening functionality in a telephone network.

Citing DDR Holdings, the Court further stated that “[t]he coordination between a virus detecting computer, a sending computer, and a receiving computer is something "necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks."

In other words, the claimed subject matter is not an abstract idea similar to real-life screenings such as “observing individuals for signs of intoxication, reading wartime correspondence, or asking someone if she is having an emergency”.

Patent Eligibility Analysis Also, the Court of Appeal of the Federal Circuit- is not bound to explain how it reaches its conclusions on patentability,

unless one manages to obtain review by the Supreme Court. However, USPTO patent examiners cannot get away with a patent eligibility determination based on conclusory

statements! Allegations of non-statutory subject matter must be backed with evidence.Example: U.S. Appl. No. 13/076,216:The Examiner made the general allegation that “the claims, as a whole are directed toward the concept of operating a data

collection and analysis system, which is considered a fundamental economic practice and is simply a series of data gathering or collecting, mathematical formulation and oparation; therefore the claims are drawn to an abstract idea. […] It should be noted that the limitations of the current claims are performed by the generically recited computer .

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Patent Eligibility Analysis The Applicants replied by attacking the lack of evidentiary support backing the Examiner’s statements:“[…] the Examiner has provided no support in making this allegation and thus fails to establish a prima facie case that the

claim is for an abstract idea. It appears that all the Examiner did was to take the language of the preamble, call it an abstract idea (with no evidentiary proof), and ignore the specific claims that the Examiner has found to be novel over the prior art”.

“No evidentiary support has been provided for the conclusory statement made by the Examiner that the […] claimed process is a fundamental economic practice”.

“Applicants cannot imagine how this specific, detailed process [of the claims], undertaken by several computers interoperating over a computer network can be characterized as a mere “data collection and analysis system” and thus a fundamental economic practice”.

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Patent Eligibility Analysis The Applicants also explained how the claims pass muster under part two of the Alice test:“the claims provide an inventive concept since they have been found to be allowable [by the Examiner] under

sections 102 [novelty] and 103 [obviousness]”.

“the claims do not wholly pre-empt the field of data collection and analysis due to numerous non-infringing alternatives that are significant and substantial”.

The application was allowed on December 3, 2014.

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Post-grant proceedings before the Patent Trial and Appeal Board (PTAB)

Thousands of claims invalidated in the last two-and-a-half-years!

What happened? No more inter partes reexaminations. Instead, new post-issuance, adversarial administrative (as

opposed to legal) proceedings for challenging patents before the USPTO. Introduced by the “America Invents Act”.

Not cheap –just the filing fees in the neighborhood of $30,000- but much cheaper and faster than litigation.

Million-dollar scale litigation before a court of law no longer necessary to invalidate a low-quality patent.

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Types of post-grant proceedings

Covered Business Method (CBM) Review(a)Available until September 15, 2020. (b)Allows validity challenges on any ground that is a condition for

patentability –including recently strengthened patent eligibility requirements under § 101 (see Alice Corp. v. CLS Bank Intl.)

(c) A petitioner may not file with the Office a petition to institute a CBM patent review of the patent unless the petitioner, the petitioner's real party-in-interest, or a privy of the petitioner has been sued for infringement of the patent or has been charged with infringement under that patent.

(d)Must be completed within 12 months from institution, with 6 months good cause exception possible.

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Types of post-grant proceedings Definition of a “covered business method patent”:(a) Covered business method patent means a patent that claims a method or

corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.

(b) Technological invention. In determining whether a patent is for a technological invention solely for purposes of the Transitional Program for Covered Business Methods (section 42.301(a)), the following will be considered on a case-by-case basis: whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.

See 37 CFR § 42.301.

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Types of post-grant proceedings Estoppel created in a CBM: “Grounds that were raised (or that reasonably

could have been raised) for any claim that results in a final written decision are no longer available” to the petitioner, i.e., the party challenging the patent (or real party-in-interest; privy).

USPTO: Cannot challenge the patent on any ground that was raised or reasonably could have been raised in the CBM proceeding. More expansive than issue estoppel as traditionally applied.

“Reasonably could have been raised” construed as “prior art which a skilled searcher conducting a diligent search would reasonably [] have been expected to discover”. A scorched-earth search reviewing all the prior art in the world is not required.

ITC or District Court: Cannot challenge the patent on any ground that was actually raised in the CBM proceeding –less strict than estoppel applied to proceedings before the USPTO.

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Post Grant Review (PGR) Available immediately and until 9 months after patent grant or reissue. Available for covered business method patents irrespective of their priority

date. For technologies other than covered business methods, post-grant review is

only available for patents with a priority date later than March 15, 2013. Must be filed within nine months of a patent’s issuance (or reissuance). Must be

filed before seeking a declaratory judgment challenging the validity of a claim. Can be sought on any statutory grounds of invalidity under 35 U.S.C. § 282:

patents, printed publications, public use, on-sale activities, written description, enablement, patent eligibility, statutory double patenting.

Must be completed within 12 months from institution, with 6 months good cause exception possible.

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PGR: Limited discovery is allowed, although not to the extent typical of district court patent litigation.

Estoppel created by post-grant review applies to all USPTO proceedings, ITC proceedings, and district court litigations.

Estoppel standard: Cannot challenge the patent on any ground that was raised or reasonably could have been raised in the PGR proceeding.

In short, PGR estoppel applies to all grounds in all subsequent USPTO proceedings and district court litigations.

WARNING: Make sure that the PGR sets forth the very best grounds of invalidity –if it fails, you will not be allowed to raise in court any statutory grounds of invalidity that you raised or reasonably could have raised in the PGR, art-based or otherwise.

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Types of post-grant proceedings Problem: Limit of 80 pages for PGR petition. Problem: The USPTO may elect to consider only a subset of the grounds

raised in the petition, e.g. only 3 of, say, 10 grounds raised in the petition. Solution: file more than one concurrent petitions in order to preserve all

grounds. Settlement agreements are allowed, which create no estoppel. For

estoppel to attach, there must a final written decision (on a claim-by-claim basis). See 35 U.S.C. § 315(e).

PGR can only be filed within 9 months of the issuance of the patent. However, one can get early warning with the “Patent Application Alert Service” (PAAS), a free electronic tool creating automatic alerts of the publication of any U.S. patent application meeting criteria set by the user.

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Inter Partes Review (IPR) Available for all patents, regardless of their filing date. For patents filed on or after March 16, 2013, available only after

the period for PGR has passed, i.e., after the nine-month window immediately after patent issuance.

WARNING: Must be filed within one year of being served with an infringement complaint by the patentee. Must be filed before seeking a declaratory judgment challenging the validity of a claim.

The prior art available for IPR is limited relative to PGR. In IPR, art limited to prior art grounds based on patents and printed publications. On the bright side, this constraint limits the estoppel effects of IPR relative to PGR.

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Must be completed within 12 months from institution, with 6 months good cause exception possible.

IPR: Similarly to PGR, limited discovery is allowed, although not to the extent typical of district court patent litigation.

Estoppel created by post-grant review applies to all USPTO proceedings, ITC proceedings, and district court litigations.

Estoppel standard: Cannot challenge the patent on any ground that was raised or reasonably could have been raised in the IPR proceeding, i.e., novelty or obviousness grounds based on patents and printed publications.

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Problem: Limit of 60 pages for IPR petition, 20 pages less than for PGR.

Problem: The USPTO may elect to consider only a subset of the grounds raised in the petition, e.g. only 3 of, say, 10 grounds raised in the petition.

Solution: file more than one concurrent petitions in order to preserve all grounds.

Settlement agreements are allowed, which create no estoppel. For estoppel to attach, there must a final written decision (on a claim-by-claim basis). See 35 U.S.C. § 315(e).

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The End

Thank You! Questions?

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