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Where Will the Next Satellite Patent Office be Located?

By Timothy J. Maier on November 9, 2011 9:36 AM | No Comments | No TrackBacks
Of course, this whole discussion is moot unless congress actually decides to open satellite offices, and this may take longer than it seems.  A satellite office is scheduled in Detroit next summer, but under the America Invents Act (AIA), Congress has the authority to open two additional offices by 2014.   Whether it elects to do so is another question.  If Congress does decide to open additional satellite offices, Congress is directed by the AIA to open offices in geographically diverse locations while giving consideration to "the availability of scientific and technically knowledgeable personnel in the region."  However, it appears that lobbyists, and not the criteria, are guiding the decision.

The main issue here, as it always is, is money.  Congressman and various interest groups are all acutely aware of the economic advantages of a local patent office, and thus, the matter has come to the forefront for lobbyists in the nation's capital.  A satellite office, directly and indirectly, creates hundreds of jobs and provide the locality with an economic boost.  Considering the current economic climate, these advantages would be extremely valuable, not only to the community that receives them, but to the Congressman who is able to obtain them.  

Detroit was an easy first choice. In light of the reapidly declining automotive industry and the general economic state of the city, it seemed like Detroit needed a satellite office.  However, as soon as the America Invents Act was officially signed into law on September 16, 2011, the lobbying has heated up for the other two possible locations.  California, New Mexico, Texas and Colorado are among the states making strong pushes for satellite office.  While each state is publicly toting how their state best fits the AIA criteria, it would be naive to think there is not behind the scenes jockeying going on for these extremely valuable offices.  

In our humble opinion, California seems to be the odds-on favorite at this point, as it would provide geographic balance , has large groups scientific and technically knowledgeable personnel congregated in hot spots throughout the state, such as Silicon Valley and Palo Alto, and maybe most importantly, has been experiencing some well publicized economic problems.  Stay tuned for developments. 

USPTO Announces First Allowed Application Under New Prioritized Examination (Track 1) Program

By Timothy J. Maier on November 4, 2011 10:21 AM | No Comments | No TrackBacks

Before a joint meeting of the Pauline Newman IP American Inn of Court and the Giles S. Rich American Inn of Court, Director Dave Kappos announced that the USPTO has allowed an application under the new Track 1 accelerated examination program.  The program was implemented September 26, 2011, which means the application was allowed approximately one month from the initial filing.

Track 1 is part of the three track program established under the America Invents Act and provides for accelerated examination if certain requirements are met and payment of a $4,000 fee is received.  The objective of the program is to provide a final disposition on qualifying applications within 12 months of being granted prioritized status.

Director Kappos also indicated that the number of applications accepted under Track 1 may be capped at around 10,000 in order to ensure that a final disposition is provided on each within twelve months.  Director Kappos estimated that approximately 1,200 applications have been filed under the program thus far. 

America Invents Act: Signed Into Law Today

By Timothy J. Maier on September 16, 2011 3:45 PM | No Comments | No TrackBacks
Today, at Thomas Jefferson High School for Science and Technology, President Obama signed the Smith-Leahy America Invents Act (Previously H.R. 1249) into law today.  Obama signed the bill into law in front of a bipartisan group of congressman, including Senator Patrick Leahy (D-VT) and Rep. Lamar Smith (R-TX).  When Obama signed the bill, a number of provisions of the bill became effective immediately:

Best Mode: Effective immediately, best mode will no longer be a valid basis for finding a patent invalid or unenforceable.  However, the best mode requirement remains in section 112 and, thus, a patent application may still be rejected for failure to disclose the best mode.

Micro Entities:  All micro entities will receive a 75% reduction in fees.  Micro entities must: (1) qualify as small entities, (2) not been an inventor on 4 prior applications, (3) have a gross income exceeding three times the median household income for that previous calendar year and (4) not assigned the application to a person or entity who has exceeded the gross income level of part (3).  Please see section 10, at pages 89-90 for the exact text.

New Statutory Fee Schedule: The new fee schedule of section 11 is now implemented.  Please consult section 11 of the act for, among other fees, the new filing, examination, issue and maintenance fees.  Also, this site does a great job of laying out the fees and how they will be affected by the surcharge to be implemented in 10 days.  The office also now has the authority to adjust fees for recovering the costs for fees established, authorized or charged under Title 35.

Changes to Venue and Jurisdiction: The default venue for actions brought under 28 USC 32, 145, 146, 154(b)(4)(A) and 293 or 15 USC 1071(b)(4) is now the Eastern District of Virginia (instead of the District Court of D.C., as it was previously).  Further, 28 USC 1338 is amended to deny state courts jurisdiction over actions arising under Acts of Congress relating to patents, plant variety protection and copyrights.

False Marking:Effective immediately, only individuals who have suffered a competitive injury as the result of false marking may bring a qui tam suit.  Further, virtual markings are now explicitly covered by the false marking statutes.  These provisions apply to all cases pending or commenced on or after September 16, 2011.

Bans on Patentability: Any claims directed to or encompassing a "human organism" are now barred.  Also, any tax strategy patents related to reducing, deferring or avoiding tax liability are also barred.


More law is scheduled to be implemented in 10 days, on September 26, 2011, so stay tuned for more updates.

America Invents Act: Overview of the Post Grant Review System

By Timothy J. Maier on September 13, 2011 4:01 PM | No Comments | No TrackBacks
One of the more overlooked aspects of the recently passed America Invents Act is the introduction of a post grant system to the United States patent system. Once the bill is implemented, the Board of Patent Appeals and Interferences (BPAI) will become the Patent Trial and Appeal Board (PTAB) and the PTAB will be tasked to handle a new post grant system.  Under the new Post Grant Review (PGR) system, any third party may request to cancel as unpatentable one or more claims of any patent by asserting an argument regarding invalidity and providing evidence to support this argument. 

Many opponents of PGR believe this system will make it harder to acquire patents and will deter, instead of spur, innovation.  However, post grant review, if implemented properly, can provide cheaper alternatives to businesses looking to secure solid intellectual property rights, as documented in a 2006 study arguing for the introduction of a post grant review system.  Instead of acquiring a patent and fending off multiple law suits, PGR can provide a cheaper and faster alternative to litigation.  While PGR may increase some start up costs associated with contested intellectual property, it may decrease costs in the long run so long as the costs associated with PGR remain low. 

For more information about the PGR system, please keep reading.
Continue reading America Invents Act: Overview of the Post Grant Review System.

Microsoft Sues Motorola for Patent Infringement

By Timothy J. Maier on August 29, 2011 4:22 PM | No Comments | No TrackBacks

In the latest episode of software giant patent infringement lawsuits, Microsoft has sued Motorola over non-US made handheld phones.  Microsoft alleges that various Motorola phones, including the Droid 2, Droid X and Backflip, infringe seven of Microsoft's patents.  The patents in question relate to the android mobile operating system and involve methods for, among others, ActiveSync email synchronization patents. 

Considering that Google is set to acquire Motorola, this suit is the latest suit in the web of suits between Apple, Microsoft, Google, and other tech companies.  (Click here for a good graphic documenting these suits)  Based on the rash of litigation surrounding Android software, it appears that any company attempting to manufacture or sell android software is going to be involved in litigation.  However, Microsoft has already won a case against HTC and is currently receiving $5.00 per phone.  Thus, it is perceived that this suit is merely a negotiating tool for a similar licensing structure.  It is rumored that Microsoft is now looking for royalties between $7.00 and $12.00 per device. 

 Despite the outrage due to the large number of suits in the software patent arena, a majority of civil suits, regardless of the subject matter, are settled before they ever reach court.  If one of these software suits is able to reach the Federal Circuit, the Federal Circuit may be able to set down firm precedent to prevent future lawsuits.  Until then, however, these suits should not be reason for outrage, and can merely be viewed as negotiating chips, as they have yet to prove to be much more.  Microsoft has a large patent portfolio, a valuable business asset, and is using this asset just as any other asset is used, to generate a profit.

America Invents Act: Qui tam provision and virtual patent marking

By Timothy J. Maier on July 8, 2011 11:26 AM | No Comments | No TrackBacks
As part of the House version of the patent reform bill now known as the America Invents Act, the false marking statute has been amended to remove the qui tam provision. This provision allowed any person to sue, on behalf of the United States, anyone who marked an unpatented article as "patented" or "patent pending." The qui tam provision, intended to prevent deception of the public due to false marking of unpatented articles, resulted in numerous suits filed by individuals against companies who simply neglected to remove references to recently-expired patents from their products or product packaging.

The amended false marking statute limits standing to bring a false marking case solely to those who suffered injury as a result of false marking. Furthermore, the amended statute provides a three-year grace period, during which patentees are protected from false marking suits for three years following the expiration of a patent.

Another provision related to patent marking introduced by the Act allows the use of "virtual marking" to satisfy the requirement provide notice to the public by marking patented products or product packaging with the number of the patent covering the product. Under the virtual marking provision, a patentee may mark products or product packaging with a statement directing the reader to a website listing the patents relevant to that product.

America Invents Act: "Micro-Entity" Fee Reductions

By Timothy J. Maier on July 6, 2011 10:49 AM | No Comments | No TrackBacks
Among the changes proposed in the America Invents Act, which was passed by the Senate in March and by the House in June of this year, is the creation of a "micro-entity" class that will receive the benefit of a 75% reduction in USPTO fees.

Presently, an applicant having "small entity" status receives a 50% fee reduction with the Patent Office. To qualify as a small entity, the applicant must be an individual inventor, a business having less than 500 employees, or a nonprofit organization or university. To claim the new micro-entity status, an applicant would have to not only qualify under the small entity guidelines, but must further assert: that the applicant has been not named as inventor on more than four previuosly-filed US patent applications; that the applicant's annual income does not exceed three times the US median income; and that the applications is not assigned or subject to be assigned to an entity having an income over three times the US median income.

Furthermore, the patent reform bills passed by the House and Senate grant micro-entity status to certain higher education institutions. The Senate version of the bill, S.23, allows only state public institutions to be considered micro-entities. In contrast, the House version, H.R. 1249, expands micro-entity status to encompass public and non-profit universities, as well as other higher education institutions.

America Invents Act: Post-Grant Review and Inter Partes Review

By Timothy J. Maier on July 1, 2011 11:08 AM | No Comments | No TrackBacks
The patent reform bill passed by the House of Representatives on June 23, 2011 includes a number of significant changes to U.S. patent law, including a shift to a "first-to-file" system and greater control by the USPTO over the fees that it collects. Among the changes in H.R. 1249 are post-grant review and inter partes review procedures, which will allow any person to file a petition for review of an issued patent.

Under the post-grant review procedure, a third party has a one-year window (nine months in the Senate version) after the issuance of a patent to file a petition for review of the issued patent. The petitioner would have to show that "it is more likely than not that at least one of the claims challenged in the petition is unpatentable" or that "the petition raises a novel or unsettled legal question that is important to other patents or patent applications."

Post-grant review will allow the petitioner to submit any prior art relevant to the patentability of the issued patent and to raise all questions of patentability, including 35 USC §112 issues. In rebuttal, the patent owner may file a preliminary response stating reasons why review by the USPTO is unnecessary. The USPTO must then grant or deny the review request within a year.

The proposed inter partes review procedure differs from the post-grant review procedure as to timing, issues of patentability, and the scope of the prior art. A request for inter partes review may be filed only after the time period for post-grant review has expired, and the requestor may only submit patents or printed publications to be considered as prior art. Furthermore, the issues of patentability to be considered under inter partes review are limited to novelty and unobviousness of the issued patent. Inter partes review would replace the presently available inter partes reexamination procedure; ex parte reexamination, however, will remain an option.

Stay tuned to this blog for an overview of other changes proposed by the America Invents Act.

Patent Reform Bill Passes in House by a 304-117 vote

By Timothy J. Maier on June 29, 2011 8:49 AM | No Comments | No TrackBacks
On June 23, 2011, the House of Representatives voted to pass H.R. 1249, also known as the America Invents Act, moving forward a proposed overhaul to U.S. patent law that some consider to be the most significant change to the system since the Patent Act of 1952.

One of the most debated changes in the patent reform bill is the shift from a "first-to-invent" system, which is unique to the United States, to a "first-to-file" system, used in the rest of the world. Under the current system, patent rights are granted to the first person who conceived of the invention and diligently reduced it to practice. While the first applicant to file would receive prima facie rights in the patent, a second applicant may initiate interference proceedings to ascertain which of the applicants was the first to invent. Under the first-to-file system, patent rights would be granted to the first person to file an application, regardless of the date of actual invention.

Opponents of the change argue that the first-to-file system puts small businesses and sole inventors, and entrepreneurs at a disadvantage, as such small entities may not have the resources available to promptly draft and file patent applications on their inventions. The change is considered to favor large entities, whose funds and resources allow them to easily cover the costs of drafting and filing applications with the USPTO.

An amendment to strike the shift to the first-to-file system was tabled by a vote of 87-13; however, some opponents vowed to continue to strike this portion of the bill.

Another significant change in the America Invents Act affects the funding of the Patent and Trademark Office. Presently, the fees collected by the USPTO are not allocated specifically to the Patent Office's budget, but may be appropriated to other programs by Congress, requiring the USPTO to participate a separate appropriations process to receive a portion of the collected fees. H.R. 1249, however, would allow the USPTO to maintain the collected fees in a dedicated account, even though the use of those funds would be subject to Congressional approval. In contrast, S. 23, which passed in the Senate in March 2011 by a 95-5 vote, calls for the creation of a "USPTO Revolving Fund," essentially letting the Office keep the collected filing fees. Greater control over funding will enable the Patent Office to better address its backlog of pending patent applications, which number over 700,000. The differences between the two versions of the bills will have to be reconciled before the bill can become law.

Other changes to the U.S. patent system proposed by the America Invents Act will be the subject of future posts on this blog.

Patent Reform Act moves closer to passage in Senate

By Timothy J. Maier on March 2, 2011 4:18 PM | No Comments | No TrackBacks
On Tuesday, the Senate moved closer towards an agreement to overhaul the federal patent system, adopting a manager's amendment (Patent Reform Bill S.23) offered by Judiciary Chairman Leahy (D-VT) by a 97-2 vote. A vote on S.23 is expected to take place in the evening of March 2, 2011.

The latest version of the Patent Reform Bill would have two major impacts on the patent system and the USPTO.  First, the bill would allow the USPTO to keep the entirety of the fees it charges, even when the sum of the fees exceeds that which is allowed in the USPTO's budget.  Second, the bill includes clauses that would make the US patent system a "first to file" system.  While the former is widely supported, the latter is a contentious issue; thus, it is surprising that the Senate may move to vote so quickly on the matter.

If the bill is passed, the USPTO would be allowed to keep all of its fees in order to reinvest the money in the agency in order to try to fix the widespread backlog problems at the Patent Office. Presently, the USPTO's backlog on patent examination is notoriously long, and with outdated computers, a shortage of examiners, and application numbers once again on the rise, the backlog is not expected to get any shorter. Most of the Senate is in agreement that the backlog must be fixed, and so there does not seem to be much opposition to allowing the USPTO to keep all of its fees. This measure has also received support from the Obama administration.

The issue of "first-to-file," on the other hand, is much more contentious. While most of the world's patent offices now employ a "first-to-file" system, the U.S. federal patent system still function under a "first to invent" system. On this issue, the most prominent point of contention seems to stem from a divide between large and small corporations. Large corporations support this amendment, as it would allow them to simply file a paper to gain the rights to an invention instead of arguing their rights in potential costly litigation. However, small corporations oppose this amendment, as many believe it would hinder their ability to invent, because they cannot afford to file a patent every time they believe they might have an invention, regardless of the fee breaks given to small entities.

Another intriguing argument, which relates the two major aspects of the bill, is that moving to a "first-to-file" system would allow the USPTO to focus all of its resources on patent prosecution. In the current system, the USPTO must handle interference proceedings in order to determine the rightful owner of a patent, but this would no longer be necessary if the U.S. were to move to a first to file system. The counter-argument is that the interference proceedings are necessary to prevent those with resources from simply running to the patent office with another's invention while that person is gathering the resources necessary to file.

As these two arguments demonstrate, there does not seem to be a middle ground for shifting the U.S. patent system to a first-to-file system.  As such, the issue is likely to be highly debated.  Stay tuned for updates on the Patent Reform Act as it makes its way through Congress.
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