Sometimes during the patent process, inventors will perform their own searches of non-patent literature (NPL). While they are just trying to advance their applications, they may have just incurred a large, unexpected cost. Most inventors understand that they have a duty to provide all known, material, non-cumulative prior art to the USPTO during the patent process. In the past, inventors would merely provide copies of NPLs that they found in their own searches to their patent counsel, which, in turn, would disclose such information to the USPTO. Now, it is not that simple. There is a wave of concern over the copying and use of such NPLs. Many firms have adopted policies requiring inventors to have licenses permitting the copying and distribution of such references before they will submit them to the USPTO. Indeed, just last week, several law firms were sued over this very issue. While the USPTO has taken the position that copies submitted to the USPTO fall within the “fair use” exception to copyright infringement, it took no position with regard to copies made for clients or a firm’s internal use. Read a recent discussion of the issue. So, inventors are left with a dilemma. If they conduct a search that inadvertently reveals 100 potentially relevant references, then they might be faced with being charged a license fee for each reference before this prior art may be submitted to the USPTO as part of the patent process. What’s the downside if they decide to save some money and don’t disclose these references? They could be charged with inequitable conduct and have their patent deemed unenforceable if it’s later determined that these references should have been disclosed to the USPTO. Here’s the lesson. Until these lawsuits get cleared up, inventors should be weary of conducting off-the-cuff searches. If they do, they should be prepared for the additional cost of potential licensing fees.
Each time that I traveled to Asia on business over the last seven years, I was asked as to when the world might expect U.S. patent reform. Well, it’s finally here. You cannot look at a paper or a blog without some reference to the America Invents Act being signed into law last Friday. One of the more immediate implications of this law was to give the USPTO fee-setting authority. As such, there will be a 15 percent surcharge on certain patent fees, effective Monday, September 26, 2011. There is also a newly established “micro-entity” rate that should be reviewed. All in all, we haven’t seen a rate hike in about three years from the USPTO so it’s better than most industries.
For years, the U.S. has talked about substantially overhauling U.S. patent law so that it conforms with how most of the rest of the world approaches patent rights. Now, it might become a reality. Yesterday, the Senate overwhelmingly passed patent reform legislation, which if signed, will have the greatest effect on patent law in the last fifty years. See Patently-O’s recent post for a good overview of the legislation. It has been reported that the President is likely to sign the Smith-Leahy America Invents Act into law in the next few days. The most significant change will be to move from a first-to-invent country toward a first-to-file country. This change will greatly affect U.S. practitioners’ patent procurement and litigation strategies. See http://www.patentlyo.com/patentreformbillaspassed.pdf for the language of the Act.
It is a commonly overlooked problem. A person comes up with a new product to bring to market and has the foresight to file an “intent-to-use” U.S. trademark application for the mark XYZ to be used with his new product. Then, before actual use is established, in an effort to get organized, the person sets up a company and assigns all rights, title and interest to the pending trademark application for the mark XYZ to his company. The trademark XYZ eventually becomes registered with the U.S. Patent and Trademark Office (“USPTO”) and is integrated into a portfolio of marks that the company subsequently develops. Now, the company is offering to sell the trademarks to you. Here is something to watch out for when evaluating the portfolio. Generally speaking, it is problematic to assign an “intent-to-use” trademark application except to the successor of the business that owns the trademark application. See 15 U.S.C. § 1060 and TMEP § 501.01(a). The USPTO does not want people trafficking in trademarks that have not been used in commerce. In the above example, the individual prematurely assigned his “intent-to-use” XYZ trademark application to his company and as a result, rendered his trademark registration void and subject to cancellation. What could the individual have done in the above example? He could have filed the application in his company’s name or waited until he had established use before he assigned the application. Pay close attention to trademarks that originate from individuals versus companies and make sure that the proper steps were followed or face the possible consequence of buying an unenforceable trademark registration.
We’ve all heard the phrase, “You can’t judge a book by its cover.” Well, this adage is especially true when looking at an issued patent as there may be valuable information that is not reflected on its face. First, printing errors can occur. Late amendments to the claims of the patent (which define the scope of the protected invention) may not make it into the final version of the patent. Thus, the claims that you are looking at may appear broader than they actually are. This is especially important to know when evaluating potential non-infringement positions. Second, the applicant may have given up significant ground to get its patent granted, which is not necessarily reflected in the patent. For example, the applicant may have distinguished its invention over a prior art system. This could have been done by making claim amendments and arguing their narrow meaning, or by otherwise convincing the U.S. Patent and Trademark Office Examiner that no amendments were necessary because the claims (as written) were sufficiently narrow to get around the prior art. Why is this relevant you ask? Because your company may be practicing a technology that is similar to what the applicant distinguished. In the end, while you should start with the patent, you should read the back and forth correspondence with the U.S. Patent and Trademark Office (known as the “patent prosecution history”) as mistakes can happen and the scope of the patent may not always be as it appears on its face.
Are you tired of waiting for the U.S. Patent and Trademark Office (USPTO) to examine your patent application? You might consider using one of the USPTO’s Patent Prosecution Highway (PPH) programs. In theory, the goal is to use the examination by one country to expedite the examination and allowance of the same claims in another participant country. The USPTO started a pilot PPH program last year with the Korean Intellectual Property Office and reportedly announced yesterday that it intends to introduce two new pilot PPH programs with the Nordic Patent Institute and Israel Patent Office. It’s important to remember that there can still be speed bumps even if you decide to go down these roads. There is no guarantee that an examiner won’t conduct a further search and uncover new prior art despite the initial examination of the other patent office. Nonetheless, if you are permitted to participate in a PPH program, you should get your application reviewed in a timely manner.
Yesterday, the Federal Circuit clarified the standard for proving inequitable conduct in patent infringement cases in its Therasense, Inc. decision. Similar to how it addressed the burden of proof for fraud on the USPTO in the trademark context, the Court adopted a heightened standard for proving inequitable conduct. Here are several points to consider:
- it was a split decision so the Supreme Court may ultimately decide the issue;
- the Court noted that inequitable conduct allegations are a “common litigation tactic” and as such, adopted a more stringent approach in an apparent attempt to discourage this practice;
- the Court clarified the two requisite elements for proving inequitable conduct: materiality and intent;
- with regard to materiality, the Court rejected the USPTO’s broader view of materiality under its Rules as well as the previously used sliding scale approach in favor of a “but for” test– the USPTO would not have allowed a claim of the patent-at-issue had it been aware of the undisclosed prior art;
- the Court provided a carve out to the “but for” rule for “affirmative egregious misconduct” (which should be a ripe area for future litigation);
- with regard to intent, it must be shown that “the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it[;]”
- it is not enough to show that the applicant “should have known” about the materiality of the reference;
- inferring intent will become difficult as “the evidence ‘must be sufficient to require a finding of deceitful intent in light of all the circumstances'” and when there are multiple reasonable inferences, intent cannot be found; and
- absence of a good faith explanation for withholding a material reference will not, in and of itself, be sufficient to prove an intent to deceive.
The USPTO announced earlier this year that it would be implementing a “Track One” expedited patent examination in early May in which applicants could pay a fee and receive accelerated examination of their patent applications. This was particularly appealing for tech-driven applications as the normal process can take years due to the backlog of applications and there was no requirement of discussing any relevant prior art (as is required in other types of accelerated review). It has been reported that the USPTO announced today that its Track One program has been put on hold due to budget cuts. Read a good discussion. Many companies will be disappointed.