MVS Filewrapper® Blog: Bring on the New Year—What is in Store for IP in 2014?

Happy New Year to all of our FilewrapperÒ followers! We hope 2013 was a productive year and wish you the best in 2014. As the New Year quickly approaches we would like to share with you a few predictions for 2014 for you to look forward to and for which to prepare!

·         Increased opportunities for quasi-litigation under AIA.  Various new mechanisms are available to challenge patents under the America Inventors Act (also referred to as “AIA” or “Patent Reform”) many provisions of which took effect in 2013. New strategies are available to challenge patents at the USPTO instead of challenging in court, providing distinct advantages—and some disadvantages.  Inter Partes Review, Post-Grant Review and transitional programs specific for business method patents are quasi-litigation proceedings which are heard by a panel of USTPO administrative law judges.  Ex Parte Reexamination—which has been available since 1981—also remains to allow a patent challenge to be heard by a patent examiner, requiring little from the challenger other than filing required papers with some evidence of patent invalidity.  The cost for ex-parte reexamination has significantly increased, although it remains a far less expensive option than litigation with the courts.

·         (Finally) an international design patent application is available!  Design patents protect a product’s new, original and ornamental design.  Design patents present a smart option for investment in protecting a product, since they cost significantly less than utility patents and are generally granted at a much faster rate.  In addition to these benefits of filing design patents, changes in international design registration under the Hague Agreement may facilitate more effective international protection for your design inventions.  Effective December 18, 2013 a single international application designating a variety of countries for protection can be filed through the International Bureau of WIPO.  This is beneficially a single international application to be filed at one location, which will ultimately be examined by many different Offices thereafter to provide more prompt and cost effective options for design protection.  Over 60 countries and territories—including the European Union—are members of the Hague Agreement.  However, there are various countries that are excluded from this treaty (e.g. Australia, Canada, China, Mexico, Japan, India, and Brazil), which would require a separate application as has been done in the past for foreign design patents.  Nonetheless, the Hague Agreement provides significant improvements for international design protection.

·         (Some USPTO) Fees Decrease January 1, 2014.  In addition to the new classification of “micro-entity” status for Applicants to receive 75% reduction of some USPTO fees that took effect in 2013, the New Year also brings certain fee reductions.  Notably, Issue Fee payments for granted patents are substantially reduced (from $1,780 to $960 for large entity), along with the removal of publication fees and assignment recordation fees.  Reissue patent, design patent and plant patent issue fees are also decreasing.  In addition, in 2014 certain PCT fees will be eligible for payment under small and micro entity status.

·         The search continues for a test to determine patentable subject matter under §101.  The Supreme Court will hear CLS Bank v. Alice in 2014 after the Federal Circuit’s en banc decision in 2013 found many software patents to be ineligible.  The Supreme Court will again try to define an abstract idea in considering whether claims to a computerized method (using a computer-readable medium and a computer to implement instructions) is patentable subject matter.  Both the Federal Circuit and patentees are still searching for a test under §101 that is “consistent, cohesive, and accessible [to provide] guidance and predictability for patent applicants and examiners, litigants, and the courts.”

·         We may receive further guidance on Claim Indefiniteness.  The Supreme Court is expected to grant certiorari on Nautilus v. Biosig Instruments involving indefiniteness under §112, second paragraph to determine whether claims having multiple reasonable interpretations are too ambiguous and would render a patent unenforceable for lack of written description.

·         Protecting American from “Patent Trolls.”  As previously reported on FilewrapperÒ, there is legislative movement in the House and Senate to limit lawsuits which can be filed by non-practicing entities (NPEs or Patent Trolls).  There seems to be great energy around limiting “frivolous” lawsuits in our court system.  In early 2014, the Senate will consider a companion bill to Senate 1720 ("Patent Transparency and Improvements Act of 2013"), which is said to already have support from the White House.  If legislation passes the Senate, then the House and Senate bills will need to be reconciled before being sent to the President.

·         New Patent Director.  Stay tuned for further administrative changes at the USPTO as the new Director, Michelle Lee, takes office January 13, 2014. The former Google executive has been made deputy director of the USPTO, and in that capacity will take on the duties of acting director.  Lee has issued statements planning to “attack” the backlog of unexamined patents (remains at more than 500,000) and improve patent quality with improved inter partes review.

MVS Filewrapper® Blog: H.R. 3309 – The Innovation Act

On December 5, 2013, the U.S. House of Representatives passed H.R. 3309, the "Innovation Act", with bipartisan support by an overwhelming margin of 325-91 votes.  H.R. 3309 was drafted to address the perceived growing problem of abusive patent litigation attributed to alleged “patent trolls.”  Early next year, the Senate will likely consider a companion bill, S. 1720, the "Patent Transparency and Improvements Act of 2013", previously introduced by Senator Leahy (D-VT).  While S. 1720 has similar goals of H.R. 3309, the bills have many provisions that are not shared or coextensive.  Thus, it remains to be seen what impact H.R. 3309's passage will have on Senate deliberations in light of the fact the bill enjoys support from the White House.  If legislation passes the Senate, then the House and Senate bills will need to be reconciled in conference committee and sent to the President's desk for signature.  In the meantime, the Senate Committee on the Judiciary will address the issue by holding a hearing entitled "Protecting Small Businesses and Promoting Innovation by Limiting Patent Troll Abuse" on December 17, 2013.

 

Supporters of H.R. 3309 praised its passage as instituting important patent reforms made necessary after the passage of the America Invents Act (P.L. 112-29).  Particularly, the bill heightens pleading standards; requires patent plaintiffs to name anyone who has a financial interest in the patent being litigated; requires courts to delay the discovery process until after claim construction is determined; creates a voluntary process for small businesses to postpone patent lawsuits while their larger sellers complete similar patent lawsuits against the same plaintiff; and, allows a manufacturer to intervene in a lawsuit against its customers and have the action stayed for the customer if both the customer and manufacturer agree.  The centerpiece of the legislation is a fee-shifting provision that requires courts (with some exceptions) to award prevailing parties reasonable attorneys' fees and other expenses when parties bring frivolous lawsuits or claims that have no reasonable basis in law or fact.  Proponents of this legislation include broad support from the technology sector, including internet companies such as Google, Microsoft, Amazon, and Apple.  H.R. 3309 is also favored by brick-and-mortar industries such as restaurants, retailers, realtors, hotels, casinos, airlines, and the auto industry.

 

On the other side, opponents of H.R. 3309 are concerned that the fee-shifting provision would likely favor wealthy parties while discouraging small inventors from pursuing legitimate patent infringement claims.  Opponents include members of the biotechnology and pharmaceutical industries, the Intellectual Property Owners' Association, patent attorneys, and even universities—which warned that the legislation would harm their patent-licensing revenues.  Notably, the Biotechnology Industry Organization ("BIO") believes that the Act will undermine biotech research and innovation, as it would ultimately make it more difficult for patent holders with legitimate claims to protect their intellectual property.  In a press release, BIO stated "[p]rovisions in the legislation would erect unreasonable barriers to access justice for innovators, especially small start-ups that must be able to defend their businesses against patent infringement in a timely and cost-effective manner, and without needless and numerous procedural hurdles or other obstacles."

 

Additional information about H.R. 3309 and S. 1720 will be available shortly from MVS. 

MVS Filewrapper® Blog: Unitary Patent—The New European Patent Regime

Starting in 2014, the European Union will provide another option for obtaining patent protection throughout the European Union and a more streamlined approach to enforcing or invalidating patents throughout the EU.  In 2012 the European Parliament and European Council approved the “EU unitary patent package,” which establishes the European Unitary Patent and the Unified European Patent Court.  The Unitary Patent is scheduled to be effective January 1, 2014 or from the date of the entry into force of the Agreement on a Unified Patent Court, whichever is later. 

Unitary Patent

Patent protection in Europe is currently obtained by individually applying for patents in the desired European countries, or by applying for a patent through the European Patent Office (EPO) and subsequently validating in individual countries after examination.  Both of these options ultimately require a decision regarding in which individual European countries you desire patent protection.  The Unitary Patent will alter this regime by allowing applicants to obtain a single “European” patent that is valid—has a unitary effect—in all 25 EU countries that are contracting members of the Unitary Patent.  The Unitary Patent can be applied for by filing an application through the EPO and opting for the unitary patent.  It will not alter the EPO’s current search and examination procedures or standards for granting a patent.  A further benefit of the Unitary Patent is that it will reduce the need for applicant-validated translations for individual countries—under the Unitary Patent, machine translations of the application into each EU-contracting country’s language will eventually be utilized once machine translation technology is sufficiently improved.  However, until machine translations in all contracting member languages are possible, the requirement will be that the patent is published in two languages.  Thus, only one translation is required.  Applications provided in English can be translated into any contracting member country’s language.  Applications provided in French or German will be translated into English.  It is expected that the first unitary patents may issue as early as April 2014. 

Unified Patent Court

The Unified Patent Court will provide a judicial body with jurisdiction over European patents and Supplementary Protection Certificates.  Currently, European patents must be litigated separately in each country where a patent has been validated and is in effect.  Under the Unified Patent Court, the contracting countries transfer their jurisdiction over European patents and Supplementary Protection Certificates to the Unified Patent Court.  This should alleviate the need for parallel litigation both with respect to validity and infringement.  Under the Unitary Patent Court Agreement, the Unitary Patent will provide the “right to prevent direct use of the invention” and the “right to prevent indirect use of the invention.”  The Agreement specifically exempts “acts done privately and for non-commercial purposes,” “acts done for experimental purposes relating to the subject matter of the patented invention,” “the use of biological material for the purposes of breeding, or discovering and developing other plant varieties,” “the extemporaneous preparation by a pharmacy, for individual cases, of a medicine in accordance with a medical prescription,” and actions exempted in previous Directives or Trade Agreements.  Particular Courts will be set up in local and regional divisions and based on technology:  London will house the Central Division for Life Sciences and Chemistry; Paris will house the Central Division for Physics and Materials; Munich will house the Central Division for Mechanical and Engineering; and the Court of Appeals for the Unified Patent Court will be located in Luxembourg.  It is expected that the Unitary Patent Courts will be operable by 2015.

MVS Filewrapper® Blog: USPTO Proposes Rule Changes for International Design Applications

The U.S. Patent and Trademark Office is seeking comments on it proposed rules for implementing the provisions of Title I of the Patent Law Treaties Implementation Act of 2012.  The law is the implementing legislation for the 1999 Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs (“the Hague Agreement”).  The rules proposed rule changes under the law will allow applicants to file a single international design application; U.S. applicants will be able to file a single application, potentially seeking protection of an industrial design in more than 40 territories.

Under the proposed rules, international design applications could be filed by U.S. applicants in the USPTO as an office of indirect filing, meaning that the USPTO would transmit the international design application to the International Bureau of the World Intellectual Property Organization (“WIPO”).  The International Bureau would review the application for compliance with the applicable formal requirements under the Hague Agreement. Where these requirements have been met, the International Bureau would register the industrial design in the International Register and, subsequently, publish the international registration and send a copy of the publication to each designated office. Since international registration would only occur after the International Bureau finds that the application conforms to the applicable formal requirements, examination before the Office would generally be limited to substantive matters.

According to the USPTO proposal, the “major changes to U.S. practice in title I of the PLTIA pertain to: (1) Standardizing formal requirements for international design applications; (2) establishing the USPTO as an office through which international design applications may be filed; (3) providing a right of priority with respect to international design applications; (4) treating an international design application that designates the United States as having the same effect from its filing date as that of a national design application; (5) providing provisional rights for published international design applications that designate the United States; (6) setting the patent term for design patents issuing from both national design applications under chapter 16 and international design applications designating the United States to 15 years from the date of patent grant; (7) providing for examination by the Office of international design applications that designate the United States; and (8) permitting an applicant's failure to act within prescribed time limits in an international design application to be excused as to the United States under certain conditions.”

Additional information, including the specific proposed rules and information on how to submit comments, is available here.

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