MVS Filewrapper® Blog: Update on "Patent Troll" Legislation in the Wake of the 2014 Elections

Post by Luke Holst

In December of 2013, the U.S. House of Representatives passed H.R. 3309, the "Innovation Act," ostensibly to address the problem of abusive patent litigation, sometimes referred to as patent trolling.  While H.R. 3309 passed with bipartisan support by an overwhelming margin of 325-91 votes, its companion bill failed to clear the Senate.  Failure of the Senate bill is attributable to removal of controversial fee-shifting language from H.R. 3309 by Judiciary Committee Chairman Patrick Leahy, D-Vt. The fee-shifting provisions required losing parties in patent litigation to pay their opponent's legal fees—a situation critics argued would discourage the filing of meritorious patent suits by small businesses.  After votes on the Senate counterpart bill stalled repeatedly, Senator Leahy withdrew the bill from the Senate Judiciary Committee's agenda last May.

 

In the wake of the 2014 midterm elections, Republicans have vowed to take up the legislation again early in 2015.  House Judiciary Committee Chairman Bob Goodlatte, R-Va., recently stated that a new version of the Innovation Act, and two companion bills addressing trade secret protections, should be reintroduced in the U.S. House of Representatives in January and pass with bipartisan majorities.  The trade secrets legislation looks to create private civil trade secret misappropriation lawsuits under the federal Economic Espionage Act, which currently only allows prosecutors to bring criminal cases.  On the Senate side, Senator Charles Grassley, R-Ia., is expected to replace Leahy as Chairman of the Judiciary Committee as the Republicans take over the Senate majority in January.  Senator Grassley has signaled his intention to make patent reform a priority in the new Congress and believes patent reform can be accomplished early next year.  In addition, the White House has signaled its support for legislation curbing abusive patent litigation, signaling that this may be an issue for which meaningful legislative action could be seen during the 2015 term.

 

 

MVS Filewrapper® Blog: USPTO Releases New Guidelines on Patent Subject Matter Eligibility

Post by Dan Lorentzen

The USPTO today released new Guidance on Patent Subject Matter Eligibility.  The new guidance comes nearly 9 months after the first set of "2014 Procedure For Subject Matter Eligibility Analysis Of Claims Reciting Or Involving Laws Of Nature/Natural Principles, Natural Phenomena, And/Or Natural Products"  were released in March 2014.  The March guidelines sought to implement new procedures to address changes in the laws relating to patent subject matter eligibility under 35 U.S.C. § 101 in light of the Supreme Court's decisions in Association for Molecular Pathology v. Myriad Genetics, Inc. and Mayo Collaborative Services v. Prometheus Laboratories, Inc. However, a new set of guidelines have been expected based on the more recent Supreme Court decision in Alice Corporation Pty. Ltd. V. CLS Bank International, and based on numerous comments and criticisms of the original guidelines. 

 

The new guidance presents a number of changes in relation to the March guidelines.

The new guidance also includes a new set of examples for "Nature-Based Products."  These examples replace the set of examples that were included with the March guidelines.  Additional explanatory example sets relating to claims that do and do not amount to significantly more than a judicial exception are apparently being developed to be issued at a future date.

 

A more detailed discussion of the new guidelines is forthcoming.

 

 

 

 

MVS Filewrapper® Blog: USPTO Publishes its 2014 Patent Public Advisory Committee Annual Report

By Jonathan Kennedy

The Patent Public Advisory Committee (PPAC) for the USPTO published its Annual Report for the 2014 fiscal year.  The annual report is directed to the President of the United States and addresses many issues faced in the previous fiscal year, summaries of goals met, and recommendations for the future. 

The 2014 report expressed concerns over the effect of sequestration and the USPTO's budget.  At the end of the 2014 fiscal year, the USPTO netted $129 million in fees.  The report notes the USPTO's continued concern over high user fees and beginning in the 2015 year is conducting a biennial fee review to assess any chilling effect on innovation and disclosure due to patent office fees.  This will include an assessment of whether the fees are commensurate with the USPTO's projected needs. 

The 2014 report discussed many goals that were achieved during the 2014 fiscal year including a significant reduction in the backlog of Requests for Continued Examination (RCEs).  Between October 2009 and March 2013, the number of RCEs awaiting examination grew from approximately 17,000 to over 110,000.  As of October 2014, this number has been reduced to 46,441.  The PPAC recommends that the Office establish a goal that all RCEs be examined within four months at the latest—four months is currently the average for when an RCE is examined.  This would help to progress the examination of applications.

The 2014 report also highlights the importance of some programs instituted by the USPTO to decrease patent pendency.  During the 2014 fiscal year total patent application pendency was reduced to an average of 27.4 months.  Specifically the report highlights the use of the After Final Consideration Pilot 2.0, Track One Prioritized Examination, Patent Prosecution Highway (see our recent series on ways to accelerate examination, which addresses both the Track One Prioritized Examination and Patent Prosecution Highway and other programs), and the Quick Path Information Disclosure Statement (QPIDS).  The report notes that QPIDS allows applicants to have new prior art considered by the USPTO without the need for an RCE after payment of the issue fee.  In the 2014 fiscal year there were 2,241 QPIDS requests filed and 1,934 continued on to issue with an RCE.  This program appears to be quite effective.

The report also addressed the opening of satellite offices in Denver, Colorado, Silicon Valley, California, and Dallas Texas, in addition to the satellite office already opened in Detroit, Michigan.  The USPTO hired an additional 137 patent examiners and 47 judges.  Further, the report notes an additional 112 examiners are expected to be hired in the 2015 fiscal year.  At the end of the 2014 fiscal year, the Patent Trial and Appeal Board (PTAB) had 214 judges. 

The report notes that the PTAB was kept busy during the 2014 fiscal year with appeals from examination and post-grant proceedings.  The PTAB affirmed or affirmed-in-part  67%, reversed 30%, and remanded or dismissed 3% examiner decisions on appeal.  Since the inception of the America Invents Act, the PTAB has received 2,082 petitions for post-grant proceedings—1,841 inter partes review petitions, 233 covered business method petitions, 2 post-grant review petitions, and 6 derivation proceeding petitions.   The report notes the vast majority of petitions related to the electrical and computer software arts at 71.6% of petitions.

MVS Filewrapper® Blog: STEM Education Linked to Increased Innovation, Patenting

An interesting new discussion paper from John V. Winters at Oklahoma State University highlights the connection between foreign and native college graduates with science, technology, engineering, and math (STEM) degrees and per capita patenting. The data appear to disclose that the amount of STEM degrees per metropolitan area significantly increases the amount of patents issued per area. This correlation is also suggested to lead to "increase[d] innovation and provide[s] considerable economic benefits to regions and nations."

 

The study examines in particular the causal effects of STEM graduates produced by the U.S. educational system (as opposed to those educated outside the U.S.) in an effort to "help policymakers assess the benefits of higher education policies, especially policies intended to affect the domestic production of STEM graduates."  The study points to increased innovation and patenting as particular social benefits linked to STEM education.

 

It is important to note, however, that while the correlative data is interesting, it is difficult to make conclusions about causation. For example, at noted elsewhere, using patent as the indicator of innovation is somewhat complicated by spectrum of patented subject matter, which is not reflected in the data.  Nonetheless, the paper does help to underscore the importance of continued investment in STEM education.

 

The complete discussion paper is available on the Social Science Research Network (SSRN).

MVS Filewrapper® Blog: 2014 World Food Day and Borlaug Dialogue Takes Place in Des Moines Iowa

Post by Jill Link

 

The 2014 theme for World Food Day was “Family Farming: Feeding the world, caring for the earth.”  This event took place during the 2014 Borlaug Dialogue International Symposium held in Des Moines, Iowa.  MVS was represented by attorney Scott Johnson to honor the 2014 Laureate, Dr. Sanjaya Rajaram for his work in developing wheat varieties. The various events taking place this week are raising awareness of the impact of family farming and smallholder farmers.

 

These events highlight the significant efforts of Dr. Rajaram and other individuals implementing biotechnology tools to achieve significant advancements in the effort of feeding the world's population.  It is estimated that over 9 billion people will inhabit the planet earth by 2050 and biotechnology tools are providing significant advancements to achieve the goals and vision Dr. Borlaug set forth. Biotechnology has significantly aided variety development in various crops for use throughout the world. These crops provide opportunity to increase global food security through their increased crop yields, decrease in production costs, and often their decrease in the "environmental footprint" of farmer. The World Food Prize events provide great opportunity to recognize the beneficial impact and humanitarian opportunities afforded by using biotechnology in plants.

 

The annual event originates from Dr.  Norman Borlaug's work in developing wheat varieties suitable for farming in various conditions throughout the world, including Mexico, Asia and Latin America. These efforts were focused on feeding the world and preventing hunger and famine (for which Dr. Borlaug was awarded a Nobel Peace Prize). Dr. Borlaug's efforts to recognize others seeking to meet the challenge of sustainably feeding the world's population resulted in the establishment of The World Food Prize.

  

To learn more about The World Food Prize or the 2014 events taking place in Des Moines, Iowa please visit http://www.worldfoodprize.org/.

MVS Filewrapper® Blog: FDA Releases First "Purple Book" for Biosimilar Products

The Biosimilars Act (BSA) was passed into law on March 23, 2010 with the goal of encouraging the market entry of generic products, similar to the system that exists for generic drugs under the Hatch-Waxman Act.  The BSA sets forth an abbreviated approval pathway for biologics through a regulatory demonstration of biosimilarity (i.e. interchangeability).

 

More than 4 years after the BSA went into effect, the FDA has released its "Purple Book" listing biological products, including any biosimilar and interchangeable biological products licensed by FDA.  The Purple Book is intended to serve a similar function to the "Orange Book" that lists drug products with therapeutic equivalence evaluations that have been approved by the FDA.  The release of the Purple Book follows closely behind the filing of the first two applications for approval of biosimilar products.

 

For more information about the BSA, see the June 2014 issue of MVS Briefs, available here. 

More information on the "Purple Book"—including current lists of licensed biological products— is available from the FDA website here.

 

 

 

 

 

MVS Filewrapper® Blog: Should Trade Secret Misappropriation be Federalized?

The legal community (along with bipartisan legislation) has been discussing the creation of a private cause of action under federal laws for trade secret misappropriation – or trade secret theft. In light increased cyber-espionage and the apparent ease in which trade secrets can be misappropriated in the marketplace, Congress has taken an apparent interest in "strengthening" trade secret protections.

 

Currently, trade secrets are a matter of state law. This means that each state has established requirements for trade secret misappropriation. In sum, these require a finding that a trade secret holder has a "secret" with value as a result of it not being generally known by others (i.e. competitors), that the trade secret holder has taken efforts to maintain secrecy, and that the party alleged to have access or appropriated the secret used some sort of improper means. Although the precise definitions for these standards may vary among the states, there are relatively small distinctions among the states.

 

Both the House and the Senate may consider bills introduced as early as this fall to consider federalizing this cause of action. The "Defend Trade Secrets Act of 2014" ("DTSA") (S. 2267) and the "Trade Secret Protection Act of 2014" (H.R. 5233) have been introduced to create a private cause of action under the existing Economic Espionage Act of 1996.  The DTSA as drafted would authorize a trade secret owner to bring a civil cause of action in federal court for either (1) a violation of the Economic Espionage Act (which criminalized types of trade secret theft), or (2) a “misappropriation of a trade secret that is related to a product or service used in, or intended for use in, interstate or foreign commerce.” The Judiciary Committee has held a hearing to discuss the benefits of the federal cause of action. A few of the purported benefits of establishing federal legislation would be to grant access to federal forums (based on the subject matter instead of matters of diversity and/or supplemental jurisdiction), along with granting access to federal remedies for seizures to prevent irreparable harm caused by trade secret misappropriation.

 

As expected, there are vocal critics of such federalization, including a group of legal scholars and professors (see opposition letter at http://cyberlaw.stanford.edu/files/blogs/FINAL%20Professors%27%20Letter%20Opposing%20Trade%20Secret%20Legislation.pdf). As stakeholders continue to voice opinions (and concerns) over pending legislation, more information will be provided through Filewrapper.com.

MVS Filewrapper® Blog: USPTO Cancels Washington, D.C. NFL Franchise's Trademark Registrations

The United States Patent and Trademark Office issued a decision yesterday cancelling six federal trademark registrations owned by the Washington, D.C. National Football League franchise.  The cancellation proceeding was brought by five Native American petitioners on the basis that the marks disparage persons or bring them into contempt or disrepute in violation of 15 U.S.C. § 1052(a).  The Trademark Trial and Appeal Board (TTAB) panel of three Administrative Trademark Judges sided with the petitioners, cancelling all six of the challenged registrations. 

 

The registrations in question were all obtained between 1967 and 1990 on behalf of the Washington NFL franchise, and are all word marks.  The registrations were previously challenged in 1992 in a similar proceeding that also challenged the team logos without the word marks.  In the prior proceeding the TTAB held that the marks were disparaging to Native Americans when registered and ordered the registrations canceled.  The Washington NFL franchise appealed the decision in the prior proceeding to the U.S. District Court for the District of Columbia, who reversed the decision as barred by the doctrine of laches. 

 

The TTAB panel found that the five petitioners had standing to bring the cancellation proceeding, and were not barred from doing so by the doctrine of laches. The TTAB panel further found that the alleged honorable intent and manner of use of the term did not contribute to the determination of whether the marks were disparaging, but rather the sole issue was whether a substantial composite of the referenced group found the term to be disparaging in the context of the Washington NFL franchise during the time period when the registrations were obtained (1967-1990). 

 

The TTAB consulted evidence that reflected the sentiments of Native Americans, including a resolution passed by the National Congress of American Indians, various reports and testimony, newspaper articles, official records, and letters, and concluded that the substantial evidence may have disparaged a substantial composite of Native Americans at the times of the registrations.

 

Administrative Trademark Judge Bergsman dissented in the opinion on the basis that the petitioners had not shown by a preponderance of the evidence that a substantial composite of Native Americans found the marks to be disparaging in connection with the Washington NFL franchise during the relevant time frame.

 

The full decision and additional information are available here.  

MVS Filewrapper® Blog: USPTO Glossary Pilot Program

The USPTO has instituted a new program, the Glossary Pilot Program, which began June 2, 2014. The program will allow applicants for computer-related inventions to petition to make special entry into the Glossary Pilot Program with the filing of an application. Applications accepted into this pilot program will receive expedited processing and be placed on an examiner’s special docket prior to the first office action, with special status up to the issuance of the first Office action.

This program is set to run for six (6) moths through December 31, 2014, but may be cut off once the USPTO accepts 200 grantable petitions.  The program is intended to encourage the use of a glossary that provides clear definitions for some terms used in the claims in order to help the reader understand the disclosed invention with a higher level of clarity.

In order to qualify for the Glossary Pilot Program, all of the conditions set forth in the Federal Register Notice, must be met. Specifically:

(1)   The application must be an original, non-reissue, non-provisional utility application that does not claim benefit of a prior filed non-provisional U.S. application, unless the application is a continuation-in-part application filed for the purposes of providing a glossary.

(2)   The application and petition must use Form PTO/SB/436 and must be filed after June 2, 2014 and before the pilot deadline expires.

(3)   The claimed invention must be classified in one of the Art Areas related to computer-related and business method inventions, including those involving Computer Architecture Software and Information Security (Technology Center 2100); Computer Networks, Multiplex, Cable and Cryptography/Security (Technology Center 2400); Communications (Technology Center 2600); and Transportation, Electronic Commerce, Construction, Agriculture, Licensing and Review (Technology Center 3600).  The complete list of qualifying Art Areas is available here.

(4)   The glossary must be placed at the beginning of the detailed description portion of the original specification of the application, identified with a heading, and presented on filing of the application. Definitions for key terminology found in the claims, terms with special definitions, abbreviations, relative terms, terms of degree and functional terminology should be provided, but cannot rely on other parts of the application for completeness, cannot consist of what the term does not mean, cannot be open-ended, cannot consist solely of examples and synonyms, and cannot be disavowed elsewhere in the specifications.

(5)   Filing must be done via EFS-Web.

(6)   The application must contain at least one claim, but no more than four independent claims, and no more than 30 claims total.

 

Status of the petition will be available via Private PAIR. If a dismissal decision is received, the applicant can file a petition if it is believed that the dismissal is not proper. Also, any preliminary amendment filed after the application has entered the pilot program but before the issuance of the first Office Action will be entered unless the amendment causes the application to be non-compliant with the requirements of the program. More information can be found at the USPTO's website.

MVS Filewrapper® Blog: Jury Returns Verdict for Apple in Patent Infringement Suit

On Friday, May 2, 2014 a jury found Samsung Electronics Co. ("Samsung") liable for infringing two patents owned by Apple, Inc. ("Apple").  The two patents are U.S. Patent No. 5,946,647, which is directed to systems and methods that analyze text for things that can be hyperlinked, e.g., email addresses, websites, and phone numbers, and then provides quick link options; and U.S. Patent No. 8,046,721, which is directed to the touch-screen function of sliding a finger across the screen to unlock the display. The jury also concluded that Samsung did not infringe two other Apple patents—U.S. Patent No. 6,847,959 (directed at a search function that allows a user to search both a device and the internet at the same time, also known as universal search) and U.S. Patent No. 7,761,414 (directed at the data syncing functions capable of syncing data while the user is performing other tasks on the device)—and found Apple infringed one Samsung patent, U.S. Patent No. 6,226,449 (directed at camera and folder organization displayed in a gallery format). 

 

In total, Apple was awarded only $119 million of the approximately $2 billion in damages it had sought in this suit, and the majority of Apple's damage award (approximately $99 million) was from infringement of the '647 patent.  Samsung was awarded $158,400 for Apple's infringement of the ' 449 patent.  Thus, many commentators are arguing that despite Samsung's liability, the case was a victory for Samsung as it avoided a judgment nearing or greater than that awarded in August 2012 ($929 million, which is currently on appeal).  It is expected that both Apple and Samsung will file post-verdict motions or appeal parts of this verdict.

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