Source: https://www.patentdocs.org/2016/05/page/3/
Timestamp: 2019-04-19 10:33:34+00:00

Document:
Some things are rare. A visit from Halley's comet . . . the Chicago Cubs winning the World Series . . . a season of Game of Thrones without a major character's death . . . and a Federal Circuit panel finding that claims pass muster under 35 U.S.C. § 101. With respect to the latter category, there is now a second post-Alice decision concluding that a patent's claims meet the statutory and judicial requirements of patent-eligibility.
In 2012, Enfish sued Microsoft and several other parties in the Central District of California for infringement of U.S. Patent Nos. 6,151,604 and 6,163,775. The District Court, with the late Judge Mariana R. Pfaelzer presiding, found all claims invalid under § 101 because they were directed to the abstract idea of "storing, organizing, and retrieving memory in a logical table" or "the concept of organizing information using tabular formats."
In order to appreciate the claimed invention, let's take a step back. Traditional databases are relational, in that "each entity (i.e., each type of thing) that is modeled is provided in a separate table" of rows and columns. Classic examples include an employee database that contains a table with entries for each employee, as well as respective tables for employee job titles and departments.
In contrast, the patents describe a "self-referential" table structure that allows the information that would normally appear in multiple relational tables to be stored in a single table. Some of the information that might otherwise appear in columns is formatted as rows instead. In the specification of the '604 patent, Enfish asserted that this self-referential arrangement had several advantages. These include faster lookups, more efficient storage of data other than structured text, and no requirement that one model each thing to be represented in the database as a separate table. For instance, "the self-referential database can be launched without [modeling and configuration of tables] and instead configured on-the-fly."
1. Create, in a computer memory, a logical table that need not be stored contiguously in the computer memory, the logical table being comprised of rows and columns, the rows corresponding to records, the columns corresponding to fields or attributes, the logical table being capable of storing different kinds of records.
2. Assign each row and column an object identification number (OID) that, when stored as data, can act as a pointer to the associated row or column and that can be of variable length between databases.
3. For each column, store information about that column in one or more rows, rendering the table self-referential, the appending, to the logical table, of new columns that are available for immediate use being possible through the creation of new column definition records.
4. In one or more cells defined by the intersection of the rows and columns, store and access data, which can include structured data, unstructured data, or a pointer to another row.
In its substantive analysis, the Court proceeded to review the two-prong test for patent-eligibility set forth in Alice Corp. v. CLS Bank Int'l. First, one must determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to something more than the judicial exception. Notably, generic computer implementation of an otherwise abstract process does not qualify as "something more."
With respect to the "directed to" language of the first prong, the Court wrote that this inquiry "applies a stage-one filter to claims, considered in light of the specification, based on whether their character as a whole is directed to excluded subject matter." The Supreme Court "suggested that claims purporting to improve the functioning of the computer itself, or improving an existing technological process might not succumb to the abstract idea exception." Since Alice, this analysis has almost exclusively been the domain of the second prong. However, the Federal Circuit reasoned that performing such an analysis as an entry point to the Alice test was appropriate.
As a result, the Court interpreted the first prong of Alice as making a determination of "whether the focus of the claims is on the specific asserted improvement in computer capabilities (i.e., the self-referential table for a computer database) or, instead, on a process that qualifies as an abstract idea for which computers are invoked merely as a tool." The Court noted that the Alice and Bilski v. Kappos cases, as well as essentially all but one other § 101 case that it has reviewed since Alice, fell due to being of the latter type. In contrast, claim 17 is focused on "an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity."
The Court dismissed the conclusion of Judge Pfaelzer that the claims were abstract, and also rejected Microsoft's argument that the claims are directed to "the concepts of organizing data into a logical table with identified columns and rows where one or more rows are used to store an index or information defining columns." Instead, the Court found that "describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule." The Court further observed that, based on the District Court's construction, claim 17 recited a specific implementation of a self-referential table rather than the storing of tabular data in general. Thus, "the district court oversimplified the self-referential component of the claims and downplayed the invention's benefits."
The specification also teaches that the self-referential table functions differently than conventional database structures. According to the specification, traditional databases, such as those that follow the relational model and those that follow the object oriented model, are inferior to the claimed invention. While the structural requirements of current databases require a programmer to predefine a structure and subsequent data entry must conform to that structure, the database of the present invention does not require a programmer to preconfigure a structure to which a user must adapt data entry. Moreover, our conclusion that the claims are directed to an improvement of an existing technology is bolstered by the specification's teachings that the claimed invention achieves other benefits over conventional databases, such as increased flexibility, faster search times, and smaller memory requirements.
Further, the ability of the invention to operate on a general-purpose computer was not dispositive. The Court observed that "[u]nlike the claims at issue in Alice or, more recently in Versata Development Group v. SAP America, Inc., . . . the claims here are directed to an improvement in the functioning of a computer [while] the claims at issue in Alice and Versata can readily be understood as simply adding conventional computer components to well-known business practices." Requiring an improvement to a computer to be in hardware would resurrect the bright-line machine-or-transformation test of Bilski or improperly "creat[e] a categorical ban on software patents."
The Court went on to recognize the importance of software and the potential for innovation therewith: "Much of the advancement made in computer technology consists of improvements to software that, by their very nature, may not be defined by particular physical features but rather by logical structures and processes . . . [w]e do not see in Bilski or Alice, or our cases, an exclusion to patenting this large field of technological progress."
Accordingly, the Court concluded that the claims were not abstract under prong one of Alice, and therefore prong two of that test need not be carried out.
The outcome of this case may seem surprising when viewing the claims on their face. Claim 17 seems broad, but due to the § 112 ¶ 6 analysis, the Court applied the Alice test to the claims as construed in view of the specification. This narrower interpretation of the claims (the four-step algorithm above) likely made the invention look less abstract. Further, perhaps because the specification was in play from this construction, the Court took into account the patentee's contentions therein regarding the improvements and advantages of the invention.
Clearly, a practice point to take away is that describing how an invention improves over the prior art, especially if it improves the operation of a computer, can be advantageous. Of course, for purposes of avoiding estoppel, one should be careful when pointing out the deficiencies of what came before. Additionally, it appears as if the claims do not need to explicitly recite such improvements.
Another interesting aspect of this decision is that the Federal Circuit subtly changed the nature of the Alice test. Now, one can short-circuit the full analysis if the claimed invention is clearly not abstract, and doing so may involve determining whether the invention improves the operation of a computer or technological process. In a sense, the two-prong test is being compressed into a one-prong test. The impact of this approach may be significant, especially if it is adopted by district courts and the USPTO.
Additionally, the Court made it clear that whether such an improvement resides in hardware or software is not material. Since Bilski, there has been a knee-jerk reaction to add a hardware component to at least one element of each independent claim. Perhaps that is no longer necessary when the innovation is in software.
Finally, this outcome is in line with the reasoning behind the USPTO's abstract ideas examples, published last year in January and July. Based on these examples, as well as the Diamond v. Diehr and DDR Holdings v. Hotels.com cases, there are two main ways to claim software inventions to avoid § 101 issues. First, one can claim the software controlling other machines or components. Not unlike Diehr, when claimed with an appropriate level of specificity, such inventions may be viewed as an improvement to an industrial process. Second, one can claim that the software improves the operation of a computer itself. Usually this will take the form of lower-layer functions that support applications developed thereon. For instance, well-drafted claims directed to operating system function, networking, message parsing, speech recognition, image processing, compression, encryption, and graphical user interfaces, have all been found patent-eligible either in the courts or by the USPTO. Now we can add databases to that list.
This afternoon, President Obama signed the Defend Trade Secrets Act of 2016 ("DTSA") into law, creating a new Federal cause of action for misappropriation of trade secrets. The new law is the most significant expansion of Federal intellectual property law in a generation, and brings with it significant benefits -- but also new responsibilities -- for intellectual property owners and employers. And in this era of narrowed subject matter eligibility for patenting, the DTSA may provide enough of an incentive for intellectual property owners to keep more information as trade secrets.
Prior to the enactment of the DTSA, trade secret owners could protect their rights under state law or a patchwork of Federal laws that provided criminal and civil sanctions for interstate trade secret misappropriation or misuse of computerized data, such as the Economic Espionage Act ("EEA") and the Computer Fraud and Abuse Act ("CFAA"). However, although most states -- all except Massachusetts and New York -- have adopted a version of the Uniform Trade Secrets Act ("UTSA"), those enactments have actually not been uniform, and the variations have proved to be important to trade secret owners seeking relief. Furthermore, the state law nature of UTSA claims has made it difficult to chase misappropriators across state law and collect evidence from third parties located out-of-state or overseas. Prior Federal laws did not provide much more help, relegating aggrieved parties to seeking criminal sanctions under the EEA or twisting their civil claims into the ill-fitting paradigm of the CFAA. Against this backdrop, Congress worked for several years to build a strong bipartisan consensus for a Federal civil cause of action for misappropriation of trade secrets, resulting in the DTSA.
The DTSA includes three key provisions that intellectual property owners should know about. First, the Federal civil cause of action for misappropriation of trade secrets. Second, an ex parte seizure provision that can be invoked in extraordinary circumstances. Third, whistleblower protections that preempt criminal and civil liability under either Federal or state law, and place certain new obligations upon employers.
First, the DTSA allows a trade secret owner (whether the assignee or a licensee) to bring a civil action against a misappropriator if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce. The definition of a trade secret is intentionally broad and based on the definition in the UTSA, which requires (i) the owner to have taken reasonable measures to keep the information secret and (ii) the information to derive independent economic value from not being generally known or readily ascertainable through proper means to another person who can obtain economic value from the information. The acts that constitute misappropriation are also taken from the UTSA, and essentially require the misappropriator to have used improper means to have obtained the trade secrets, or been the beneficiary of someone else who used improper means and know that the information was improperly obtained. Notably, the DTSA specifically states that reverse engineering, independent derivation, or any other lawful means of acquisition do not constitute improper means.
Second, unlike the UTSA, the DTSA provides a means for a trade secret owner to have a court seize stolen trade secrets, without notice to the misappropriator, if the misapropriator is seeking to flee the country, planning to disclose the trade secret to a third party immediately, planning to destroy evidence of the misappropriation, or is otherwise not amenable to enforcement of the court's orders. There are strict requirements for the initial ex parte seizure petition, the scope of the court's seizure order, and the post-seizure treatment of the evidence. Further, the DTSA requires a hearing within one week to allow a defendant to argue that the ex parte seizure was improper. And if the seizure proves to be wrongful or excessive, the aggrieved subject of the seizure can bring a cause of action against the trade secret owner (and the damages are not limited by any seizure bond set by the court).
Third, the DTSA insulates whistleblowers against liability under any Federal or state trade secret law (either criminal or civil), so long as the whistleblower discloses any trade secrets in confidence either in a lawsuit filed under seal or to government officials, if the purpose is reporting a suspected violation of the law. Furthermore, employers must provide notice of the whistleblower protections in all future contracts with employees (which can include disclosure in the form of an employee handbook). In that context, the DTSA indicates that the term "employees" includes contractors as well. If an employer fails to make the disclosure, it is barred from obtaining exemplary damages or attorney's fees in an action against an employee under the DTSA.
All in all, the DTSA is a powerful new tool that intellectual property owners now have at their disposal. It strengthens trade secret rights, and makes them easier to enforce. Given that patent rights have been chipped away in certain contexts (especially through lack of subject matter eligibility for certain types of inventions), it may be enough incentive for intellectual property owners to keep their inventions secret. It certainly merits greater consideration of secrecy, given its strengthening of owners' rights; on the other hand, it also requires employers to start taking steps to ensure notice of whistleblower rights. So, in the end, it is likely to be a boon to both innovators and employees.
On Monday, May 9, 2016, the U.S. Patent and Trademark Office published information on Patent Trial and Appeal Board (PTAB) trials regarding motions to amend claims. The Acting Chief Administrative Patent Judge, Nathan Kelley, wrote that while the America Invents Act (AIA) gives patent owners the right to file a motion to amend its claims during a trial, few such motions have been granted as compared to the number of total petitions filed.
A motion to amend may involve a request to cancel patent claims, to substitute claims in the patent, or a combination of the two. Requests solely to cancel claims typically are granted without substantive review. Requests that seek to substitute claims are generally decided only when the panel of judges determines that the claims as originally issued are unpatentable, because nearly all such motions are contingent on a decision unfavorable to patentability of the original claims.
• Of those 192, not all ultimately required the PTAB to pass on the merits of the motion. This is because, often, motions to amend are filed as "contingent" motions -- if the PTAB upholds the patentability of the original claims, such motions never get decided. Several other cases settle before motions to amend are decided. Additionally, some motions to "amend" only request the cancellation of claims, and those are routinely granted.
Judge Kelley summarized that this leaves 118 motions to amend (out of the 192) that a PTAB panel has had a chance to review. Of these, the PTAB only granted or granted-in-part 6.
Of those denied, including the denial portion of those granted-in-part, 22 were denied solely on procedural grounds (only one of which was that the patent owner failed to state that the substitute claims were patentable over the prior art "in general"), and 94 were denied after identifying specific grounds of patentability that the proposed amended claims did not satisfy.
For the 94 denied, this refers to the proposed amended claims still being found unpatentable. This is akin to an examiner rejecting an amended claim because it is anticipated, obvious, not described, etc. But, the PTAB proceedings must be completed within a year, and there is no time for the back-and-forth between the applicant and the USPTO that happens during prosecution. Instead, the PTAB acts as the final arbiter of these newly proposed claims based solely on the briefing presented to it by the parties -- if the PTAB grants such a motion, the new claims will issue (and be enforceable against the public) without any examination to ensure compliance with the statutory requirements for patentability. A disappointed patent owner who believes the PTAB erred in refusing to allow a claim amendment can, of course, seek review from the Federal Circuit.
Below is a table from the study that summarizes reasons provided for denying entry of substitute claims.
As seen from the table, it appears that patent owners have not been able to satisfy the Board that any such proposed amendments would in fact distinguish over the art used to challenge the patent. Patent owners, of course, have to consider an infringer when proposing amendments to the claims, and it would seem that most proposed amendments likely do not vary enough in scope over issued claims so as to overcome the challenging art.
Judge Kelley discounted the notion that motions to amend are no longer being filed because parties think they're futile, and noted that the PTAB is currently on track to have about 50 motions filed this year, which is consistent with the level they were filed in 2013 (e.g., 49 filed) and 2015 (e.g., 59 filed). Although there were 92 motions to amend filed in 2014, and so these motions are on the decline based on a few years of data.
In a notice published in the Federal Register (88 Fed. Reg. 27381) on Friday, the U.S. Patent and Trademark Office issued further guidance for determining subject matter eligibility under 35 U.S.C. § 101. The notice, entitled "May 2016 Subject Matter Eligibility Update," discusses a memorandum on subject matter eligibility determinations that was issued to the patent examining corps, additional life sciences examples that are intended to assist examiners in making eligibility determinations, an updated index of eligibility examples, and an updated list of court decisions (Supreme Court and Federal Circuit) addressing subject matter eligibility, each of which has been made available on the Office's subject matter eligibility webpage.
The notice begins by reminding stakeholders about the July 2015 Update on Subject Matter Eligibility, which provided further guidance to examiners on making subject matter eligibility determinations and sought public comment regarding the Office's prior guidance on subject matter eligibility. In response to public feedback regarding the July 2015 Update -- a total of 37 submissions were submitted -- the Office issued a memorandum on eligibility determinations to the examining corps on May 4, 2016. In particular, the memorandum, entitled "Formulating a Subject Matter Eligibility Rejection and Evaluating the Applicant's Response to a Subject Matter Eligibility Rejection," provides guidance to examiners on formulating subject matter eligibility rejections and evaluating responses to subject matter eligibility rejections.
The memorandum to the patent examining corps, which runs just over six pages in length and is signed by Robert Bahr, Deputy Commissioner for Patent Examination Policy, provides examiners with additional guidance for applying the analytic framework set forth in the 2014 Interim Guidance on Patent Subject Matter Eligibility (see "USPTO Issues Interim Guidance on Subject Matter Eligibility"). As noted in the 2014 Interim Guidance, the two-step analysis for determining subject matter eligibility under 35 U.S.C. § 101 that is set forth in MPEP § 2106, consists of: (1) determining whether the claimed invention is "directed to one of the four statutory categories" (i.e., process, machine, manufacture, or composition of matter), and (2) determining whether the claimed invention is "wholly directed to subject matter encompassing a judicially recognized exception." In the 2014 Interim Guidance, the first step of the above analysis was labeled "Step 1," and the second step of the analysis was divided into a "Step 2A" and a "Step 2B," to correspond with the two-step (or two-part) analysis from Alice Corp. v. CLS Bank Int'l (which was set forth earlier in Mayo Collaborative Services v. Prometheus Laboratories, Inc.).
In discussing Step 2A of the above analysis, the memorandum states that when an examiner makes a subject matter eligibility rejection and determines that a claim is directed to an abstract idea, "the rejection should identify the abstract idea as it is recited (i.e., set forth or described) in the claim and explain why it corresponds to a concept that the courts have identified as an abstract idea," and similarly, when an examiner makes a subject matter eligibility rejection and determines that a claim is directed to a law of nature or a natural phenomenon, "the rejection should identify the law of nature or natural phenomenon as it is recited (i.e., set forth or described) in the claim and explain using a reasoned rationale why it is considered a law of nature or natural phenomenon." As for Step 2B of the analysis, the memorandum states that an examiner's rejection "should identify the additional elements in the claim and explain why the elements taken individually and in combination do not amount to a claim as a whole that is significantly more than the exception identified" in carrying out Step 2A of the analysis (emphasis in original).
• explain the reason(s) that the additional elements taken individually, and also taken as a combination, do not result in the claim as a whole amounting to significantly more than the judicial exception [emphasis in original].
Sample explanation: The claim recites the steps of sorting information by X, which is an abstract idea similar to the concepts that have been identified as abstract by the courts, such as organizing information through mathematical correlations in Digitech or data recognition and storage in Content Extraction.
Sample explanation: The claim recites the correlation of X, and X is a law of nature because it describes a consequence of natural processes in the human body, e.g., the naturally-occurring relationship between the presence of Y and the manifestation of Z.
Sample explanation: The claim recites X, which is a natural phenomenon because it occurs in nature and exists in principle apart from any human action.
Sample explanation: The claim recites X, which as explained in the specification was isolated from naturally occurring Y. X is a nature-based product, so it is compared to its closest naturally occurring counterpart (X in its natural state) to determine if it has markedly different characteristics. Because there is no indication in the record that isolation of X has resulted in a marked difference in structure, function, or other properties as compared to its counterpart, X is a product of nature exception.
With respect to abstract ideas, the memorandum also indicates that "[e]xaminers should not go beyond those concepts that are similar to what the courts have identified as abstract ideas."
It is important to remember that a new combination of steps in a process may be patent eligible even though all the steps of the combination were individually well known and in common use before the combination was made (Diehr). Thus, it is particularly critical to address the combination of additional elements, because while individually-viewed elements may not appear to add significantly more, those additional elements when viewed in combination may amount to significantly more than the exception by meaningfully limiting the judicial exception [emphasis in original].
As for an examiner's determination that particular claim limitations are well-understood, routine, or conventional, the memorandum points out that a rejection "should explain why the courts have recognized, or those in the relevant field of art would recognize, those claim limitations as being well-understood, routine, conventional activities," but notes that "even if a particular laboratory technique was discussed in several widely-read scientific journals or used by a few scientists, mere knowledge of the particular laboratory technique or use of the particular laboratory technique by a few scientists is not sufficient to make the use of the particular laboratory technique routine or conventional in the relevant field."
As for the evaluation of an applicant's response to a subject matter eligibility rejection, the memorandum indicates that claim amendments adding an additional element "may be enough to qualify as 'significantly more' if [the additional element] meaningfully limits the judicial exception, improves another technology or technical field, improves the functioning of a computer itself, or adds a specific limitation other than what is well-understood, routine, conventional activity in the field or unconventional steps that confine the claim to a particular useful application." Moreover, the memorandum states that "even if an element does not amount to significantly more on its own . . . , it can still amount to significantly more when considered in combination with the other elements of the claim."
Finally, for responses in which an applicant argues that a claim does not preempt all applications of the judicial exception, the memorandum states that "an appropriate response would be to explain that preemption is not a standalone test for eligibility." The memorandum indicates that "[q]uestions of preemption are inherent in and resolved by the two-part framework from Alice Corp. and Mayo, as explained by the Federal Circuit in OIP and Sequenom," adding that "while a preemptive claim may be ineligible, the absence of complete preemption does not demonstrate that a claim is eligible."
With respect to the new life sciences examples, the Office notes that they provide exemplary subject matter eligibility analyses of hypothetical claims and claims drawn from case law, and that the examples are intended as a teaching tool to assist examiners and the public in understanding how the Office would apply the eligibility guidance in certain fact-specific situations. (The May 4 memorandum reminds examiners that the examples "are intended to show exemplary analyses only and should not be used as a basis for a subject matter eligibility rejection or relied upon in the same manner as a decision from a court," and adds that "while it would be acceptable for applicants to cite an example in support of an argument for finding eligibility in an appropriate factual situation, applicants should not be required to model their claims or responses after the examples to attain eligibility.") The new life sciences examples, which are numbered 28-33 (33 being the total number of examples that the Office has issued to date), cover vaccines (ex. 28), diagnosing and treating julitis (ex. 29), dietary sweeteners (ex. 30), screening for gene alterations (ex. 31), a Fourdrinier (paper-making) machine (ex. 32), and a process of hydrolyzing fat (ex. 33). Patent Docs will provide summaries of the additional life sciences examples in subsequent posts.
The final document released with the May 2016 Update is an updated version of the Appendix of Supreme Court and Federal Circuit decisions that was previously provided with the July 2015 Update (i.e., Appendix 3). The list of subject matter eligibility court decisions (formerly Appendix 3) can be found here. The Office notes that the list of court decisions will continue to be updated to include Federal Circuit decisions without opinion (Fed. Cir. R. 36) on appeals originating from the Patent Trial and Appeal Board (PTAB), but will not be updated to include Federal Circuit decisions without opinion affirming a district court decision as the latter "provide little benefit to examiners or the public."
The Office also notes that the documents released with the May 2016 Update "were developed as a matter of internal Office management and are not intended to create any right or benefit, substantive or procedural, enforceable by any party against the Office." As such, the notice indicates that the failure of Office personnel to follow any of the guidance materials does not form a proper basis for either an appeal or a petition.
Finally, in the May 2016 Update, the Office indicates that it continues to seek public comment on subject matter eligibility and that the "[t]he comment period is open-ended, and comments will be accepted on an ongoing basis." In view of the Office's commitment to enhancing the quality of examination, the notice also indicates that the Office is particularly interested in obtaining comments addressing any progress the Office is making with respect to the quality of correspondence regarding subject matter eligibility rejections. Comments can be sent by e-mail to: 2014_interim_guidance@uspto.gov. Because comments will be made available for public inspection, those submitting comments should not include information (e.g., addresses or phone numbers) that submitters do not wish to make public.
In future posts, Patent Docs intends to discuss selected life sciences examples that were released with the May 2016 Update.
Boehringer Ingelheim Pharma GmbH & Co. KG et al. v. Hetero USA, Inc. et al.
• Plaintiffs: Boehringer Ingelheim Pharma GmbH & Co. KG; Boehringer Ingelheim International GmbH; Boehringer Ingelheim Pharmaceuticals, Inc.
• Defendants: Hetero USA, Inc.; Hetero Labs Ltd. Unit-III; Hetero Labs Ltd.
Infringement of U.S. Patent No. 6,087,380 ("Disubstituted Bicyclic Heterocycles, the Preparations and the Use Thereof as Pharmaceutical Compositions," issued July 11, 2000) following a Paragraph IV certification as part of Hetero's filing of an ANDA to manufacture a generic version of Boehringer's Pradaxa® (dabigatran etexilate mesylate, used to reduce the risk of stroke and systemic embolism in patients with non-valvular atrial fibrillation). View the complaint here.
Amneal Pharmaceuticals LLC v. GlaxoSmithKline LLC et al.
Declaratory judgment of non-infringement of U.S. Patent Nos. 8,637,512 ("Formulations and Method of Treatment," issued January 28, 2014) and 9,144,547 ("Oral Dosage Form for Controlled Drug Release," issued September 29, 2015) based on Amneal's filing of an ANDA (and Paragraph IV certification) to manufacture a generic version of GSK's Lamictal XR® (lamotrigine, used as adjunctive therapy for primary generalized tonic-clonic seizures and partial-onset seizures with or without secondary generalization in patients aged 13 years and older and as conversion to monotherapy in patients aged 13 years and older with partial-onset seizures who are receiving treatment with a single AED). View the complaint here.
Novartis AG et al. v. Mylan Pharmaceuticals Inc. et al.
• Plaintiffs: Novartis AG; Novartis Pharmaceuticals Corp.; Mitsubishi Tanabe Pharma Corp.; Mitsui Sugars Co., Ltd.
• Defendants: Mylan Pharmaceuticals Inc.; Mylan, Inc.
Senju Pharmaceutical Co., Ltd. et al. v. Hi-Tech Pharmacal Co. Inc. et al.
• Plaintiffs: Senju Pharmaceutical Co., Ltd.; Bausch & Lomb Inc.; Bausch & Lomb Pharma Holdings Corp.
• Defendants: Hi-Tech Pharmacal Co. Inc.; Akorn, Inc.; Akorn Ophthalmics, Inc.
Infringement of U.S. Patent Nos. 8,129,431 ("Aqueous Liquid Preparation Containing 2-amino-3-(4-bromobenzoyl)phenylacetic acid," issued March 6, 2012), 8,669,290 (same title, issued March 1, 2014), 8,754,131 (same title, issued June 17, 2014), 8,871,813 (same title, issued October 28, 2014), 8,927,606 (same title, issued January 6, 2015), and 9,144,609 (same title, issued September 29, 2015) following a Paragraph IV certification as part of Hi-Tech's filing of an ANDA to manufacture a generic version of B&L's Prolensa® (bromfenac ophthalmic solution, used to treat postoperative inflammation and reduction of ocular pain in patients who have undergone cataract surgery). View the complaint here.
Par Pharmaceutical, Inc. et al. v. Luitpold Pharmaceuticals, Inc. et al.
• Defendants: Luitpold Pharmaceuticals, Inc.; Daiichi Sankyo, Inc.; Daiichi Sankyo Company, Ltd.
The complaints in these cases are substantially identical. Infringement of U.S. Patent Nos. 9,119,876 ("Epinephrine Formulations," issued September 1, 2015) and 9,295,657 (same title, issued March 29, 2016) following a Paragraph IV certification as part of Luitpold's filing of an ANDA to manufacture a generic version of Par Sterile's Adrenalin® (epinephrine injection, used to treat anaphylaxis and for induction and maintenance of mydriasis during intraocular surgery). View the New Jersey complaint here.
Infringement of U.S. Patent Nos. 8,071,644 ("Combinations of Adapalene and Benzoyl Peroxide for Treating Acne Lesions," issued December 6, 2011), 8,080,537 (same title, issued December 26, 2011), 8,129,362 ("Combination/Association of Adapalene and Benzoyl Peroxide for Treating Acne Lesions," issued March 6, 2012), 8,445,543 ("Combinations of Adapalene and Benzoyl Peroxide for Treating Acne Lesions," issued May 21, 2013), and 8,809,305 ("Administration of Adapalene and Benzoyl Peroxide for the Long-Term Treatment of Acne Vulgaris," issued August 19, 2014) following a Paragraph IV certification as part of Tolmar's filing of an ANDA to manufacture a generic version of Galderma's Epiduo® Gel (adapalene and benzoyl peroxide, used to treat acne vulgaris). View the complaint here.
Sanofi-Aventis U.S. LLC et al. v. Dr. Reddy's Laboratories, Inc. et al.
• Defendants: Dr. Reddy's Laboratories, Inc.; Dr. Reddy's Laboratories, Ltd.
Infringement of U.S. Patent No. 5,847,170 ("Taxoids, Their Preparation and Pharmaceutical Compositions Containing Them" issued December 8, 1998) following a Paragraph IV certification as part of DRL's filing of an ANDA to manufacture a generic version of Sanofi's Jevtana® (cabazitaxel injection, used in combination with prednisone for the treatment of patients with hormonerefractory metastatic prostate cancer previously treated with a docetaxel-containing treatment regimen). View the complaint here.
• Plaintiffs: AbbVie Inc.; AbbVie Biotechnology Ltd.
An agenda for the conference can be found here. A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, and list of speakers can be obtained here.
The registration fee for the conference is $2,095. Those interested in registering for the conference can do so here [http://exlevents.com/3rd-due-diligence-summit-for-life-sciences/pricing/].
Patent Docs is a media partner of the Due Diligence Summit for Life Sciences.
• What is the basis of the challenge to the pending application?
• What role does this have in determining the path of the pre-grant challenge?
• What are the potential risks involved in challenging a pending patent application?
• What factors should counsel consider when determining when and where to challenge a pending application?
• 102 and its dates: is there a "grace period"?
• Analyzing "old" 102: Is it really gone or is it preserved in other forms?
• Application of the new 101 and 103 guidance post-Myriad, Mayo, Alice and KSR retrospectively.
• KSR and 103: Tools you can use?
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"You Can Arrange the Menu, the Venue, the Seating"
The above slightly-modified quote is from a lyric sung by Thomas Jefferson in the Tony-award nominated musical "Hamilton" (with apologies to Lin Manual Miranda) -- the song being one that highlights the behind-closed-doors political horse-trading that helped establish the young nation. Of course, as the first Secretary of State, Thomas Jefferson was essentially the first Commissioner of Patents, but unfortunately Mr. Miranda did not include a song describing the awarding of the first patent on July 31, 1790. Fast forward more than 225 years, and the subject of venue for patent infringement lawsuits is still being questioned. (OK, we will admit that the relationship of this case to the Hamilton musical is a stretch, but come on -- 16 Tony nominations!). In a recent case, In re TC Heartland, the Federal Circuit concluded that Congress did not restrict what could be considered a proper venue when it passed the Federal Courts Jurisdiction and Venue Clarification Act of 2011. Perhaps not completely coincidentally, Congress is currently considering doing just that -- restricting venue for patent suits -- with S. 2733, the "Venue Equity and Non-Uniformity Elimination Act of 2016," in an effort to restrict so-called "patent trolls" from using favorable districts that are otherwise only tangentially related to the cause of action. We have previously highlighted that bill and its potential implications (see "The VENUE Act -- A Last-Ditch Attempt at Patent Reform?").
The In re TC Heartland case stemmed from a lawsuit brought by Kraft Foods Group Brands LLC against TC Heartland, LLC and Heartland Packaging Corp. in the U.S. District Court for the District of Delaware. TC Heartland is incorporated in Indiana, and has its headquarters in Carmel, Indiana. In fact, other than approximately 2% of its alleged infringing product ending up in Delaware, TC Heartland argued that it had no other contacts with that state. As a result, it moved to either dismiss the complaint for lack of personal jurisdiction, or to dismiss the action on venue grounds or transfer venue to the Southern District of Indiana. On August 13, 2015, Magistrate Judge Burke had recommended denying the motion, and Chief Judge Stark subsequently adopted the report in all respects. TC Heartland followed that up with a petition to the Federal Circuit for a writ of mandamus to either dismiss or transfer the case.
(2) an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question and, if a plaintiff, only in the judicial district in which it maintains its principal place of business.
28 U.S.C. § 1391(c). Initially, in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), the Supreme Court held that the general statute does not override the specific statute, and therefore the residence of an accused infringing corporation was its place of incorporation. In 1988, Congress amended 28 U.S.C. § 1391 to add "[f]or the purposes of venue under this chapter" before the beginning of the above-quoted language. As such, the Federal Circuit held in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), that § 1391(c) now governs the definition of "resides" in 1400(b). This made any forum available for a patent infringement action, provided the district court had personal jurisdiction over the defendant. Finally, as previously mentioned, Congress subsequently passed the Federal Courts Jurisdiction and Venue Clarification Act of 2011, making two changes relevant to the present case. First, the newly added language was changed to read "[f]or all venue purposes," and second, § 1391(a) was amended to include the language: "Applicability of section. -- Except as otherwise provided by law."
First, TC Heartland argued that by removing the language "[f]or purposes of venue under this chapter," Congress meant to overturn the VE Holding decision. After all, the argument went, the Federal Circuit in that case had relied heavily on that language in its opinion in that case. Of course, the Federal Circuit pointed out that the new language ("[f]or all venue purposes") was broadening, and not narrowing. As such, the Court found that Congress did not make any change to the definition of corporate residence as provided for in § 1400.
Second, TC Heartland argued that by including the "applicability" section above, Congress meant to include federal common law within the "otherwise provided by law" exception. Without deciding whether this was correct, the Federal Circuit pointed out that TC Heartland's position relied on an alleged intent of Congress to codify the Supreme Court's Fourco Glass decision. The flaw in this logic, the Federal Circuit pointed out, was that Fourco Glass was no longer the law because of the intervening 1988 amendment and the Federal Circuit's VE Holding case. In other words, "the common law definition of corporate residence for patent cases was superseded by a Congressional one." There was, therefore, no longer any federal common law that could be codified by the new language. The Federal Circuit also noted that TC Heartland provided no evidence that Congress meant to codify Fourco Glass.
Finally, TC Heartland alleged that the Supreme Court redefined what the venue statute meant in Atlantic Marine Const. Co. v. U.S. Dist. Court for W. Dist. Of Texas, 134 S. Ct. 568 (2013). The relevant language was quoted in its entirety by the Federal Circuit in the present case: "Section 1391 governs 'venue generally,' that is, in cases where a more specific venue provision does not apply. Cf., e.g., § 1400 (identifying proper venue provision for copyright and patent suits)." This language was from a footnote, and was characterized by the Federal Circuit as dicta. More importantly, the Federal Circuit pointed out that the general statute of § 1391(c) was not replacing by § 1400, because it could not do so, but rather this section only operates to define where a corporation resides, when that term is found within § 1400.
TC Heartland also alleged that the case should have been dismissed because of a lack of personal jurisdiction. Barring that, TC Heartland argued, the Delaware Court should only have specific personal jurisdiction over 2% of the case based on TC Heartland's sales that ended up in the state. The Federal Circuit pointed out that the Beverly Hills Fan case was controlling, and that it was bound to follow it. Nevertheless, the Court did point out that, if TC Heartland was correct, then "to resolve nationwide the same issues as in this Delaware infringement suit, Kraft would have to bring separate suits in all other states in which Heartland's allegedly infringing products are found." It is not surprising that the Court did not adopt such a rule of personal jurisdiction.
As mentioned above, and as we previously reported, certain members of Congress are seeking to make changes to the venue statute along lines similar to those argued by TC Heartland. In fact, most likely a function of coincidence, Judge Moore during oral argument commented that the changes TC Heartland was seeking might be more appropriately made by Congress. Within days of that comment, the VENUE bill was introduced. Interestingly, Judge Moore, who wrote the opinion, cited the introduction of the VENUE bill as evidence that Congress did not intend to codify Fourco in the 2011 amendments. This argument would appear circular at best, and a case of the tail wagging the dog at worst. Still, even though the provision appears to have support from both parties, with the election year in full swing it is unlikely that any headway will be made on the VENUE bill until at least 2017.
On April 27th, the U.S. Patent and Trademark Office held a Patent Quality Community Symposium at the Office in Alexandria, VA (consistent with its efforts to disseminate its workforce into regional offices, the offices in Detroit, Dallas, Boulder and Palo Alto participated by video conference). The Symposium was timed to coincide with the first anniversary of the inauguration of the Office's quality initiative; details of that initiative can be found on the USPTO website; a recording and slides for the Symposium can be found here.
The Symposium opened with a welcome by Valencia Martin Wallace, Deputy Commissioner for Patent Quality, followed by Opening Remarks by Michelle Lee, Under Secretary of Commerce for Intellectual Property and Director of the USPTO. Director Lee's comments were, appropriately, brief and aspirational. She spoke of the Office making "sensible enhancements" to quality, assuring the audience that "all ideas would be considered, big and small." These ideas included ensuring clarity of the record, using internal quality control to ensure correctness of the Office's decisions, and identifying the best prior art by work-sharing with other patent offices. These enhancements also included creation of the position of Deputy Commissioner for Patent Quality.
The Director was followed by a discussion of enhancements to searching and training, presented by Maria Holtmann, Director of International Programs and Don Hajec, Assistant Deputy Commissioner for Patent Operations. These enhancements include automated searches, to save time and give examiner prior art, using "adaptive technology" and eliminating "insofar as possible" subjectivity (and presumably variability) in an Art Unit examiner to examiner. Also discussed was the Office of International Patent Cooperation (OIPC), which facilitates cooperation with other Patent Offices. The Office is currently operating pilot programs with the Japanese (JPO) and Korean (KIPO) offices; in these programs, search results are shared with applicants prior to initial examination, with a stated goal of promoting consistency and earlier decisions. There are five offices participating in the "global dossier" program (the European (EPO) and Chinese (SIPO), in addition to the JPO, KIPO and USPTO), and the Office has solicited input from the AIPLA, IPO, and WIPO on this program. The speakers characterized these efforts as providing a "one-stop" access for all applications in these countries for examiners and the public; the examiners have an additional site having the same data. The hope is for consistency and the ability to find "hard-to-find" foreign art.
Mr. Hajec spoke about improving the extent to which Office personnel understand the underlying technology. These efforts include electronic information centers for non-patent literature; chat rooms; access to foreign art, biotech sequences, and translations; and technical and legal training for examiners. This is provided by outside technology professionals on a pro bono basis (and suggests a method for introducing examiners to new technology that could, under the right circumstances, facilitate prosecution of applications). Also mentioned was the Site Experience Education (SEE) program, where examiners visit companies and other technology centers for meetings with inventors and technologists. The Office has allocated $10K for examiner training (budget dependent) and stakeholder training on patenting process (STEPP) led by PTO trainers and training materials. Current Office efforts in this regard involve training on the proper application of 35 U.S.C. § 112(f), with plans to extend this to explication of the broadest reasonable interpretation standard, written description, enablement, and indefiniteness, and further plans to improve the clarity and consistency of reasons for allowance. Somewhat ominously Mr. Hajec mentioned workshops on patent eligibility.
Next up was Robin Evans, Director, Technology Center 2800 who spoke about prosecution enhancements, particularly efforts to improve the clarity of the record. These include the After Final program (which Ms. Evans said was "very popular"); the Patent Ombudsman program, with 1900 inquiries answered per week; and interviews, which increased from an average of 13 hours to 27 hours per examiner from 2008-2015 (and with 30% of disposals having had interviews, albeit without specifying whether this included abandonments). The use of WebEx and the regional offices were cited as factors related to this increase in interviews. She also mentioned the use of e-Petitions and references on the Office website concerning contact persons and links to statistics regarding success of different types of petitions under various circumstances. Finally, in her talk she returned to the theme of improving the clarity of the record using a pilot program beginning in March and running until August with 130 randomly selected examiners and 45 SPEs. This program is aimed at 1) enhanced claim interpretation; 2) more precise reasons for allowance; 3) better interview summaries; and 4) pre-exam interview at the examiner's option regarding search. The examiners in the program will be given specific training and their outcomes will be compared with a control group of examiners not involved in the program; this comparison will be performed by QEM managers. The program will also track the time it takes to provide these enhancements.
Jack Harvey, Acting Assistant Deputy Commissioner for Patent Operations spoke about using outcomes from PTAB review of granted patents to improve patent examination. He spoke of developing a "feedback loop" in later related applications based on patents having undergone post-grant review; he also discussed expanding this program to include litigation results. In a pilot program, examiners of such "child" applications will be given access to the art cited in such reviews as well as expert testimony and the parties' arguments. This program was launched in the last week of April involving about 400 applications.
Brian Hanlon, Director of the Office of Patent Legal Administration and Russ Slifer, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO furthered the discussion of improving examination and evaluation of examination. The metrics cited by these speakers included clarity, transparency and simplicity, and focused on a new metric instrument, the Master Review Form (which participants had an opportunity to use in an after-lunch workshop). They also discussed case studies to be focused on single issues performed by the Office but to include stakeholders' experience (and thus to be different from current quality assurance reviews). These initial efforts will be focused on Sec. 101 eligibility and compliance with guidelines; consistency between Art Units regarding how Sec. 101 is being applied; "compact prosecution" related to Sec. 101 (which was explained to mean first Office Actions without art being cited, on the basis that if the examiner could establish ineligibility then citation of (and searching for) prior art would be a waste of resources); clarity with regard to the motivation to combine references in Sec. 103 rejections; reviewing compliance with the written description requirement in continuation applications; and the consistency of how the Office applies Sec. 112(f) before and after examiner training. These initial areas of Office focus were culled from 130 suggestions by 110 stakeholders, according to these officials. Mr. Slifer specifically presented how the Office was using big (and open) data to evaluate patent quality, related to publicly available data; data accessibility is being provided by a developer website. These data will be used to identify inconsistencies, measure training impact, validate assumptions and identify problems, according to Mr. Slifer.
Marty Rater, Chief Statistician, Office of Patent Quality Assurance spoke on quality metrics as a means for measuring improved patent quality. This discussion focused on the Master Review Form and Mr. Rater presented the Office's metrics of preventing reopening of prosecution, reducing rework and having consistent decision making, wherein the outliers are reduced but eliminating anomalies is not a practical goal. He mentioned that the Office wanted stakeholder and other feedback, and in this regard had reinstituted an external quality survey directed at "frequent filers," i.e., applicants filing six or more applications per year. Mr. Rater noted some outcomes (such as a reduction in the quality of rejections under Sec. 101) and spoke about perceived consistencies (vel non). These statistics included only 20% of respondents believing there was no inconsistency in how patentability standards were applied, but that the perception of patent quality was increasing from 2006-2015 (from 31% to 54% believing quality was good, and 21% to 9% believing it was bad).
This discussion was the prelude to an interactive session where participants were given an examination fact pattern and then used the Master Review Form to rate the quality of the examination. As part of this exercise the Office solicited suggestions for improvement as well as identification of those aspects of the form that were the most likely to improve patent quality.
The last session of the day was a practitioner panel moderated by Mr. Slifer; the panel included Rick Nydegger, Workman Nydegger; Bill Bunker, Knobbe Martens; Laura Sheridan, Google; Tim Wilson, SAS; and this author. Panel members varied in their comments, with some members stating their belief that the quality of patent specifications was poor and others contending that applicants had an incentive to seek overbroad claims having vague terms. This author noted that these concerns may be technology specific to some degree; in the biotech and pharma space the rigorous application of Sec. 101 (utility) and 112 (written description) reduces any tendency for vague or overbroad claims to be sought, and the value of these patents (due to their long obsolescence horizons) put a premium on obtaining patents whose validity would withstand challenge.
The day concluded with remarks by Drew Hirshfeld, Commissioner for Patents, who spoke about his impressions of the efforts PTO employees make to ensure patent quality today and throughout his time at the Office.
Patent quality is one of those topics, like Mom and apple pie that almost everyone believes in and supports. However it is also a politically charged topic, and many assert that U.S. patent quality is poor. Notably, however, no one ever complains that the quality of the patents they are getting is poor; rather it is always someone else (frequently a competitor) who is getting such poor quality patents. That is the nature of an exclusionary right: the people who are excluded are usually not happy about it and would like to believe that such exclusion is unwarranted. There can be no doubt that efforts by the Office to improve clarity and correctness in the patenting process are important, but coming up with appropriate and useful metrics for assessing the patent quality metrics discussed during the Symposium is a much harder task.
On April 15, 2016, the U.S. District Court for the Northern District of California issued an Order Denying a Motion to Dismiss because the patent at issue, U.S. Patent No. 5,870,087, was found to be directed to patent eligible subject matter.
The '087 patent, entitled "MPEG Decoder System and Method having a Unified Memory for Transport Decode and System Controller Functions," is directed to methods for reconstructing frame data for memory saving benefits. Full-motion digital video requires a large amount of storage and data transfer bandwidth. Thus, video systems use various types of video compression algorithms to reduce the amount of necessary storage and transfer bandwidth. Prior art MPEG video decoder systems have generally included a separate memory for transport and system controller functions. The '087 patent describes that it has generally not been possible to combine these memories, due to size limitations. Thus, the '087 patent describes new ways to reconstruct frame data that enables saving memory and usage of a single memory for the MPEG decoder system.
Claim 10 is representative and reproduced below.
wherein said demultiplexing one or more multimedia data streams, said performing MPEG decoding, and said controlling operations each use said first unified memory.
The Defendant filed the Motion to Dismiss alleging that claims 1, 5, 7-11, and 16 of the '087 patent are invalid under 35 U.S.C. § 101 as not being directed to patent eligible subject matter.
The District Court followed the Supreme Court's two-step framework for determining whether there is § 101 patent invalidity. First, it is determined whether the claims at issue are directed to a patent-ineligible concept -- i.e., a law of nature, a natural phenomenon, or an abstract idea. If so, then the court moves on to the second step, that is, to determine if the additional elements beyond the patent-ineligible concepts (if any) transform the nature of the claim into a patent-eligible application (i.e., a search for an inventive concept -- that is, an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself).
The Defendant asserted § 101 patent invalidity on the basis that the claims at issue are trying to patent an abstract idea, or an idea having no particular concrete or tangible form -- namely, integrating multiple memories into a single/unified memory.
As seen in many court orders and decisions, the District Court here complained that the step one inquiry may be a complicated matter if only because it is not clear what abstract means in the first place, and the step one inquiry is further complicated by the fact that it is not always easy to say what a patent claim is "directed to."
The District Court stated a summary of prior decisions that attempted to define how to perform step one including (1) that a court must consider the claims "in their entirety to ascertain whether their character as a whole is directed to excluded subject matter"; (2) a court must identify and define whatever fundamental concept appears wrapped up in the claims; (3) a court must identify the purpose of the claim -- in other words, determine what the claimed invention is trying to achieve; (4) a court should recite a claim's purpose at a reasonably high level of generality; and (5) a court should apply step one as a sort of quick look test, the purpose of which is to identify a risk of preemption and ineligibility.
[T]he purpose of the claims at issue is to decompress digital video using a single memory. That is the gist of the invention at issue. Given this purpose, the Court is satisfied that there is no genuine risk of preempting future research and development -- i.e., Avago is not simply claiming an abstract idea in the attempt to lay claim to a building block of future research and development; the invention has specific configuration, not a broad abstract idea.
The District Court did not extrapolate further into the analysis, but rather stated that because the Defendant failed to establish that the claims at issue are directed to a patent-ineligible concept, i.e., an abstract idea, the Court need not address step two of Alice which embodies the inventive concept test.
Thus, Defendant's Motion to Dismiss based on a challenge to the validity of the '087 patent under 35 U.S.C. § 101 was denied.
Looking at the reasoning given by the Court of the "purpose of the claims at issue is to decompress digital video using a single memory", it is hard to see how this was not found to be an abstract idea. Step one of the Alice test has been considered easy to show, and most courts have given little weight to any arguments, but instead focus on the step two inventive concept analysis. But here, the District Court used preemption as reasoning to support a finding that the claims were not directed to an abstract idea. Use of preemption as a sole reason to support patent eligibility is rare and against the USPTO guidelines.
The Federal Circuit has followed the Supreme Court's lead in rejecting arguments that a lack of total preemption equates with eligibility, at least within buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014), and Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014). Even though the District Court in this case found preemption arguments persuasive, the '087 patent claims are likely to be challenged again.
All claimed components, other than the integrated memory, appear to be admitted by the '087 Patent to be well known in the art, as indicated in the '087 patent's own "MPEG BACKGROUND" section. Thus, had step one of the Alice test been found to be true (i.e., the claims are directed to an abstract idea), then the claims most likely would have also failed step two (i.e., inventive concept) and would have been found to be patent ineligible.
Patent Docs thanks Kaye Scholer for making copies of the briefs available on its website. Summaries of selected briefs will be provided in future posts.
In a notice published in the Federal Register (81 Fed. Reg. 16142) last month, the U.S. Patent and Trademark Office announced that new patent quality metrics were being designed for use in FY2017 and that the Office was seeking comments from stakeholders regarding the new metrics. The new patent quality metrics will focus on the correctness and clarity of Office actions, which will be assessed through the use of a standardized review form. The new metrics and review form are being developed as part of the Office's Enhanced Patent Quality Initiative.
The Office's notice provides a brief overview of the development of patent quality assessment at the USPTO, noting that prior to FY2005, "the USPTO quality metric was solely directed to the correctness of the final output of the examination process that would result in a patent: An allowed application." From FY2005 to FY2009, the Office employed two quality metrics, evaluating the correctness of an examiner's determination of an application's allowance of an application and the quality of the actions taken during the course of examination. In FY2010, these two metrics were modified to also focus on final Office actions and the quality of non-final Office actions during prosecution, with quality analysis performed on randomly selected actions by the USPTO's Office of Patent Quality Assurance (OPQA). OPQA reviewers examined selected actions to determine whether all required claim rejections were properly made in compliance with U.S. patent law. From FY2011 to FY2015, the Office employed a Composite Quality Metric, which provided a single comprehensive metric representing the overall state of patent examination quality, and which was composed of seven total factors: (1) The final disposition review, (2) the in-process review, (3) the first action on the merits (FAOM) search review, (4) the complete FAOM review, (5) the external quality survey, (6) the internal quality survey, and (7) an aggregation of five factors from the USPTO's Quality Index Report (QIR). The Office's QIR metric uses a statistical analysis of occurrences of certain types of events (e.g., reopening after final Office actions, consecutive non-final Office actions, consecutive restriction requirements) based on data available through the USPTO’s Patent Application Locating and Monitoring (PALM) system.
Since the launch of the USPTO's Enhanced Patent Quality Initiative, the Office has been focusing on improving the internal metrics used to evaluate patent examination quality and on improving the communication of patent examination quality measurements to the public. As part of the Initiative, the Office has proposed new metrics for use in FY2017. The new metrics will continue to assess the correctness of an examiner's determinations in a given Office action, with increased attention on assessing whether the examiner clearly set forth his or her reasoning in a given Office action. In addition, the Office will continue to review randomly selected actions for improperly made rejections and for failure to make rejections where required by statute, as well as assessing the propriety of the examiner's search, any interpretation of claim language under 35 U.S.C 112(f), any determination that an action is made final, any restriction or election of species requirement, the sufficiency of the recordation of any interview, and the propriety of any reasons for allowance of an application.
In assessing the above factors, the Office will employ a single standardized review form, the Master Review Form, which will contain criteria for recording the correctness for each of the substantive patentability requirements, and for recording the clarity of each of those decisions and the supporting rationales set forth in the Office action under review. A list of the correctness and clarity items in the draft proposed version of the Master Review Form can be found here. The Office's notice requests feedback from stakeholders regarding the elements of the proposed Master Review Form.
(1) Whether the USPTO is moving in the right direction by choosing to focus on two core metrics: A work product metric representing correctness of actions, and a clarity metric that more thoroughly explores the sufficiency of the examiner’s reasoning in an Office action.
(2) Which of the proposed clarity and correctness review items in the proposed standardized Master Review Form should be used as the key drivers of patent examination quality metrics?
(3) How can patent metrics best provide objective, rather than subjective, measurements of quality- related features in clarity and correctness reviews?
The Office's notice indicates that written comments from stakeholders must be received on or before May 24, 2016. Comments should be sent by e-mail to: QualityMetrics2017@uspto.gov or by regular mail addressed to: Mail Stop Comments—Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA, 22313–1450, marked to the attention of Michael Cygan, Senior Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy. The Office requests that comments include the name and affiliation of the individual submitting the comments and an indication of whether the comments represent the views of the individual or the individual's organization. Submitted comments will be made available here.

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