Source: http://271patent.blogspot.com/2009/05/
Timestamp: 2019-04-18 18:42:50+00:00

Document:
said computing means in said network being responsive to the excess payment for apportioning, at least a part of the excess payment amount said accounts on the basis of the excess determined and established by the payor and on the basis of commands established by the payor and controlled by other than the payee.
means,” and a “computing means,” the patent is a “machine” under the above definition.
Simply because the process at issue requires machines or computers to work, however, does not mean that the process or system is a machine. See, e.g., Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972) (finding that “the mathematical formula involved here has no substantial practical application except in connection with a digital computer” and was therefore not eligible for a patent). The “system” described by the 191 patent “has no substantial practical application except in connection with” computers, cash registers, and networks, but it is not comprised of those devices. The 191 patent is a process, not a machine.
Bilski emphasized that the use of a machine in the process in question was not particularly relevant in determining whether that process was patent-eligible. Rather, a Court must examine whether “the use of a specific machine . . . impose[s] meaningful limits on the claim’s scope” and whether “the involvement of the machine in the claimed process [is] merely. . . insignificant extra-solution activity.” Id. at 961-62. In the process claimed by the 191 patent, a mathematical algorithm uses machines for data input and data output and to perform the required calculations. Those machines do not, however, impose any limit on the process itself. The involvement of the machine in the process is insignificant extrasolution activity and thus the process is not patentable under §101.
The 191 patent is invalid unless it “is tied to a particular machine” or “transforms a particular article into a different state or thing.” Bilski, 545 F.3d at 954. EPC does not argue that the 191 patent transforms any article into something different. Thus, the patent is valid only if it is tied to a particular machine. Because it is beyond question that the patented process is not tied to a particular computer or other device, the process embodied by the 191 patent is invalid under § 101.
contends that BOA changed some of the patent application language after the PTO raised Bilski issues. BOA cannot have its cake and eat it, too. If the EPC patent is invalid because it is not patentable subject matter, then the very similar process used by Keep the Change is likewise invalid.
Gene Quinn over at IP Watchdog is ranking the top patent/IP blogs. Feel free to pop over and let Gene know (1) your favorite patent/IP blog, and (2) other patent/IP blogs you read. Voting will continue through the end of June 2009, where the results will be tabulated and reported sometime at the beginning of July 2009.
under the statute ("not more than $500 for every such offense”), the person suing is to receive one-half and the United States is to receive the other half. Section 292 has long been treated as a qui tam provision, meaning that the statute authorizes someone to pursue an action on behalf of the government as well as himself/herself.
Naturally, this section induces some chin-scratching for opportunistic plaintiffs; one can readily envision high-volume products, erroneously marked with one or more expired/lapsed patents, serving as fodder for litigation.
In this case, Stauffer, who is a patent attorney and pro se plaintiff, sued Brooks Brothers for violation of § 292, arguing that certain elements of an adjustable necktie were labeled as being protected by patents that have long expired (the most recent one issued in 1956) and that defendants "knew or should have known that the patents had expired and that their bow ties therefore were no longer patented articles." Further, plaintiff alleged that "Brooks Brothers has 'wrongfully and illegally advertis[ed] patent monopolies that [defendants] do not possess,' thereby causing harm to the economy of the United States' because the embroidered mark, 'has the potential to, discourage or deter' potential competitors 'from commercializing a competing bow tie.'"
Brooks Brothers moved the court to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(1). In particular, Brooks Brothers contended that Stauffer lacked standing to pursue the action because he has not alleged any injury in fact, and that dismissal pursuant to Rule 12(b)(1) is therefore appropriate.
The district court first addressed whether or not the statute limited "any person" to mean "competitors." The court concluded that it did not.
[W]hile defendants’ are indisputably correct that the vast majority of section 292 claims are brought by competitors rather than consumers, there is nothing in the text of the statute that compels such a result. Pequingnot v. Solo Cup Co., No. 07-cv-897, 2009 U.S. Dist. LEXIS 26020, at *7-8 (E.D. Va. Mar. 27, 2009) (finding the “plain language of the statute” precludes limiting “any person” to “competitors”); Pentlarge v. Kirby, 19 F. 501, 503 (S.D.N.Y. 1884) (Section 292(b) grants a cause of action to “whomsoever it may please to sue”).
Brooks Brothers responds that the alleged injury—which is supported by no additional factual pleadings—is insufficient to establish an injury in fact to the public and therefore, Stauffer does not have standing to bring suit on behalf of the United States. The Court agrees. An injury in fact must be “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” . . . Stauffer’s two conclusory statements set forth above but buried in a forty-page complaint are insufficient to establish anything more than the sort of “conjectural or hypothetical” harm that the Supreme Court instructs is insufficient. In particular, the complaint fails to allege with any specificity an actual injury to any individual competitor, to the market for bow ties, or to any aspect of the United States economy. That some competitor might somehow be injured at some point, or that some component of the United States economy might suffer some harm through defendants’ conduct, is purely speculative and plainly insufficient to support standing . . . Accordingly, Brooks' Brothers' motion to dismiss the complaint is granted.
(3) shall not be construed as validating any patent issued before the date of the enactment of this Act for an invention described in section 101(b) of title 35, United States Code, as amended by this section.
According to the American Institute of Certified Public Accountants, 77 tax strategy patents have been approved and the 129 that are pending "apply to a broad range of areas affecting regular taxpayers, including charitable contributions, estate and gift taxes, pension plans and deferred compensation."
Will the PTO Continuation Rules Find Support at the Supreme Court? Some Are Saying "Absolutely"
Donald Zuhn from the Patent Docs Blog is reporting on various events from this year's BIO Convention. On Wednesday, BIO held session on "A Model Patent Office for the Future -- Promoting and Protecting Investments in Innovation," where various leaders in the patent community discussed issues pertaining to the improving the PTO.
Presuming a CAFC en banc rehearing is denied, the current expectation (i.e., without knowing who will be the next PTO Director) is that a petition for certiorari will certainly be filed.
The CAFC's ruling in Abbott clarified that infringement of a product-by-process claim will occur only when a product meets all of the process limitations recited in the claim. One would presume that the corollary - patentability - would require similar consideration.
Product-by-process claims are not specifically discussed in the patent statute. The practice and governing law have developed in response to the need to enable an applicant to claim an otherwise patentable product that resists definition by other than the process by which it is made. For this reason, even though product-by-process claims are limited by and defined by the process, determination of patentability is based on the product itself. In re Brown, 459 F.2d 531, 535, 173 USPQ 685, 688 (CCPA 1972); In re Pilkington, 411 F.2d 1345, 1348, 162 USPQ 145, 147 (CCPA 1969); Buono v. Yankee Maid Dress Corp., 77 F.2d 274, 279, 26 USPQ 57, 61 (2d Cir.1935).
The patentability of a product does not depend on its method of production. In re Pilkington, 411 F.2d 1345, 1348, 162 USPQ 145, 147 (CCPA 1969). If the product in a product-by-process claim is the same as or obvious from a product of the prior art, the claim is unpatentable even though the prior product was made by a different process. In re Marosi, 710 F.2s 799, 803, 218 USPQ 289, 292-93 (Fed.Cir.1983); Johnson & Johnson v. W.L. Gore, 436 F.Supp. 704, 726, 195 USPQ 487, 506 (D.Del.1977); see also In re Fessman, 489 F.2d 742, 180 USPQ 324 (CCPA 1974).
While not stated in Thorpe, it is generally known that, when the process steps "confer a structure or characteristic of the product which distinguishes it from products made by other processes, the process steps should be considered." In re Garnero, 412 F.2d 276, 279 (CCPA 1979).
While the CAFC majority commented that the Abbott ruling "follows this court’s clear statement in In re Thorpe that 'product by process claims are limited by and defined by the process'" (slip op. p. 18), it appears this quote is taken out of context, as the full quote (highlighted above) states that "even though product-by-process claims are limited by and defined by the process, determination of patentability is based on the product itself" - which appears to mean something different from from the majority interpretation.
Indeed, the USPTO has been tacking its rejection of product-by-process claims using Judge Newman's interpretation of Thorpe - since the beginning of this year, the BPAI has issued roughly 35 rejections of product-by-process claims using Thorpe, and they don't appear to be construing the claims pursuant to the Abbott majority.
While considering an appeal of a claim construction ruling from the Eastern District of Virginia, the court suddenly found itself faced with a dilemma regarding the construction of certain product-by-process claims: the plaintiff argued that the district court erred in construing the process steps of the claims by using rule in Atlantic Thermoplastics, 970 F.2d at 846-47, which stated that "process terms in product-by-process claims serve as limitations in determining infringement." According to the plaintiff, the proper construction lied with Scripps Clinic & Research Foundation v. Genentech, Inc., 927 F.2d 1565, 1583 (Fed. Cir. 1991), which stated that "the correct reading of product-by-process claims is that they are not limited to product prepared by the process set forth in the claims."
Acting sua sponte, (or as Professor Crouch puts it: "en banc sua sponte sub secretum") the CAFC took the issue for en banc resolution, despite the fact that the court received no briefing and held no argument on the issue.
In Atlantic Thermoplastics, the CAFC considered the scope of a product-by-process claim that recited "[t]he molded innersole produced by the method of claim 1." The patentee urged that competing, indistinguishable innersoles made by a different method nonetheless infringed. The CAFC rejected the patentee’s position, and construed the product-by-process claims as limited by the process.
Looking at the line of 7 Supreme Court cases dealing with the issue (spanning over the years 1874-1938), the CAFC concluded that the Atlantic Rule "finds extensive support in Supreme Court opinions that have addressed the proper reading of product-by-process claims . . .
[T]he Supreme Court has reiterated the broad principle that "[e]ach element contained in a patent claim is deemed material to defining the scope of the patented invention." Warner-Jenkinson, 520 U.S. at 19. Although Warner-Jenkinson specifically addressed the doctrine of equivalents, this rule applies to claim construction overall. As applied to product-by-process claims, Warner-Jenkinson thus reinforces the basic rule that the process terms limit product-by-process claims. To the extent that Scripps Clinic is inconsistent with this rule, this court hereby expressly overrules Scripps Clinic.
The dissenting opinions lament the loss of a "right" that has never existed in practice or precedent – the right to assert a product-by-process claim against a defendant who does not practice the express limitations of the claim. This court’s en banc decision in no way abridges an inventor’s right to stake claims in product-by- process terms. Instead this decision merely restates the rule that the defining limitations of a claim – in this case process terms – are also the terms that show infringement.
Thus this court does not question at all whether product-by-process claims are legitimate as a matter of form. The legitimacy of this claim form was indeed a relevant issue in the nineteenth century . . . However, this court need not address that settled issue. The issue here is only whether such a claim is infringed by products made by processes other than the one claimed. This court holds that it is not.
Product-by-process claims, especially for those rare situations when products were difficult or impossible to describe, historically presented a concern that the Patent Office might deny all product protection to such claims. See In re Butler, 17 C.C.P.A. 810, 813 (CCPA 1930) ("Process claims are valuable, and appellant thinks he is entitled to them; but it is submitted that he should not be limited to control of the process when the article which that process produces is new and useful."). In the modern context, however, if an inventor invents a product whose structure is either not fully known or too complex to analyze (the subject of this case – a product defined by sophisticated PXRD technology – suggests that these concerns may no longer in reality exist), this court clarifies that the inventor is absolutely free to use process steps to define this product. The patent will issue subject to the ordinary requirements of patentability. The inventor will not be denied protection. Because the inventor chose to claim the product in terms of its process, however, that definition also governs the enforcement of the bounds of the patent right. This court cannot simply ignore as verbiage the only definition supplied by the inventor.
Heretofore a new product whose structure was not fully known or not readily described could be patented as a product by including in the product description sufficient reference to how it can be made, to distinguish the new product from prior art products. Patentability was determined as a product, independent of any process reference in the claim, and validity and infringement were based on the product itself. This expedient for patenting products whose structure was not fully known at the time of filing the patent application has been called the "rule of necessity." It was pragmatic, fair, and just, for it attuned patent law and practice to the realities of invention.
Today the court rejects this expedient and discards this practice, ruling that all claims containing a process term under the rule of necessity now must be construed, for purposes of infringement, as limited to use of any process term that was used to assist in defining the product. That is, such a product is not patented as a product, however it is produced, but is limited to the process by which it was obtained. This is a new restraint on patents for new products, particularly today’s complex chemical and biological products whose structure may be difficult to analyze with precision. It is a change of law with unknown consequences for patent-based innovation.
The court acts sua sponte, without explanation of what policy is intended to be served by this change, without consideration of the technologies that may be adversely affected by elimination of this expedient, without notice to those whose property rights may be diminished. In so doing, the court departs from statute, precedent, and practice. This change is as unnecessary as it is flawed, gratuitously affecting inventions past, present, and future. I respectfully dissent.
- The en banc ruling clearly mitigates a potential certiorari showdown at the SCOTUS, which would have had a good chance of review if the Scripps ruling prevailed.
- While there appears to be some legitimate concern over procedural violations on the sua sponte ruling, Hal Wegner has notes that the CAFC's actions follow previous, similar actions in Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988)(Markey, C.J.)(en banc in part); Midwest Industries, Inc. v. Karavan Trailers, Inc., 175 F.3d 1356 (Fed.Cir.1999)(Bryson, J.)(en banc in part); and DSU Medical Corp. v. JMS Co., Ltd., 471 F.3d 1293 (Fed. Cir. 2006)(Rader, J.)(en banc in part).
- This ruling appears to follow a judicial trend of firming up the notice provision for patentees and their claim terms, and adding a further level of complexity to patent claim drafting: while insufficient claim detail may lead to invalidity, additional claim details may foreclose avenues of infringement.
- For whatever it's worth, 2 of the 3 dissenting judges hold PhD's in the chemical arts (Newman: PhD Yale, 1952, Lourie: Univ. of Penn., 1965).
Last December, Chief Circuit Judge Michel gave the keynote address at the FTC hearings on "The Evolving IP Marketplace", where Judge Michel addressed the state of patent law and patent reform. Frankly, it's one of the most sober and rational patent reform speeches in recent years, and I thought it would be worthwhile to help distribute a transcript of the speech. While the FTC has a transcript available here (link), I cleaned up the FTC version and made it available at the link provided below.
But I suggest that as we move forward . . . that it's worth pausing to consider for just a minute what do we really mean when we're talking about more patent quality. Certainly lay people and maybe some lawyers could be forgiven if they take that as a suggestion that a very large number of patents are just flat-out invalid. That is, the entire patent is a piece of junk, worth nothing, illicitly granted.
I've been on the court for twenty years and eight months, and I cannot ever remember seeing a single patent, I'm sure they're out there, but I can't remember seeing one where every single claim was invalid. I've seen innumerable patents where some of the broader claims either were indefinitely broader or were damn close, but in all of those cases, the narrower claims seemed to me equally clearly to be plainly valid. So what we really have is a problem of some over-broad claims getting through the system, slipping through the sieve that in the ideal world would catch them.
I keep hearing that we have a ‘litigation explosion’ in patent infringement cases. I keep hearing that we have lots of ‘wasteful litigation.’ I keep hearing we have excesses and abuses of certain types of defendants or maybe plaintiffs in some of these cases. I also read that for quite a number of decades now, the percentage of extant patents sued on has remained almost exactly the same, at about percent, so if you have a lot more patents out there, you would expect more lawsuits, and that's exactly what you get.
Now, of course you can say, yeah, but they're all bad patents. Well, maybe or maybe they're partly bad and partly good, so a little hard to be sure. I'm a skeptic about whether we have an excess amount of wasteful litigation or a crisis or a patent litigation explosion.
Now, as you may have heard me already throw out the number, about 3,000 patent suits filed a year, but the more interesting numbers that start to reduce that is that about 90 percent settle voluntarily. Now, of course now you may say, but yeah, only under coercion and under threats, under a gun at your head. All those kind of arguments. Well, maybe. Maybe. But 90 percent never go to trial, so when we're talking about trial expense, trial delay, not minor matters, we're not talking about 90 percent of the lawsuits. We're talking about 10 percent of the lawsuits. What happens to the 300 that don't fall out on voluntary settlements between the parties?
Well, over two-thirds of them get resolved on summary judgment. Now, summary judgment isn't cheap. I'm not trying to make that argument, but it's a lot less expensive than a full trial, lots less, and much faster almost always, not in every case, but normally.
So now we're down to about a hundred trials per year, ball park figure. (All these figures are just ball park figures). If we step back and we say, all right, we're a nation, highly developed, high technological, fully industrialized advanced nation of 300 million people. We have something like a million and a half patents in force, and we have what, 30,000 companies in the marketplace? I don't even know the exact number, but accept the notion that it may be somewhere like 30,000 players. Are a hundred trials excessive in a country of that size and that vitality with that many patents extant? And what happens when there are trials? Most of them get affirmed on appeal. Of course, that also means some get reversed, but the numbers again are kind of instructive.
So, of course, the magic bullet is a new kind of reexamination in the Patent Office. That's what everybody says will solve the problem. Why? It will be faster and cheaper than court trials. Well, maybe. In the real world, we've got a Patent Office that struggles to keep up with its current work. What basis would we have for confidence, particularly if it doesn't have a tripled budget, that it can run in-house what amounts to a court system with cross examination and discovery rules and a Judge presiding and making fact findings or Administrative Patent Judges even trained for this? How hard would it be to get them up to speed to function just the way District Court Judges do or ITC administrative judges in patent cases? I think these are hard questions, and I don't think the answers are too obvious, but they certainly give me a lot of pause.
Now, certainly the existing reexamination process has been less than a stellar success, and it certainly doesn't look faster than the courts, as slow as the courts are, compared to how they should be. I can't testify about how much cheaper it is, but the stories I've heard don't sound too encouraging, and then there's a big question of: Is it adequately accurate? Is it more accurate than what would happen in a well-run district courtroom? I'm not sure.
I'm told that the average examiner has been in the corps less than three years. Less than three years! That's a horrible fact in this country, even for our ongoing system of ex parte examination. If you try to lay on top of that a new beefed up litigation-like re-exam process, are there people there who can do it? Can the examiners do it? Can the supervisors do it? Even the board is also drowning in cases. They've greatly expanded in recent years. I think it's somewhere up to in the neighborhood now of 80 Administrative Patent Judges. What do they need, 160, 390? No one even knows what they would need to run these trials.
Now, of course when you talk about the courts, their awards, people talk about excess damages. Everyone can cite some example of what they consider a horrendously excess damage award. A fair number of what I've read in print turn out to be nonexistent cases. I kept reading about the windshield wiper case where the cost of the car was used as the metric of damages, but I haven't been able to find such a case.
There are a lot of apocryphal cases that turn out to not really exist, and there are certainly some very large damage numbers; no question about that. On the other hand, most of those large damage amounts involve very large markets, very large profits, so we shouldn't be surprised, I wouldn't think. In any event, a few examples, if they're not very representative, hardly prove that excesses are common, but that's the charge, that half the time the damages are wildly out of proportion to anything that would be sustainable in common sense. It's easy to use words like ‘appropriate.’ The FTC talks about whether damages are ‘appropriate.’ Well, it's a little bit in the eye of the beholder. What you might think was appropriate I might think was way too little or way too much, but it's a pretty inexact yardstick.
Then the argument keeps shifting. Well, it's not so much the number of infringement suits filed every year, it's who's filing. Well, why should we assume that a non-manufacturing patent owner shouldn't be allowed to enforce its patent? What is wrong with a university owning patents based on research of its faculty scientists or research institutes or small inventors or small innovative companies that either can or don't want to try to manufacture products themselves but license their inventions so others can make them?
Well, are these patentees really illegitimate somehow? I mean, after all, at least up until now a patent has given its owner the right to exclude, not the obligation to make. Then some say, well, it's not so much the non-practicing entities, it's certain companies that don't invent at all, but merely acquire and enforce patents, and of course calling them ‘trolls’ just confuses the analysis because obviously a troll is a bad thing.
It's a pejorative label. (Some people who used to complain about trolls allegedly have become trolls). But I don't think that it's helpful -- it's a slogan. It's a label. It's an excuse to not think carefully about the problem, as far as I'm concerned. It's like talking about ‘questionable patents.’ It's an excuse to not think carefully about the problem as far as I'm concerned. It's like talking about questionable patents. It's not helpful if we're going to try to diagnose the real illness and prescribe a useful medicine.
Besides, patents, like any other form of property, the essential element of property is it is alienable. You can sell it. You can sell it to anybody you want to for whatever price you want to sell it. Why should that be prohibited? Why should I be prohibited from buying patents if that's what I want to do, whether I invented them or not, whether I am going to practice them or not, whether I'm a research institution or a university or not? There might be some reasons. Maybe some of them are good, but it's not self-evident, at least not to me.
Then there's certainly the debate about motives. Well, they just want to acquire patents so they can squeeze royalties out of infringers. Well, yeah. Hey, this is commerce. This is about money. This is not an altruistic system. The whole constitutional idea was that the incentive of monetary gains would motivate innovation at a greater rate and to better ends than if the lure of money wasn't there, so I'm a little dismayed when I see it even creep into footnotes of Supreme Court opinions, that certain patentees were just trying to squeeze money out of the accused infringer. Well, all kinds of patentees are trying to squeeze money out of the accused infringer. That's what the lawsuit is all about, so come on. Let's be a little more adult about it than to worry about the greedy motive of the patentee. Of course the patentee is greedy.
Plaintiff successfully asserted that Master Lock infringed four patents relating to barbell-shaped locks with removable sleeves, and the jury awarded $5.35M in damages as a reasonable royalty. Master Lock motioned the court for Remittitur, arguing that the jury misapplied the Georgia-Pacific factors.
One issue was that the damage amount appeared to have been reached by awarding Wyers approximately half of the profits they would have received had Master Lock sold the offending locks under the private label agreement they formerly had with Wyers. Despite this, the court viewed that plaintiff's substantial evidence (e.g., reliance on the patented features, non-infringing alternatives, commercial success, etc.) was sufficient to support the jury’s verdict.
only license for one-half of its expected lost profits and that such an amount was a reasonable royalty”).
As noted by Wyers, however, Federal Circuit authority holds that—for purposes of calculating a reasonable royalty—a patentee may recover a royalty based on the value of the entire infringing apparatus so long as the patented feature provides the basis for consumer demand. See Rite-Hite, 56 F.3d at 1549. Evidence presented at trial—including Master Lock’s marketing materials, product packaging, and sales figures, as well as Mr. Wyers’s testimony—showed the sleeve and external seal drove the market demand for the hitch pin locks Master Lock sold. Although Master Lock presented testimony suggesting that customer service, quality, and brand recognition were more important to driving sales than the claimed inventions, the jury was not obligated to find this testimony persuasive over the documentary evidence or Mr. Wyers’s testimony.
Imagine a "who's who" list of patent scholars, practitioners, in-house counsel, government officials, IP brokers and policy makers - who were all placed in a single room with a microphone for 6 full days to speak individually about their experiences and opinions on various aspects of patent law. A transcript of the speeches/discussions would surely be a valuable asset to anyone looking to learn from the practices and observations of others.
The Federal Trade Commission (FTC), who recently completed a whirlwind tour of public hearings in California and Washington DC has now begun publishing transcripts of these meetings and has made many of them available, along with the presentation material provided with each session. While some of the transcripts are missing from the FTC site, the 271 Blog has done some sleuthing and has located copies elsewhere, with the exception of the May 4-5 hearings.
• Stuart Graham, Patents and Technology Markets: How is the market operating, and can it be improved?
Anyone looking to get more insight on current patent issues and read first-hand accounts from industry and academic leaders are strongly advised to read through the materials. It's a lot of information - a few hundred pages in transcript material alone - but is well worth the read.
The FTC page for these hearings may be viewed here (link), which contains much of the aforementioned material, with the exception of some of the transcripts listed above.
There has been a renewed interest in deferred examination for the USPTO, primarily because (a) it appears to enjoy some success overseas, and (b) the current backlog of pending cases at the PTO are at unsustainable levels. As many institutional patent filers recognize, a fair percentage of yearly filings are almost exclusively defensive, i.e., the filings are submitted to create "freedom-to-operate" (FTO) areas and to potentially block future filers in the technological space, and also create uncertainty for competitors analyzing filed applications.
While U.S. companies have long used defensive filings, statistics on this area are hard to find, since the U.S. system makes it almost impossible to gleam the motivation behind any filing.
However, in the EPO, and more specifically Germany, deferred examination creates two "lags" between filing and grant (or refusal): (1) the examination lag - i.e., between filing and examination, and (2) grant/refusal lag - i.e., between examination and grant or refusal. In Germany, examination does not start until it is requested by the applicant. Thus, the applicant controls the examination lag. Accordingly, applicants can achieve a very long, and cost-efficient, period of pendency, since prosecution costs are practically nil, and there is no “risk” of too early termination. As a result, competitors cannot ignore the application (since the examination request can still be made), and the applicant gains a certain leverage in the patent office on the specific technology.
• While 64.7% of all applications in the GPTO were eventually accompanied by an examination request, 35.3% of all applications had no examination started. However, of the 35.3%, 51% of them had subsequent, priority-based, applications filed in other patent authorities.
• In 47.8% of all GPTO direct first filings, the request for examination was filed before the application was published, meaning the applications corresponded to an "accelerated process" pattern. The remaining 16.9% lingered as "optional" filings, presumably to create insecurity among competitors.
• 2% of all applications could turn out to have defensive publishing as their sole purpose, that is, the publication of inventions with the purpose of creating prior art.
• More than 20% of all applications are left pending for the maximum of seven years before examination is requested or the application is deemed to be withdrawn.
• In cases where the filings are withdrawn very early (when first annual fees would have been due), 85.9% of applications actively withdrawn had subsequent filings, thus indicating that the original filing was merely done to secure priority.
[A] surprisingly large share of applications is kept pending without request for examination, in 20% of all filings even for the maximum period of seven years. For applications with low value or low probability of grant, this creates insecurity for competitors and is thus preferable to an early withdrawal or an early, and likely negative, decision by the examiner. Second, a longer pendency period gives the applicant more time to assess the value of requesting examination. We find that for 17% of all GPTO direct filings, a request for examination is made with delay, that is, after publication of the application.
Evidence from interviews suggests that firms strongly benefit from maintaining pendency of patent applications that cover rather abstract technologies whose market is considered strategically important as a whole, but which are not yet embodied in concrete products. It seems that in such cases a pending patent application offers enough protection while at the same time involving lower cost (e.g. no examination fee, no prosecution cost). As soon as “full” protection is required (e.g. when a product will be launched soon), the applicant can easily induce examination of the patent. Our data shows that this strategy is mostly used by firms (in contrast to individuals): 90.4% of all patents that were pending for seven years before examination started were filed for by corporations or institutions.
Our interviews further suggest that individual applicants who keep their filings pending do so in order to save examination cost while searching for licensees. A majority of 54.8% (which is far above average) of all early lapsed patent applications is filed by individuals suggesting low commercial value of the underlying inventions. The remaining 41.6% (more than 2 % of all filings) are early lapsed corporate or institutional filings. They are strong candidates for being DPs [defensive publications], or in any case for having a large value component related to creating FTO. While we can currently not exclude that the applicants did file initially with the intention of obtaining a patent grant, and within two years realized that a request for examination would be of little value (because of a low probability of grant, or a low value of the resulting patent, if granted), interpreting these filings as DPs is very plausible. First, this interpretation is suggested by qualitative evidence. Second, a survey among EPO applicants found that preserving FTO, after preventing imitation, is the second most important motive for patenting.
USPTO Reform at WIPO: New PCT Procedures Being Proposed for "PCT II"
At the May 2008 session of the Working Group, the International Bureau (IB) presented a paper titled "Enhancing the Value of International Search and Preliminary Examination Under the PCT" (PCT/WG/1/3), where the paper addressed shortcomings of the PCT to exploit work product of various offices. According to the group, worksharing would greatly assist in reducing the overall workload of patent offices worldwide through the use of the international reports either as the basis for grant or at least as the basis for an accelerated examination process.
In other words, the general idea is place greater weight on reports issued from the international/national stage so that a positive report would automatically indicate a potential patent grant in all member states, referred to as a "PCT II Patentability Report." After the report issues, national offices would have a specific period of time to issue a notification of refusal.
[W]ould result in an extremely high quality final work product that should be able to be heavily relied on, if not accepted, by national offices due to the fact that it is the result of a comprehensive search of multiple offices that incorporates prior art submissions by the applicant and third parties. It will have the additional confidence factor of being prepared in conjunction with the processing of the national application [in the issuing search office], thus resulting in either a patent grant or a final rejection in that office.
(1) the combining of international and national processing "that will enable more efficient processing in the Authority/national office performing the search and examination,"
(4) allowing for third party prior art submissions.
-- Read other documents relating to the "Patent Cooperation Treaty Working Group : First Session" (May 26, 2008 to May 30, 2008) here (link).
Recently, Intel Corp.'s chief patent counsel David Simon and entrepreneur Steve Perlman faced off in a debate on patent reform yesterday, where their views showed a wide gap between the opinions of big corporations and startups over pending patent legislation, and especially apportionment of damages and first-to-file.
Silicon Valley executives told [Lofgren] in recent meetings that a compromise bill, which last month passed the Senate Judiciary Committee, could be worse than no bill at all due to what they believe is watered down damages language. "Last year we had a strong bill," Lofgren said of the version that passed the House. The Senate measure stalled last spring after Judiciary Chairman Patrick Leahy and then-ranking member Arlen Specter could not see eye to eye on damages text. "Now we have a bill that opponents of patent reform are rallying around," she said of Leahy's legislation as amended.
providing, at a merchant's web site, means for a consumer to participate in an earning activity to earn value from a merchant; and . . .
On Appeal, the BPAI noted the examiner's obviousness rejection (and surprisingly didn't raise any 101 issues sua sponte). However, the Art Unit SPE filed a request for rehearing seeking reconsideration of the Board's decision by arguing that the "means for" language was indefinite under section 112, second paragraph, since the Specification allegedly did not disclose adequate structure, material, or acts that perform the function recited in the claims.
Reviewing the Specification, the Board noted that "The Appellants' Specification does not provide . . . an algorithm by which the consumer is able to participate in an earning activity and earn value." Also, the Board noted that a description of prior art incentive programs "merely provides examples of the results of the operation of an unspecified algorithm."
[A] general purpose computer programmed to carry out a particular algorithm creates a "new machine" because a general purpose computer "in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.". . . The instructions of the software program in effect "create a special purpose machine for carrying out the particular algorithm." . . . Thus, in a means plus function claim "in which the disclosed structure is a computer, or microprocessor, programmed to carry out an algorithm, the disclosed structure is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm."
Appellants' Specification describes generally that the consumer can access an earning activity through the merchant's web site. The merchant's web site itself cannot be the means or structure corresponding to the function of the claims, because the claims recite providing "at a merchant's web site" means for a consumer to participate in an earning activity and earn value. It is clear from the claims that the merchant's web site is merely the location, through which the software that enables the consumer to participate in the earning activity and earn value, is provided. The Specification does not provide, however, an algorithm by which the consumer is able to participate in an earning activity and earn value.
The Board applied the 112 rejection and vacated the obviousness rejection, noting that "[a] rejection of a claim, which is so indefinite that 'considerable speculation as to meaning of the terms employed and assumptions as to the scope of such claims' is needed, is likely imprudent."
Martin A. Bader and Frauke Rüther, on behalf of PriceWaterhouseCoopers, surveyed the top 500 patent applicants of the EPO to determine valuation procedures and methods. It has been known for a while now that the management of intangible assets is an important element of strategic corporate management that is constantly increasing in significance.
As a consequence of International Financial Reporting Standards (IFRS), intangible assets, including patents, have to be listed according to certain prerequisites on a corporate balance sheet. Regulators, as well as potential stakeholders and investors, are constantly looking for accurate and transparent valuations for determining portfolio worth. This study hopes to shed some light on this topic by seeing what the largest EU patent holders do.
At the outset, more than 90% of the interviewees emphasized the importance of innovations and patents for corporate success. With regard to patents alone, only 58% of the interviewees cited that patents were important to their business. 57% of the companies interviewed indicated that "value-oriented innovation management" is firmly entrenched in their organization; only 12% answered this question in the negative.
This result is surprising since particularly the management who frequently asks to be informed about the potential value contribution of their patents will find it difficult to infer it from this method. It is also surprising in the light of the importance of value-oriented innovation management . . . The path from a currently dominating risk and cost approach in patent portfolio management and patent valuation to an at least application dependent opportunity and market or income based approach still seems to be steep and breathtaking for Europe’s top enterprises.
In addition to these statistics, the report includes other statistics and some useful summaries of the 3 most common valuation methods: (1) market approach, (2) income approach, and (3) cost approach.
The Appellant's claimed invention relates to raised panel door sections for overhead garage doors. Claim 1, reproduced below, is representative of the subject matter on appeal.
support members coupled to first and second lateral edges of said sheet metal layer.
The claimed finished door section height is no more than the result of the substitution of one element (three twenty-eight inch door panel sections) for another known in the field (four twenty-one inch door panel sections) to yield a predictable result (a door section with a finished height of substantially twenty-eight inches).
To rebut the prima facie finding of obviousness, the applicant submitted eight different declarations addressing various reasons for non-obviousness of the claimed configuration. Some of the declarations addressed the "highly visible features" of garage door panels and mentioned a commercial need in the market to have a garage door that "looks different from the traditional raised panel steel garage doors."
Evidence of commercial success for a claimed invention of a utility patent application cannot be shown, however, by industry reaction to the aesthetic appearance of the claimed invention. Such evidence is too subjective to serve as reliable objective evidence of secondary considerations of non-obviousness. Further, the ornamental appearance of a product is the purview of the design patent law. Were we to allow secondary considerations of non-obviousness to be based on the industry's reaction to the ornamental appearance of the claimed invention, we would be blurring the distinction between design and utility patent protection. Objective evidence of secondary considerations of non-obviousness should be tied to the functional aspects of the claimed invention for a utility patent application . . . we hold that unexpected results for the claimed invention of a utility patent application cannot be based on enhanced aesthetic appearance, which is a subjective factor and one more properly reserved for the confines of design patent protection.
Establishing long-felt need requires objective evidence that an art-recognized problem existed in the art for a long period of time without solution. In particular, the evidence must show that the need was a persistent one that was recognized by those of ordinary skill in the art. In re Gershon, 372 F.2d 535, 539 (CCPA 1967). The declarations submitted by the Appellant do not show that the need for a different looking door was a persistent one or that others tried to meet the need and failed. While the need for a new look to garage doors may have been a market pressure that existed at the time of the invention, the declarants fail to state how long the need existed in the industry and whether any attempts to meet the need were made by others in the industry.
As such, the BPAI affirmed the obviousness rejections.

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