Category Archives: Patents

PTAB: Action involving license agreement does not grant standing to file petition for covered business method review

A covered business method (CBM) review is a tool that the America Invents Act (AIA) created to allow entities charged with infringement of a CBM patent to challenge the patent’s validity. A recent decision from the Patent Trial and Appeal Board (PTAB) shows that the “charged with infringement” requirement must be satisfied, or the PTAB will deny the petition.

In Ocean Tomo LLC v Patent Ratings LLC, the PTAB considered a CBM petition against a patent that was part of a license agreement to Ocean Tomo. Ocean Tomo filed a declaratory judgment action against the patent holder (Patent Ratings) on several grounds, including a count seeking declaratory judgment of non-breach of the license agreement. Ocean Tomo then filed a petition for CBM review of the patent.

The PTAB denied the petition, noting that Ocean Tomo had not been charged with infringement of the patent, and its declaratory judgment action did not include a count seeking a declaration of non-infringement. Instead, the PTAB found that “[t]he parties’ contract, tort, and related causes of action concern and arise from the fractured employment and business relationship between Petitioner and … Patent Owner, not from charges of infringement of the ’849 patent.” On that basis, the PTAB denied the petition.

 

Will the Federal Circuit or Congress boost the ITC’s ability to block the importation of infringing digital files?

Section 337 of the Tariff Act of 1930 authorizes the International Trade Commission (ITC) to halt the importation of articles that infringe patents and other intellectual property rights. Until late last year, the ITC used this authority to block imports of digital files in response to allegations of patent infringement. However, the Federal Circuit upended that tactic in November when it ruled that “articles” do not include digital data files.

The Federal Circuit’s ruling in ClearCorrect Operating LLC v. International Trade Comm’n (Fed. Cir. Nov. 10, 2015) related to a situation in which the ITC acted on a complaint filed by Align Technology, Inc., which asserted that a Pakistan-based company and its U.S. subsidiary infringed Align’s patents for methods of creating and using orthodontic aligners. The court noted that “the only purported ‘article’ found to have been imported was digital data that was transferred electronically, i.e., not digital data on a physical medium such as a compact disk or thumb drive.”

The Tariff Act does not define the term “article,” so the court looked at various dictionary definitions, as well as other sections of the Tariff Act, and concluded that intangibles such as digital data are not “articles” that are within the ITC’s authority to block. The court also noted that Congress has debated various updates to the relevant sections of the Tariff Act in recent years, but it has not implemented any changes that would update the Act to expressly include digital data within the ITC’s authority.

The ITC has requested an extension of time (through January 27) to request an en banc rehearing of the decision. It is widely expected that the ITC will file the rehearing petition.

The ClearCorrect decision followed another Federal decision (Suprema v. International Trade Comm’n) that expanded the ITC’s authority to block importation of devices (e.g., fingerprint scanners) that are not infringing upon entry into the U.S., but which do infringe after certain software is loaded on the devices. Some may view the Suprema and ClearCorrect decisions to be at odds with each other. If the Federal Circuit revises the ClearCorrect decision in a rehearing, the result could create a significant roadblock for importers of products, software and data sets that infringe U.S. intellectual property rights.

USPTO Power Outage Affects Patent and Trademark Filing Deadlines

The U.S. Patent and Trademark Office experienced a serious power outage on December 22, 2015. According to the USPTO, the outage  “damaged equipment that required the subsequent shutdown of many of our online and IT systems,” including the USPTO’s online filing systems.”

The outage came at a particularly problematic time for the many patent and trademark applicants who are trying to complete filings via the USPTO’s electronic filing systems before the Christmas holiday.

Fortunately, the USPTO is now treating December 22-24, 2015 as a Federal holiday when it receives responses or fees that were due on those days. This means that any fees or responses due on December 22-24 will be considered to be timely if filed by the USPTO’s next business day (Monday, December 28).

Note that this notice does not mean that newly filed patent or trademark applications will receive a filing date of December 22 if filed on Monday, December 28. If applicants want an earlier filing date (i.e., December 24), they must file the application by other means, such as a paper filing via USPS Priority Mail Express.

Stay tuned to the USPTO website or Twitter feed for future updates, especially if systems are not operational by December 28.

Can I patent my recipe?

The New Food Economy answers that question (and hints:  “no one likes the answer”) in a new article published this week, linked here.  While the answer isn’t always “no,” in most cases it’s either difficult or too late.

How about recipes and other areas of intellectual property law (specifically, copyright)?  I answer that question in a post linked here.

USPTO announces plans to include claim constructions in the patent examination process

The USPTO recently announced three new Enhanced Patent Quality Initiative programs that are designed to (i) add more detail and clarity to the public record of each U.S. patent application, and (ii) improve consistency in how USPTO examiners’ work product is reviewed.

Of the new proposals, the Clarity of the Record Pilot could have the most significant effect on patent prosecution, as well as on litigation of the resulting patents. According to a blog post from USPTO Director Michelle Lee, the Clarity of the Record Pilot will require examiners to “include as part of the prosecution record definitions of key terms, important claim constructions, and more detailed reasons for the allowance and rejection of claims.”

The Clarity of the Record Pilot has been under development for several months, after USPTO leaders sought public input at various open forums.  Full details of the program are not yet released. However, the USPTO’s plans to have Examiners place claim constructions and definitions on the record raise an intriguing question as to how much deference the courts will give to the Examiner’s claim constructions when the resulting patents are litigated. If an Examiner places a claim construction on the record in a Notice of Allowability, the applicant should carefully review it to consider whether that is the construction that it would want to advance in litigation.

When announcing the new Clarity of the Record Pilot, Director Lee also stated:

Through correctness and clarity, such patents better enable potential users of patented technologies to make informed decisions on how to avoid infringement, whether to seek a license, and/or when to settle or litigate a patent dispute. Patent owners also benefit from having clear notice on the boundaries of their patent rights.

In addition to the results described above, these new prosecution procedures could significantly reduce the time devoted to claim construction disputes during litigation.

License On Transfer Network adds three new members

Lotnet LogoIn 2014, a group of America’s top technology companies created a unique way to combat the problem of patent assertion entities:  the License On Transfer (LOT) Network. Founding members of the LOT Network included Canon, Dropbox, Google, SAP and Ford Motor Company. In September 2015, Enplug Inc., Inductive Automation LLC, and SilverEdge Inc. joined the network.

Members of the LOT Network must sign an agreement to grant the other members a perpetual, royalty-free license to the member’s patents upon the occurrence of a “Triggering Event.” Triggering Events include a transfer of a patent (other than a defined “Non-Assertion Transfer”), or a change of control in which the surviving entity is a non-assertion entity.

As of the time of this post (September 2015), the LOT Network included over 50,000 granted patents and nearly 300,000 patent assets (including patents and pending applications). It serves as a unique, market-based solution that allows members to put their patents on the line when facing the challenge of patent assertion entities.

 

USPTO Introduces Expedited Patent Appeal Pilot for Small Entities

After a summer hiatus, IP Spotlight is back.  This week we will review some of the more significant business-related developments in intellectual property law over the last few months.

First up:  On September 15, 2015, the USPTO introduced a Streamlined, Expedited Appeal Pilot for Small Entities, a procedure by which small entities (and micro entities) can speed up the process of appealing a final rejection of their patent application. Unlike traditional appeals, which often sit for 2-3 years waiting for a Patent Trial and Appeal Board decision, the USPTO’s goal for the streamlined appeal pilot is to act on a petition to enter the streamlined appeal pilot within two months, and to render a final decision within four months after acting on the petition.

The pilot is only available to small entities and micro entities who have no more than one appeal pending before the Board. In addition, appeals that involve a rejection on the basis of lack of written description, enablement, indefiniteness or best mode are not eligible for the pilot. No fee is required to file a petition for expedited appeal under the new pilot. The pilot is open to the first 2,000 petitioners.

Although an expedited appeal can save patent applicants both time and money, applicants should consider the potential drawbacks before entering the pilot program. Specifically:

  • The applicant must agree that, for each ground of rejection, the Board may select a single claim and decide all claims that are subject to that ground in the same way that it decides the selected claim. This could be risky for applicants who are challenging a patent-eligibility rejection, since it allows the Board to uphold a rejection of all claims without assessing the potentially significant details of any dependent claims.
  • The applicant must agree to waive an oral hearing.

Because of this, the streamlined process may be valuable where the only issue is a rejection on the basis of novelty or obviousness and the applicant’s argument is strong for the broadest claim. In other situations, patent applicants should think carefully before submitting their applications to the new pilot program.

Full details about the USPTO’s Streamlined, Expedited Appeal Pilot for Small Entities are available here:  http://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/streamlined-expedited-patent-appeal-pilo-0.