On February 23, 2010, my partners Josh Slavitt and Susan Krembs will host a webinar that focuses on IP issues and opportunities facing companies that do business in both the U.S. and Canada.   The webinar will address similarities and differences between U.S. and Canadian patent laws.   In addition, the webinar will review some of the most significant recent U.S. court decisions on patent law, with a focus on how those cases present new risks and opportunities for Canadian and U.S. companies, including new areas of inquiry for conducting due diligence in acquisition and financing transactions.

More details about the webinar are available via this link. 

Click here to register for the webinar.

The U.S. Patent and Trademark Office (USPTO) has several “Patent Prosecution Highway” (PPH) programs with the patent offices of other countries.  In the PPH programs, the USPTO will expedite examination of an application containing claims that have been allowed by another PPH country. 

On January 29, the USPTO announced what may be the most significant PPH program yet:  the PCT-Patent Prosecution Highway Pilot (PCT-PPH).  Under the PCT-PPH, applicants who filed both a U.S. patent application and an international patent application under the Patent Cooperation Treaty (PCT) can petition the USPTO for expedited examination of the U.S. application if the corresponding PCT application received an indication that at least one claim has novelty, inventive step, and industrial applicability.  The PCT application may receive this indication in any of the following:

1. written opinion from an International Searching Authority (ISA)
2. written opinion from an International Preliminary Examining Authority (IPEA), or
3. an International Preliminary Examination Report (IPER) from an International Preliminary Examining Authority.

In order to qualify, the PCT application must have been reviewed by the USPTO, the European Patent Office, or the Japan Patent Office.  In addition, the U.S. application must contain (or be amended to contain) claims that sufficient correspond to the claims which were found to be allowable in the PCT report. 

Because ISRs are typically issued within 16 months from the priority date of the PCT application — much faster than the typical first USPTO action time of 25.8 months – this new program could significantly reduce the pendency of patent applications having allowable claims.

Another potential benefit:  according to recent USPTO statistics, patent applications that participate in PPH programs typically receive action within 2-3 months from the date of the PPH request.  Plus, as of November 2009, according to the same USPTO statistics, the allowance rate of PPH cases was 91%, compared to 44% for non-PPH cases.

My colleagues Paul Legaard and Dan Scolnick have published additional details about this new program on the Pepper Hamilton LLP website.  For the full article, click here.

Yesterday the USPTO published a guidance memo regarding patentability of computer-readable media (i.e., software patents).   The USPTO has rejected many claims directed to computer-readable media if the claim could be broadly interpreted to cover a transitory propagating signal, rather than only tangible media such as hard drives or computer-readable disks.  The USPTO’s rejections state that such claims cover non-statutory subject matter under 35 U.S.C. § 101. 

This week the USPTO issued a new guidance memo containing specific language that the USPTO considers sufficient to overcome subject matter eligibility rejections involving computer-readable media.  Specifically, the USPTO advises applicants who receive 101 rejections to amend the claims to state that the computer-readable medium is a “non-transitory” medium.

According to the guidance memo, the USPTO does not believe that this amendment will add new matter to a claim, even if the specification did not originally use those words, so long as the specification disclosed something other than a signal per se as the computer-readable medium.

(Thanks to my colleague Dan Scolnick for the heads up about this guidance memo.)

In what may be the world’s largest domain name dispute to date, a WIPO arbitration panel recently ordered that 1,519 domain names be transferred to Six Continents Hotels, Inc. and Inter-Continental Hotels Corporation.  

In Inter-Continental Hotels Corporation, Six Continents Hotels, Inc. v. Daniel Kirchhof (Case No. D2009-1661), the two hotel operators filed a compliant with the WIPO Arbitration and Mediation Center in December 2009.  The hotel operators own trademarks and operate hotels under names such as Holiday Inn, InterContinental, Crowne Plaza, Hotel Indigo, Staybridge Suites and Candlewood Suites.

According to WIPO’s ruling, the Respondent was a German citizen who registered over 70,000 domain names.  Most of the disputed domain names in this case included the CANDLEWOOD, CROWNE PLAZA, HOLIDAY INN, INTERCONTINENTAL, or STAYBRIDGE marks.  In the ruling, the panel found that:

The Respondent has never used or made preparations to use the disputed domain names in connection with a bona fide offering of goods or services. Rather the Respondent uses the disputed domain names in relation to websites which falsely appear to be associated with the Complainant. A typical website displays information about a single hotel and provides links for more information including reservations. The links then display Google advertisements for websites which offer hospitality services in competition with the Complainant’s services (such as Marriott, Travel Lodge, etc).

The panel issued its decision only 49 days after the complaint was filed.  However, the speed may be in part because of the lack of a challenge to the complaint.  The WIPO decision notes that the Respondent never formally replied to the complaint.  In addition, although the panel states that it did not consider this in its ruling, a person claiming to be a representative of the Respondent e-mailed WIPO five days before the WIPO decision issued and stated that the Respondent would consent to transfer of the domain names.

Many transactions begin with each party handing the other a nondisclosure agreement (NDA), and each party battling over whose “form” controls.  However, it’s common for both parties to overlook the fact that there is no “one-size-fits all” form NDA.  Before entering into an NDA, each party should examine the terms to ensure that the agreement makes sense for the party’s business.  Each party should ensure that the agreement adequately protects its own information, while not going so far as to subject the party to confidentiality procedures that can create issues down the road.

Issues to consider when you are entering into an NDA include:

1. Nature of the disclosure:  Are you more likely to be the discloser or the receipient of confidential information?   If you will be a discloser, then a strong agreement may benefit you.  If you will only be the recipient, then you might seek a less stringent agreement.
2. Duration of the confidentiality obligation:  Some NDAs require information to be kept confidential forever.  Others have a more limited term, such as 2 to 3 years.  A long term is valuable if the disclosure involves trade secret manufacturing processes, chemical compositions, or similar information.  However, if you are disclosing information that will become publicly known anyway — such as design details for a soon-to-be-sold product, or information that will be published in a patent application —  then a term greater than 2 or 3 years may only benefit the other party.
3. Consistency with corporate procedures:  Review the terms to ensure that they don’t impose obligations with which you cannot comply.  For example, if you need to disclose the information to contractors who aren’t employees, be sure that the agreement permits that.  I’ve also seen NDAs stating that all individuals who will have access to the information must sign a confidentiality agreement that specifically refers to  the NDA.  If you are faced with that type of obligation, consider whether or not you are prepared to comply.
4. Purpose / Non-use clause: It’s standard for an NDA to state that the recipient cannot disclose the information.  However, does it also restrict the recipient from internally using the information for its own benefit?  Does it clearly limit the purpose for which the recipient can use the information?  “Purpose” clauses are often filled in after all other terms are negotiated — but parties should take care so that they are as carefully drafted as any other clause.

These are just a few areas that should be considered when drafting confidentiality agreements.  Rather than simply signing an ‘off the shelf” form, each party should carefully review the agreement with its attorneys to ensure that it fits the business need.

Free and open source software (FOSS) offers a free, time-saving solution to many software developers.  However, “free” does not always mean “without cost”.   As my colleague David Wormser wrote in a recent article:

[S]ometimes even “royalty free” can be too expensive.  FOSS almost invariably comes with strings attached. . . . Depending on the FOSS and the developer’s plans for it, complying with the applicable license may be relatively easy and painless.  But, if it a developer wants to avoid potentially serious consequences, it needs to take a systematic approach to managing the FOSS opportunity.

The legal challenges flow from the terms of the license agreements themselves. The license agreements are essential to the developer’s legal ability to use FOSS code. . . . Each license imposes a specific set of requirements and limitations on developers wanting to modify and/or redistribute the FOSS in question. Unfortunately, from the developer’s point of view, complying with the license can be complicated, particularly when the developer intends to use in a single software product FOSS from a variety of sources.

For Dave’s full article and recommendations on how best to manage the use of open source software in your company, click here.

inovia llc, which offers the pctfiler product for PCT national stage patent filings and epvalidation for European patent validation, has launched a new blog dedicated to information about filing patents on a global basis.  According to inovia’s press release:

The foreign filing blog is dedicated to all issues of foreign patent filing, ranging from the PCT process and cost-savings measures, to country-specific issues related to national stage entry.

The term of a U.S. Patent is, with certain exceptions, 20 years from the filing or priority date of the patent application.  Section 154(b) of the Patent Act requires the USPTO to extend the term of a patent if the USPTO did not act promptly on the patent application while the application was pending.   For example, if the USPTO fails to take certain actions within required time periods (such as issue a patent within 4 months of the date of payment of an issue fee), then the patent must be extended to account for the delay.  (35 USC 154(b)(1)(A).)  In addition, if the USPTO’s delay causes a patent application to pend for more than 3 years, the USPTO must add one day to the term of the patent to account for each day of the delay.  (35 USC 154(b)(1)(B).)

In practice, if delays occurred under both the first clause (A) and the second clause (B) of Section 154(b)(1), the USPTO has reduced the period of patent term extension under clause B by the amount granted under clause A.   A  new Federal Circuit case says that this practice short-changed patent applicants.  In Wyeth v. Kappos (Fed. Cir. Jan. 7, 2010), the Federal Circuit held that if an “A” delay and a “B” delay occur on different days, then there is no overlap, and the USPTO must extend the term of the patent to account for both periods of delay.

My colleagues Paul Legaard and Dan Scolnick have prepared a more detailed analysis of the Federal Circuit decision.  To read their article, click here.

When a company sells a product for which it also holds a patent, it is common practice for the company to mark the product with the patent number.  Patent marking serves to place the public on notice that the product is patented  — thus potentially deterring infringers.  More importantly, marking a product helps to maximize the damages available in an infringement action.  Section 287(a) of the Patent Act states that a patent owner who fails to mark its products can only collect damages for infringement if the infringer was notified of the infringement and continued to infringe anyway.

However, the decision to mark must be carefully made.  Falsely marking a product with a patent number also creates a risk for the seller of the product.   Section 292 of the Patent Act states that whoever marks a unpatented product as if it were patented may be subject to a fine.  Marking a product with an expired patent number or an incorrect patent number can also create liability under this section.

A recent Federal Circuit case has significantly raised the stakes associated with false patent marking. Previous cases have held that the false marking fine of $500 was a maximum fine, regardless of the number of patented articles sold.  However, in The Forest Group v. Bon Tool Company, the U.S. Court of Appeals for the Federal Circuit stated that the $500 fine can be applied on a per article basis for each product sold with false marking.  In the decision, the Court acknowledged that it may have opened the door to a “‘new cottage industry’ of false marking litigation by plaintiffs who have not suffered any direct harm.”  Nonetheless, the Court stated that “[t]his, however, is what the clear language allows.”  Thus, this new case can have a significant effect on parties who mass-produce products that are marked with expired or incorrect patent numbers.

The Court noted that the Patent Act still allows courts to ensure that false marking litigation does not result in judgments that far outweigh the costs of goods sold.  First, the Court acknowledged that under Section 292 a plaintiff still must establish that the product was incorrectly marked with an intent to deceive the public.  In addition, the $500 per article fine is a maximum, and is not required in all situations: “a court has the discretion to determine that a fraction of a penny per article is a proper penalty” in order to avoid “disproportionately large” damage awards.

My colleagues Paul Legaard and Dan Scolnick have published additional details about the case.  For those details, see their article which is available on the Pepper Hamilton website by clicking here.

Each year on this blog I’ve addressed a question that is commonly posed by patent and trademark applicants:  “how long will it take for my application to grant?”  The USPTO recently released statistics for fiscal year 2009 that help answer this question, so here are some benchmarks from the USPTO’s FY 2009 Performance and Accountability Report, and the shorter form FY09 Patent Pendency Statistics:

Patents:  The average time between filing and first Office Action is 25.8 months, while the average total pendency (i.e., time from the filing date to patent issuance or abandonment) is 34.6 months.  As has been the trend in every year since at least 2005, both of these statistics are higher (i.e., a longer time) than the previous year.

Applications classified in Technology Center 2600 (Communications) must wait an average of 33 months to first Office Action, which is one of the highest average waits at the USPTO.  Applications in Technology Center 2100 (Computer Architecture, Software & Information Security) generally wait 29.4 months to first action, while applications in Technology Center 1700 (Chemical and Materials Engineering) typically wait 25.9 months to first action.  The total average start-to-finish pendency is the highest in Technology Center 2400 (Networking, Multiplexing, Cable and Security), where the total pendency averages 47.7 months.

The USPTO allowed 214,523 patent applications — nearly 35,000 more than last year.  However, 272,607 applications went abandoned — also more than last year.  Thus, the overall allowance rate decreased to only 44% in FY 2009.   

The USPTO has also seen a significantly higher number of appeals.  As of the end of FY2009, 35,241 patent applications were on appeal — a 14.1% increase over FY 2008 statistics.

Trademarks:  In 2009 the average time from filing to first Office Action in a trademark application was 2.7 months – slightly shorter than the time required in the previous year.  The average total pendency was 13.5 months — also down slightly from 2008 statistics.

The total number trademark applications filed decreased 12.3% to 352,051 total filings in FY 2009 — the USPTO’s lowest number since FY 2005.