Received a patent in the past 7 months? Act quickly to take advantage of possible term adjustment.

If you received a patent in the past seven months, you may be eligible to extend the term of your patent if you qualify for Patent Term Adjustment (PTA).

PTA can extend a patent’s term beyond its typical 20 years if certain delays occurred during prosecution of the application. PTA will account for any days beyond three years that the patent application was pending before the USPTO, with certain exceptions. Exceptions include delays caused by the applicant, such as a request for an extension of time to respond to a USPTO  action.

The USPTO has also treated any time after the applicant filed a request for continued examination (RCE) as an exception to the PTA eligibility period.  A new court decision (Novartis AG v. Lee) held that the USPTO was only partially right. According to the new decision, although PTA will not be awarded for the time between RCE filing and allowance, PTA should be awarded for the time spent between allowance and grant. This period is commonly three to five months, which means that many granted patents may be eligible for PTA to cover this additional period.

Under current USPTO rules, the deadline for filing a Request for Reconsideration of PTA Calculation is two months from grant. This time period may be extended period by five months. A $200 petition fee is required, plus extension of time fees if filed within the 5-month extension period.

So, if you were awarded a patent within the past seven months, and if you filed an RCE while the patent was pending, you should act fast if you want to take advantage of the additional PTA that may available based on this new Court decision.

Hardware alone does not infringe patent that also requires software running on the hardware

The mere capability of infringement does not necessarily give rise to liability for infringement, according to the Federal Circuit’s opinion in Nazomi Communications v. Nokia Corp. (No. 2013-1165, 1/10/2014).

In the case, non-practicing entity Nazomi held two patents covering hardware-based java virtual machines (JVMs) that can process both programming instructions stored in a stack-based memory and legacy applications that are stored in a register-based memory. The case involved electronic devices sold by Western Digital (specifically, the MyBook) and Sling Media (which sells the SlingBox). Each device  contained a processor that was licensed from ARM Continue reading

Patent and trademark applicants: Beware the hidden costs of an appeal from the PTAB/TTAB

A recent case involving an appeal of a rejected trademark application highlights a hidden cost that may occur if a patent or trademark applicant asks a District Court to overturn the USPTO’s action.

When the USPTO rejects a patent or trademark application, the applicant may appeal the rejection to the Patent Trial and Appeal Board (PTAB) or Trademark Trial and Appeal Board (TTAB), as the case may be.  If the applicant doesn’t like the PTAB/TTAB result, it may then appeal to a federal court.  As to which court, the applicant will have two options:  (1) appeal to the Eastern District of Virginia, or (2) appeal to the Federal Circuit.  The benefit of option (1) is that it allows the applicant to bring in new evidence in an attempt to improve its chances for a good result.  However, the downside of option (1) is that the applicant must pay the expenses of the proceeding under 35 U.S.C. 145 (if a patent appeal) or 15 U.S.C. 1071(b)(1) (if a trademark appeal).

In the recentdecision, Shammas v. Focarino, E.D. Va. No. 1:12-cv-1462 (Jan. 3 2014), the court held that “expenses” in the context of a trademark appeal includes attorneys’ fees, and that the appellant must pay those fees regardless of the outcome.  This included a pro rata portion of the actual salaries of the government attorneys who handled the case for the USPTO, based on the time that they devoted to the case.

Previous cases, such as the Supreme Court’s decision in Hyatt v Kappos, reached similar rulings in the patent context.  However, this is the first time that a court specifically held that the expenses included USPTO attorney salaries.

So, before appealing a PTAB or TTAB decision to District Court rather than the Federal Circuit, patent and trademark applicants should weigh the costs of the proceeding (including USPTO expenses) against the potential benefits of introducing additional evidence.

[NOTE:  Special thanks to my colleagues Jeff Schwartz and Lindette Hassan of Fox Rothschild LLP for co-authoring this post.]

Court action against FCC’s “net neutrality” rules could change rules of Internet service

The “open” nature of high-speed Internet service in the United States may be at risk based on a new appeals court ruling that struck down the Federal Communication Commission’s “net neutrality” regulations.

Since 2010, the FCC regulations, known as the “Open Internet Order,” have prohibited broadband service providers (ISPs) from blocking access to lawful content. as well as from blocking applications that compete with the  provider’s service offerings. The Order also prohibits providers of fixed broadband service (i.e., non-mobile broadband) from unreasonably discriminating in transmitting lawful Internet traffic, such as by granting preferred status or speeds to websites that are affiliated with the provider or who pay a fee to the provider.

The Court’s decision in Verizon v. Federal Communications Commission struck down most of the Open Internet Order.  In particular, the Court said that the FCC went beyond its regulatory authority in imposing the anti-blocking and anti-discrimination rules on ISPs.

Notably, the Court did not say that the FCC could never impose such rules on ISPs. Instead, the Court found issue with the way that the FCC imposed the rules on ISPs. Specifically, the Court faulted the FCC for creating rules that could be considered common carrier obligations and then imposing them on ISPs that were not considered to be “common carriers” under the Communications Act.

The Court did uphold the Order’s requirement that ISPs disclose to consumers accurate information about their network management practices, performance and commercial terms of service.  So, although an ISP can now block or slow a particular website, it must disclose that practice to its subscribers.

The FCC is expected to appeal the decision.  Alternatively, the FCC could attempt to re-write the rules within the guidelines of the decision. Either way, it will be interesting to see whether any broadband service providers change the way that they deliver services to consumers. Under the Court’s ruling, an ISP who is also a cable service provider could block or slow certain over-the-top services so long as they disclose that fact to subscribers. An ISP could charge a higher fee for access to certain sites, or perhaps a reduced fee to consumers who are  willing to accept a more limited scope of the World Wide Web.   Alternatively, some ISPs may use the Court’s ruling as an opportunity to attract new consumers by pledging to make all sites freely available without blocking or discrimination.

Either way, consumers are likely to see changes in their broadband service soon based on the new ruling.

Court delays question of whether software patent should be upheld or overturned

In what may be the first of several software patent litigation matters that are placed in a holding pattern this year, the District of Delaware has stayed a group of patent infringement cases involving software patents pending the Supreme Court’s decision in CLS Bank Int’l v. Alice Corporation Pty Ltd.

As noted in a previous IP Spotlight post, in Alice the Court will consider the question of whether patent claims covering computer-implemented inventions are directed to patent-eligible subject matter.

In the Delaware cases, collectively captioned The Money Suite Company v. 21st Century Insurance and Financial Services, the plaintiff sued several defendants for infringement of a patent relating to use of a remote computer terminal to search for financial products for quoting. At least one of the defendants argued that the patent was invalid as being directed to ineligible subject matter because using a computer to generate a quote for a financial product was merely an abstract idea.

Noting that the Supreme Court will soon address the question of whether software is patent-eligible, the Delaware court stayed the cases until the Supreme Court issues its decision in Alice.

Design patents and prosecution history estoppel: restriction requirements can lead to surrender of alternate claim scope

A recent case from the Federal Circuit held that the principles of prosecution history estoppel apply to design patents. While the case is obviously significant for anyone involved in litigating a design patent, inventors and patent applicants should also know that the case indicates that restriction requirements can have a significant impact on the resulting scope of a design patent.

In Pacific Coast Marine Windshields Ltd. v. Malibu Boats, LLC, Pacific Coast Windshield figuresowned a design patent covering the design of a windshield for a boat.  Pacific Coast’s original application for the patent described several options for the design, including various vent hole configurations (four holes, two holes, or no holes), and designs with or without a hatch. During prosecution, the USPTO issued a restriction requirement, stating that the various vent hole and hatch configurations represented five patentably distinct designs. The USPTO required the applicant to elect one design for prosecution. In response, the applicant elected the design that depicted four vent holes and a hatch. The applicant also cancelled all figures that did not show a hatch and four vent holes.

After the patent granted, WindshieldPacific Coast sued Malibu Boats for patent infringement. Malibu Boats sold a windshield product containing three vent holes and a hatch, as shown in the image to the right of this text. Malibu Boats moved for summary judgment of non-infringement, arguing that its design could not be covered by the Pacific Coast patent because Pacific Coast specifically surrendered designs other than four-hole designs during prosecution.

Because the Malibu Boats design was not a four-hole configuration, the questions that the Court asked were: (1) did Pacific Coast surrender certain claim scope during prosecution for reasons of patentability; and (2) if so, was a three-hole design within the scope of surrender.  If the answer to both questions was “yes”, then the Court would have permitted summary judgment.

Regarding the first question, the Court answered “yes,” stating that prosecution history estoppel could apply to a design patent. However, the Court answered “no” to the second question, as the surrendered variations only described two-hole and no-hole designs. The Court then remanded the case to the district court to determine whether the three-hole design actually infringed the patent.

While Pacific Coast’s claims of infringement survived, the case does provide lessons for those who seek design patents in the U.S.  If a design patent describes several variations of the invention, then before filing the applicant should consider showing optional features as broken lines (representing elements that are not part of the claimed design) instead of solid lines (which are part of the claimed design). If that is not possible, then after receiving a restriction requirement the applicant should consider filing divisional applications to cover the non-elected designs. Otherwise, the canceled figures or non-elected designs could serve as an instruction manual for those who want to make and sell a product that avoids infringement of the patent.

New Data Breach 411 app helps companies navigate data breach laws

It’s a general counsel’s worst nightmare. Sensitive data. Gone. Stolen by faceless thieves who breached the company’s seemingly secure network.DataBreach411-2

As my partner Scott Vernick of Fox Rothschild recently stated:  “Data breaches can severely impact a company’s reputation and have debilitating consequences to businesses big and small.”

A new mobile phone app launched by the Fox Rothschild Privacy and Data Security Practice provides a guide to swift damage control in situations like this. The app—called Data Breach 411—can help companies who are affected by a breach navigate the various laws and regulations relating to data breaches. Currently, 46 states have laws in place addressing how organizations should prepare for and respond to the loss or theft of data.

According to Vernick:  “Our app is a ‘one stop shop’ for in-house counsel and privacy officers to instantly access the relevant state-specific details on what they need to do, who they need to notify, when and how. The ability to access these state rules at your fingertips can make all the difference in terms of what’s at stake for an organization: loss of reputational integrity, public trust and business, and time-consuming and costly remediation efforts.”

Information available via the Data Breach 411 app include:

  • State Security Breach Statutes: An alphabetical listing of the states that have data breach laws in place and links to all the relevant notification statutes.
  • HIPAA/HITECH Statutes: Breach notifications rules and other pertinent information related to the loss or theft of personal health information.
  • Resources: Links to credit agencies and credit monitoring services as well as the FTC website. Also, a section on COPPA – the Children’s Online Privacy Protection Act – and relevant information surrounding the mining of data on minors. This section also includes links to Fox’s Privacy Compliance & Data Security Blog and its HIPAA, HITECH and Health Information Technology Blog.

The Data Breach 411 app is currently available for free in the iTunes Store. An Android version will be available soon. To download the app, click here.