DOJ and FTC release new Antitrust Guidelines for Licensing of Intellectual Property

Updating policies that had been on the books for more than two decades, the U.S. Department of Justice and the Federal Trade Commission recently issued new Antitrust Guidelines for the Licensing of Intellectual Property.

The new Guidelines include several updates that reflect changes in the law since the 1995 guidelines were issued. For example, the new Guidelines now permit intellectual property license agreements to explicitly include provisions on resale price without being per se illegal. (Instead, price restraints in licensing agreements will now be analyzed under the rule of reason). The new Guidelines also contain changes relating to situations where an intellectual property license or transfer will be treated as a merger.

For more details and analysis of the new Antitrust Guidelines, my partner Ted Jobes recently published a summary that is available via this link on the Fox Rothschild website.

Federal Circuit: obviousness requires a clear and explicit explanation

The Federal Circuit recently vacated a Patent Trial and Appeals Board (PTAB) decision that found obvious several claims of a patent application relating to methods for re-configuring icons on a touch-sensitive display. In In re Van Os (Fed. Cir. Jan. 3, 2017), the court’s decision focused on the PTAB’s failure to provide sufficient reasoning for the rejection, rather than the question of whether or not the claims were in fact obvious.reconfiguration

The claims related to a user interface for a touch-sensitive display that would enter a “reconfiguration mode” after it detected a sequence of two touches that had different durations in particular locations of the display. The Examiner and the Board both found the claims to be obvious in view of two prior art patents.

The court found both the Examiner’s and the PTAB’s explanations to be lacking, stating:

Here, neither the Board nor the examiner provided any reasoning or analysis to support finding a motivation to add Gillespie’s disclosure to Hawkins beyond stating it would have been an “intuitive way” to initiate Hawkins’ editing mode. The Board did not explain why modifying Hawkins with the specific disclosure in Gillespie would have been “intuitive” or otherwise identify a motivation to combine.

The court explained that it had a long history of requiring Examiners and the Board to sufficiently explain the reasoning for an obviousness rejection:

Since KSR, we have repeatedly explained that obviousness findings “grounded in ‘common sense’ must contain explicit and clear reasoning providing some rational underpinning why common sense compels a finding of obviousness…. Absent some articulated rationale, a finding that a combination of prior art would have been “common sense” or “intuitive” is no different than merely stating the combination “would have been obvious.”

Because the Board and the Examiner failed to meet their burden, the court directed the USPTO to allow the claims and grant the patent.

How long does it take for the USPTO to issue a patent or register a trademark? (2016 edition)

At the end of each fiscal year, the USPTO releases a Performance and Accountability Report, with statistics about patent and trademark allowance rates, average pendency, and other details. The USPTO recently released its Performance and Accountability Report for Fiscal Year 2016. This means that it’s time for IP Spotlight’s annual review of the question:  “how long does it take to receive a patent or trademark registration?”

To answer that question, here are a few highlights from the USPTO’s FY 2016 report:

Patents:  The USPTO continued a five-year trend of reducing overall patent application pendency in FY 2016. The average time between filing and first office action was 16.2 months, down from 17.3 months in FY 2015 and 18.4 months in FY 2014.  Average total pendency also decreased to 25.3 months (from 26.7 months in FY 2015). These numbers are especially interesting when compared to those from only five years ago:  in FY 2011 the average wait times were 28 months to first action and 33.7 months total. It is clear that the USPTO has made significant strides toward reducing overall wait time for patent applications in recent years.

The wait times vary depending on the technology involved. Patent applications for computer architecture and mechanical engineering inventions generally experienced the longest waits, while applications in the biotech and organic chemistry fields moved relatively quickly. In particular, patent applications involving: Continue reading

Who should be listed as inventors in a patent application?

49458832 - inventor

49458832 – inventor

This is a question that all patent applicants must answer before filing a patent application. However, applicants often answer the question without fully understanding the criteria for “inventorship.” Applicants often simply presume that the inventors listed on an invention disclosure, or the authors of a publication, will be the inventors. This is not necessarily the case, since inventors of an invention and the authors of a document can be (and often are) different.

The consequences of failing to correctly identify the inventors in a patent application can be severe. If an inventor was omitted, the assignee of record may not be the sole owner of the patent rights.  In addition, an incorrect inventor list also may result in an invalid patent. Although inventorship can be corrected after a patent application is filed, and even after the patent grants, it’s much easier to get it right in the first place by answering a few key questions before filing the patent application.

To determine who is an inventor, consider the following:

  • Review the claims at the end of the patent application. The claims define the “invention.”
  • Participating in conception if the invention is the key.  Anyone who contributed to the conception of the invention is an inventor. In other words, anyone who suggested any of the steps or features listed in the claims is an inventor.
  • In contrast, a person who did not help conceive the invention is not an inventor. For example, a person who merely identified the problem is not an inventor unless they also helped conceive the solution. In addition, a person who reduced the invention to practice without helping to conceive it is not an inventor.

Omitting people who merely posed the problem, or who merely helped reduce an invention to practice from a patent application can be difficult, and may result in some bruised egos. For software-related inventions, the people who developed the design specification are typically inventors, but the people who actually created the code are typically not inventors since they merely reduced the design specification to practice. In life sciences, the individuals who specified the parameters for an experiment may be inventors, but the lab employees who actually performed the experiments are typically not inventors. In each of these cases, the coders and lab techs may have spent much more time and effort reducing the invention to practice than the inventors spent conceiving it. However, patent law rewards conception, which may not always equate to time spent or even level of difficulty of the work.

A person can be an inventor even if his or her contribution is relatively small. In fact, a person will be an inventor even if he or she only contributed to one of the features of one of the patent application’s claims. Because of this, it’s important to revisit the inventor list throughout the patent application process, in case claim amendments prompt a need to change the list of identified inventors.

[Image credit:  Ali Gokhan]

It’s December 1: time to update your DMCA agent designation

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14240670 – copyright

If you operate a website that accepts user-generated content, it’s time to contact the Copyright Office.

Many online service providers (OSPs) accept user-generated content. Examples include e-commerce websites that accept product reviews, news sites that publish user comments on posted articles, social media sites that permit users to share photos or videos, and even blogs who post comments from other users.

It can be very difficult for an OSP to determine whether user-generated content was created by the user who posted it, or whether the content infringes someone else’s copyright.

To protect OSPs from being liable for copyright infringement resulting from user-generated content, since 1988 the Digital Millennium Copyright Act (DMCA) has provided OSP’s a “safe harbor” from liability so long as OSPs follow certain procedures, including:

  • not actually knowing about the infringement;
  • not financially benefiting from the infringement;
  • when gaining knowledge of infringement, acting quickly to remove or disable access to the infringing material; and
  • designating an agent to receive notifications of claimed copyright infringement, and providing the agent’s contact information to the Copyright Office.

Effective December 1, 2016, the procedures for designating a DMCA agent have changed. Previously, DMCA agent designation was handled by completing a form and filing the form with the Copyright Office with a required filing fee. This has now changed.

Under the new DMCA agent designation procedure, all DMCA agent designations must be done online. Even OSPs who previously designated an agent must file an online designation to maintain their DMCA designations. Any OSP that previously designated an agent with the Office will have until December 31, 2017 to use the online system to update their agent designation. OSPs must create an account on the Copyright Office website and complete the agent designation form online.

The Copyright Office has published several video tutorials to help OSPs understand how to use the new online designation system. Those tutorials are available on the Copyright Office website.

[Image credit:  Pavel Ignatov]

White House urges restrictions on non-compete agreements

55276389 - businesswoman sitting with employment agreement in front of her.This week the Obama administration issued a “call to action” statement in which it urged state governments to restrict many of the non-compete agreements that employers often impose on employees. The statement calls on state legislatures to adopt certain “best practices” for regulating employee non-compete agreements, including:

  • banning non-compete clauses for certain categories of workers, such as workers under a certain wage threshold, workers in certain occupations that promote public health and safety, and workers who are unlikely to possess trade secrets;
  • refusing to enforce non-compete clauses against workers who are laid off or terminated without cause;
  • disallowing non-competes unless they are proposed before a job offer or significant promotion has been accepted;
  • requiring employers to give additional consideration (i.e., more than just continued employment) to workers who sign non-compete agreements;
  • encouraging employers to better inform workers about the law in their state and the existence of non-competes in contracts and how they work; and
  • encouraging the elimination of unenforceable provisions through the use of legal doctrines that make such provisions (or contracts containing them) void.

The statement follows the administration’s May 2016 report titled “Non-Compete Agreements: Analysis of the Usage, Potential Issues, and State Responses.” The administration stated that the May 2016 report was intended to address “issues regarding misuse of non-compete agreements and describe[] a sampling of state laws and legislation to address the potentially high costs of unnecessary non-competes to workers and the economy.”

The statement noted that the laws of three states (California, Oklahoma, and North Dakota) already contain significant restrictions on non-compete agreements signed by employees, and at least a dozen states have considered legislation in this area during the past year.  To accompany the report, the White House also published a “state-by-state explainer” of existing state non-compete laws to help interested parties understand the restrictions that are already in place across the country.

The proposal is certain to attract a significant amount of attention, both pro and con. Regardless of whether states adopt the statement’s recommendations, the statement does highlight the fact that many different standards for employee non-compete agreements exist across the country. Because of this, employers should be careful to note that a particular form agreement may be fine for employees in some states but less-than-ideal for employees in a different state.  The “explainer” document can be a helpful tool to help employers understand those differences when they hire new employees across the country.

[Image credit:  Kittisak Jirasittichai]

Will your patent assignment document satisfy new European Patent Office requirements?

19469909 - signing a document in the officeEffective November 1, 2016, new European Patent Office (EPO) Examination Guidelines governing the transfer of European patent applications will take effect. The new Guidelines make two changes that transacting parties need to know:

  1. the assignment document must include the signatures of both parties (i.e., assignor and assignee); and
  2. the assignment document must include the precise job title of each person who signs the document.

In the past, it was common for a patent holder to execute an assignment in favor of an assignee, without the assignee signing the document. Under the new Guidelines, the EPO will no longer accept an assignment document that uses the single-signature format.

In the past, some assignment documents would list the signing party as something like “authorized representative.” This EPO will no longer accept this practice, either.

The new Guidelines only affect the transfer of pending applications, not granted patents.  However, transacting parties should consider following the new Guidelines in all patent assignments, since the general contract laws of several European countries (including Great Britain and France) typically require both parties to sign a contract. The new Guidelines are also consistent with Article 72 of the European Patent Convention, which states that an assignment of a European patent application requires “the signature of the parties to the contract” (emphasis added).

(Thanks to my Fox Rothschild partner Marilou Watson for bringing this change to my attention.)

[Image credit:  Oleksandr Nebrat]