Posts Tagged “Patent Quality”

Like many pieces of major legislation, the September 16th passage of the “America Invents Act” had some people running around with their hair on fire… whereas the reality is that many of its most ballyhooed provisions don’t come into play for a year or more. In the next couple of posts I’ll review what you need to think about now…and eventually review what you need to think about later.

The provisions of the act can be broken down into three groups; those coming into effect on or before November 15, 2011, those coming into effect on September 16, 2012, and those coming into effect on March 16, 2013. [For the nit-pickers, yes, some of the later provisions will apply to pending or even issued patents, so there is some earlier impact than their effective dates]. Anyway, let’s look at the most significant provisions that are or will be in effect by a month from now.

Provisions that affect everyone (financial):

  1. There is now a 15% surcharge on Patent Office fees.
  2. Starting 11/15 there is a $400 “electronic filing incentive” (actually a paper filing disincentive surcharge)
  3. There is now a “Micro-Entity” filing category that qualifies for a 75% discount off filing fees.

Item 1. is pretty clear and is already incorporated into the fee schedule from the PTO.
Item 2. is also clear – so if you are almost ready to file a (non-provisional) application on paper, do it before 11/15 to save yourself $400 ($200 small entity).
Item 3., when you read who qualifies as a micro-entity, is really directed at the independent inventor. Here are the qualifications:

  • Qualifies as a small entity;
  • Has not been named as an inventor on more than 4 previously filed patent applications;
  • Did not, in the calendar year preceding the calendar year in which the applicable fee is paid, have a gross income exceeding 3 times the median household income [approximately $50,200]; and
  • Has not assigned, granted, or conveyed (and is not under obligation to do so) a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is paid, had a gross income exceeding 3 times the median household income.

Note that being named as an inventor on a patent assigned to a prior employer doesn’t count against you.

Prior User Rights (trade secrets):

The only other immediately effective provision of importance to most of my clients is the expansion of “prior user rights”. Prior user rights means that you can be protected from an infringement suit IF you can prove that you were using the invention commercially in secret for at least a year before the patent holder disclosed the invention publicly.

Under prior law you had a Catch-22 situation; you could maintain your trade secret for years and suddenly risk being sued for infringement should someone else patent your invention, or you could file a patent application, which made your secret public, and risk never being able to enforce your patent (since the actual invention in a trade secret is inherently not visible to the outside world).

Under the new law you can maintain your secrets and still have an infringement defense. It would appear that you will be okay if you maintain an evidentiary chain showing that you were using the invention in commerce. For example, keep process control records that show use of the invention to make a product that you sold. Even stronger as evidence – involve a third party who has no financial interest in the invention. For example, a trusted customer to whom, under NDA, you have revealed the processes you used to fill his orders.


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In my previous post I indicated that Jaffe and Lerner’s suggestion of doing away with patent examination and the presumption of validity for an issued patent that goes with it – essentially changing patents into registration-only documents, as is the case for copyrights – might not be a bad idea after all.

But of course times have changed since they made that suggestion (2004) and the problems we have today are different from what they addressed then. Then, the problem was that anything could be patented; now the problem is that even good inventions have to fight inane, illogical, and unfair office actions at significant extra expense to the applicant.

Also, Jaffe and Lerner’s suggestion did not fix the problem they identified (poor examination); all it did was push “examination” down the road to a more expensive venue where, it was assumed, only “valuable” inventions would end up. The rest of the inventions, presumed not valuable because no one needs to enforce them, would be registered and make nice wallpaper. This latter presumption is flawed, particularly for the small entity.

The final flaw in their suggestion is that it is inconceivable that it would ever be implemented. The idea that Congress would ever change the fundamental definition of a patent is inconceivable.

Rather than try to change what a patent is, let’s make the process of getting a patent conform to the stated goals of the patent system. It is the patent examination process that is flawed, not the definition of a patent. Let’s fix the problem by changing the problem’s source. Incidentally, fixing the examination process can, for the most part, be achieved without legislative action.

There are two goals for the patent system: on the one hand, the system is intended to reward inventors who advance the state of “science and useful arts”, on the other hand the patent system is intended to provide the benefits of such an advance to society by adequately disclosing the advance in the patent specification. The primary function of the examination process, then, is to determine, by a reading the specification, whether the inventor has indeed made a significant enough advance to science and the useful arts to merit awarding a limited time monopoly on the invention, and whether the advance is disclosed clearly enough in the specification that other workers can make use of the advance.

I believe that the only way to achieve the goals of the patent system is to have an examination process that seeks the truth about the invention’s quality and that ensures that the specification explains the details of the invention. A model for such a process exists today, not in the patent world, but in the publication of academic research. In theory, if not in practice, the editor and reviewers for an academic journal are supposed to read a manuscript to determine both the value and originality of the underlying research AND whether the presentation in the manuscript is clear and complete enough that other researchers can try to replicate the results.

Without pretending to understand the “back story” of how we got here, it is clear to me that the current examination process, far from being an evaluation of the value and clarity of the invention and specification respectively, is instead an exercise in intentional obfuscation on the part of many applicants and an exercise in semantic gamesmanship on the part of many examiners. Patent examination is not supposed to be an adversarial process, but it is clear that, at almost every turn, applicants are wary of admitting or explaining anything, for fear it will be used against them and examiners seem intent on finding a word or phrase in the independent claims that they can use to cite obviousness or anticipation, even where there is none.

This process must change.

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Here’s a quiz. Raise your hand if you think an object held to a wall of a bottle with a clip is permanently secured to the wall. Nobody? Suppose I make this more clear, don’t you agree that a “member … is considered permanently secured as claimed [since] it can be left permanently in the bottle by the user.” What, still nobody raising a hand in agreement?

This nonsense argument about what “permanently secured” means was, of course, put forth by a patent examiner, not by me. And not only did the examiner take this position in an office action, but also the examiner maintained this position when the applicant appealed the to Board of Patent Appeals. Said the examiner: “the term ‘permanent’ is broad and does not impart any structure over the attachment taught by Goff, i.e, one can choose to keep the attachment between the bottle and the vent permanently.

At least the BPAI gave the examiner a dope slap in this case, but the real issue is that there is something wrong with a patent system where the examiner can push an applicant into the additional expense of an appeal or RCE (Request for Continued Examination) on such irrational grounds. And this is not an isolated case. I had one client receive an office action equating a terminal attached to a computer to a client computer in a client-server relationship. And another client receive an office action equating the key functional element of his invention to an element that was not even part of the cited prior art (think of having a camera with a  flash unit  rejected because some other camera patent described the sun as the source of light)

Examiners get away with this terrible behavior, and other behaviors that cost the applicant time and money to get good patents allowed, because there is little or no quality control system at the patent office. Oddly enough, just a few short years ago, the lack of quality examination was the root cause of too many bad patents being allowed. One really felt that, with just a modest effort, you could get any application through the system.

At that time (2004) Adam Jaffe and Josh Lerner wrote INNOVATION AND ITS DISCONTENTS: HOW OUR BROKEN
PATENT SYSTEM IS ENDANGERING INNOVATION AND PROGRESS, AND WHAT TO DO ABOUT IT. When the book was published, I didn’t much like their suggested “what to do about it”; now I’m beginning to think it wouldn’t be all so bad.

The heart of their proposal is to remove the presumption of validity that issued patents currently enjoy and instead make the patenting process more of a registration process, with validity to be determined later for those patents that someone cares about. That type of a change would be true patent reform.

Although the odds of such reform ever happening are nil, I’ll discuss what such a system could look like in a future post.

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Just over a week ago the PTO announced the start date of their latest attempt at improved service:  the “Track One” prioritized examination program, which was scheduled to begin May 4, 2011. Of course, this $4000 shakedown to deliver the service the PTO should have been delivering anyway would have benefited larger/better funded entities to the detriment of the rest of us.

Today, however, PTO Director Kappos announced that Track One was off-track for now, supposedly due to the deficit reduction provisions in the recently passed budget bill. Several other planned service improvements have also been put on hold. According to Kappos:

Effective immediately and until further notice:

  • Track One of the Three-Track program, which offers expedited patent examination and was scheduled to go into effect on May 4, 2011, is postponed;
  • The opening of the planned Nationwide Workforce satellite office in Detroit, as well as consideration of other possible satellite office locations, is postponed;
  • Hiring—both for new positions and backfills—is frozen;
  • IT projects will be scaled back;
  • Funding for Patent Cooperation Treaty (PCT) outsourcing will be substantially reduced;
  • Employee training will be reduced;
  • All overtime is suspended.

In addition, business units will be required to reduce all other non-compensation-related expenses, including travel, conferences and contracts.

Arguably part of the problem is that the PTO is not run as a self-supporting independent agency – the operating budget of the PTO is determined by Congress, independent of the fees collected. Thus, the six-month-late budget that just passed limited the PTO’s plans without regard to whether these new activities would be budget-neutral.

In any case, the hiring freeze, the overtime suspension, the reduced IT improvements, and the reduced employee training can only make matters worse for anyone trying to obtain a patent.

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