Cool Queuing Theory Model Suggests Continuations Not the Problem at the PTO

Recently on Bill Heinze’s I/P Updates, I read about a note published by George Mason authors entitled “Improving Patent Examination Efficiency and Quality, An Operations Research Analysis of the USPTO, Using Queuing Theory“. 17 Fed. Cir. B. J. 133, 163 (2007).    The authors were attempting to validate validate the PTO’s concern with excessive continuation filings and proposed new rules regarding continuations.  The model, which incorporated feedback and branching of applications, was based on two assumptions:

1. A priority queue processes higher priority items first, giving them a shorter queuing delay – but at only at the expense of longer queuing delays for lower-priority arrivals. Since the USPTO gives higher priority to RCEs and continuing applications than to regular new applications, large numbers of RCEs and continuing applications should result in disproportionate waiting times for regular new applications.
2. At the very least, a limit on the number of continuing applications would be desirable because continuing applications can produce multiple generations of unlimited numbers of high priority offspring. RCEs and multiple non-final office actions both contribute to the risk of starvation, but pose less potential risk than continuing applications because they do not produce parallel offspring (branching feedback).

Surprisingly, the study found that continuing applications were not the primary cause of congestion of patent applications at the PTO.  According to the model, the excessive number of non-final rejections per application was the main culprit. The non-final rejections in each round of prosecution exceeded by far the number of second and later RCEs and continuation applications.   Thus, limiting or prohibiting successive generations of RCEs and continuation applications as the only change will not be effective in reducing the backlog.  Instead, reducing non-final rejections per application would be more effective because it would relieve the PTO of its primary burden on the system. 

The note went on to say that hiring additional examiners is not an effective solution because the PTO would need to exponentially increase its personnel in order to keep up with its load of patent applications.  Instead, a policy change addressing the source of the problems is required.

 Thus, it looks like it is time for the PTO to revise its rules, which have already been brought into question by Tafas v. Dudas, described in my blog from Nov. 2.  Using research data and mathematical models may prove to be a valuable aid as the PTO leadership considers its next move. 

District Court Blocks PTO New Continuation & Claim Rules

The Eastern District of Virginia court hearing the case of Tafas v. Dudas issued a preliminary injunction on Oct. 31 blocking the PTO’s implementation of its new continuation and claim rules that were to go into effect on Nov. 1.  In that case, a number of plaintiffs, including Glaxo Smithkline, had joined together to block the rules.

The court examined the traditional factors in issuing a preliminary injunction: 1) likelihood of success on the merits; 2) irreparable harm in the absence of an injunction; 3) balance of hardships between plaintiffs and defendant; 4) public interest in the injunction. 

The court believed that the plaintiffs could suceed on the merits of the case.  The court noted that 35 U.S.C. 120 may prohibit limiting the number continuing applications that can be filed, and that the new rules could create retroactive effects on settled rights.  More specifically, the court found that plaintiffs had a vested right in the opportunity to file continuations and claims under the old rules, and an agency is not permitted to make retroactive rules.  The PTO’s guidelines for preparing an examination support document were also declared vague.

On the upside for the PTO, the court did rule that the PTO’s new rules were not arbitrary and capricious.

Further, the court agreed that the uncertainty of the new rules would cause plaintiffs irreparable harm.  The balance of hardships weighed in favor of the plaintiffs because they would face immediate harm once the rules were implemented, while any harm experienced by the PTO under a preliminary injunction would be gradual.  Because the public interest requires a stable patent system, an injunction would be appropriate.

Thus, the PTO was enjoined from implementing its new rules.  It was also enjoined from making any other new rules “restricting the number of continuing applications, the number of requests for continued examination, and the number of claims that may be filed with the PTO.”

The PTO posted a notice on its website of the decision, and noted that its examiners and staff would continue examining and processing applications under the old rules until further notice. 

Complaint filed to enjoin USPTO from implementing new rules

Glaxosmith-Kline has filed a federal complaint in ED Virginia’s “rocket docket” seeking to enjoin the USPTO from implementing the new patent rules.  The new rules address continuing applications, requests for continued examination, and examination of claims in patent applications.  They amend 37 C.F.R. sec. 1.75, 1.78, and 1.114, and add 37 C.F.R. 1.267.  GSK alleges that the Rules were promulgated without proper legal authority, and are also “vague, arbitrary and capricious.”  Further, they “prevent GSK from fully prosecuting patent applications and obtaining patents on one or more of its inventions.” 

GSK alleges that Congress has not empowered the PTO to promulgate such regulations.  As a federal governmental agency, the PTO obtains its power soley from Congress, under 35 U.S.C. sec 2 (and Congress, in turn, derives its authority regarding patents from the U.S. Constitution art. 1 sec 8 cl 8.)  Congress has not yet granted the PTO to make these rules, so GSK says that the PTO engaged in ultra vires rulemaking.

Further, GSK alleges, the new rules regarding continuing applications, requests for continued examination, and examination of claims in patent applications are inconsistent with current patent law passed by Congress.  This action violates 35 U.S.C. sec. 2, which gives the PTO power to promulgate rules and establish regulations to govern conduct of proceedings in the PTO, as long as they are not inconsistent with the law.  The extent of the PTO’s authority to promulgate rules is currently being debated in Congress.

Lastly, GSK argues that the Rules “pose an unconstitutional arbitrary and capricious regulatory taking of GSK’s patent and patent application property rights.”

These claims are much more serious than the complaint already filed on this issue.  It will be interesting to watch this debate flush out in parallel to current Congressional action regarding patent law. 

Do process steps in a product-by-process claim serve as claim limitations?

This is an old question, but deserving an occasional update:

The Manual of Patent Examining Procedure (“MPEP”) defines a product-by-process claim as “a product claim that defines the claimed product in terms of the process by which it is made . . .” Manual of Patent Examining Procedure (MPEP) § 2173.05(p).  Product-by-process claims were originally limited to circumstances where the product could not be described or distinguished from prior art solely in structural terms, but required reference to the process by which the product was made.  This principle was called “Painter’s Necessity Rule.”  In re Painter.  Today, however, the patent office no longer applies “Painter’s necessity rule” and issues product-by-process claims even where the applicant is able to describe and distinguish the invention solely in terms of composition or structure.  In re Hughes (permitted product-by-process claims even though applicant could describe the invention in structural terms); see also MPEP § 2173.05(p). 

Some district courts have approached analysis of product-by-process claims in infringement suits by explicitly following either Scripps Clinic & Research Foundation  v. Genentech, Inc., or Atlantic Thermoplastics Co. v. Faytex Corp..  A Scripps interpretation fails to limit a product-by-process claim by the process steps, and may render a competitor’s very similar product made by a different process an infringing product.  An Atlantic Thermoplastics interpretation would limit a patented product to the process described in the claim, thus distinguishing a competing noninfringing product from the patented product.  Judge Newman in her dissents states that it is most useful to focus on the facts of the case to determine whether the process limits the process in a product-by-process claim.  See Atlantic Thermoplastics Co., Inc., (Newman, dissenting).  The claims in Scripps were directed to a product that was new and unobvious, and because of its structural complexity, required definition in process terms.  See Scripps Clinic & Research Found.. To Judge Newman, the Scripps claims constituted “true product-by-process claims.”  Atlantic Thermoplastics Co., Inc..  

In contrast, claims similar to those in Atlantic Thermoplastics tend to be directed to relatively simple products that are capable of compositional or structural definition.  See Atlantic Thermoplastics Co., Inc.. Judge Newman refers to this class of claims where the product is old or readily described in structural terms but the process is new as “product of the process claims”.  Atlantic Thermoplastics Co., Inc..  Such products are not properly claimed using the product-by-process format, and thus should be infringed only when an identical or equivalent process is used.  Essentially, Judge Newman’s arguments bring Painter’s necessity rule back into the twenty-first century to apply it to the infringement context.                         

An alternative strategy that can be used independently to avoid choosing between Scripps and Atlantic Thermoplastics, or to support choice of precedent described supra, is to follow the quintessential case on modern claim construction, Phillips v. AWH Corp., and apply traditional construction techniques to product-by-process claims.  Traditional construction techniques involve referring to the specification and prosecution history to interpret patent claims.  For example, the court in Cryovac Inc. v. Pechiney Plastic Packaging, Inc., noted the dissonance in Federal Circuit precedent regarding infringement of product-by-process claims, and instead applied Phillips to find that “[T]he determination of whether the process is properly viewed as a limitation is a context-specific inquiry . . . whether [the claim] contains a product-by-process limitation or not, must be construed in light of the specification.”  The Court found that packing material made from layers oriented coextruded film was limited to the product as accomplished by a racking or blowing process, because the blowing process was described in the specification – both general description and examples – of the patent.    

In addition to the specification, Phillips directs the court and parties to examine the prosecution history of the patent to determine the definition of product-by-process claim terms.  If an applicant points to or adds process limitations to support novelty or nonobviousness or to distinguish prior art, such limitations “act as a limit on the claim for purposes of infringement analysis.”  Kennametal, Inc. v. Cerametal S.A.R.L..  For example, the patent claims in Kennametal, Inc. v. Cerametal S.A.R.L., which were directed to high pressure water jet nozzles, were originally rejected by the Examiner as anticipated by prior art.  In response to the rejection, the patentee amended the claims referring to “a high pressure injection nozzle member” to add the process language “formed by liquid phase sintering without imparting external pressure”.  The patentee stated that the amended claims were not anticipated by prior art because the prior art failed to teach the sintering process without the pressure.  The court recognized that the patentee “inserted the process language specifically to avoid the prior art,” and emphasized that “‘if claim scope is relinquished during prosecution on grounds of patentability, the doctrine of prosecution history estoppel provides that the relinquished scope can not (sic) be recovered’ in an infringement action.”              

These specification and prosecution history arguments may not only independently demonstrate that process steps limit its product claims, but also provide support for following Atlantic Thermoplastics and not Scripps.  For example, if a patent owner is able to analyze the composition and structure of the two competing products in order to bring an infringement suit, then is should not need to resort to the production process to support patentability and infringement.  In that case, the patent owner’s claim may more properly be described as a “product of the process claim” instead of a “true product-by-process claim,” evoking Atlantic Thermoplastics and eliminating Scripps as appropriate precedent to follow.

first to invent vs. first to file

On Friday, the House endorsed a bill encompassing some of the most significant changes in patent law in the last 50 years.  One of these changes defines “inventorship” of a patent as the first person or group to file the patent application, as opposed to the current practice of giving inventorship to the first person or group to “invent”.  The patent systems of most other countries grant patents to the first person/group to file the application.

Thus, it is said that this change to the first to file standard will bring the US patent system into harmony with that of the international community.  Foreign inventors will have less of a disadvantage in filing American patent applications.  Further, there is no problem of evidence or proof of inventorship that is experienced in the first to invent system.  Currently, the PTO and courts must expend time and other resources tracking evidence of parties who argue about who invented something first, right down to the question of what “invent” even means (first to conceive of the idea, first to reduce to practice, etc). 

However, independent inventors may find themselves at a disadvantage in this first to file system.  They do not have the resources or legal departments that big companies have, and thus may be slower to file applications than their counterparts.  Thus, the first people that have an idea and carry it through may not be the same people who are granted the patent.  In fact, many people argue that the new system will make it easier to claim (or steal) someone else’s ideas. 

Particularly in the United States, where independence and individuality are valued highly, this might be a tough change to swallow.  On the flipside though, this change to first to file will have the effect of giving the public the benefit of the invention faster.

Patent Local Rules

Local rules for patent cases have become all the rage these days.  It all started with the Northern District of California, followed by the Southern District of California, Eastern District of Texas, and the Northern District of Georgia, amongst others.  Some judges in jurisdictions without local rules have even adopted very similar sets of rules for their own use. 

These rules all have common features.  They require early disclosures of Preliminary Infringement Contentions and Preliminary Invalidity Contentions, together with supporting documents.  They require parties to set out a schedule at the Rule 26 conference, deciding the course of claim construction.  Parties must exchange lists of terms to be construed, preliminary constructions, and then submit a joint claim construction statement.  Construction briefs must be written.  Finally, the claim construction hearing (or “Markman Hearing”) is held, where the judge hears both parties’ constructions and supporting evidence, and finally decides on the construction to be used for the rest of the litigation.

The advantage of these patent local rules is that they set deadlines for the completion of claim construction discovery and the hearing, thus pushing the cases along the court docket.  Parties can focus early on what terms they need to research and construe, and what interpretations will work best for their arguments.  Early disclosure ensures cooperation in these endeavors.  Jurisdictions with these patent local rules are thus popular with plaintiffs who want resolution quickly.

However, patent local rules have been criticized because they may focus the issues too early, before the parties ( and the judge) really know what is at stake.  Rules that do not allow changes in construction after preliminary exchanges may be too rigid as parties realize later in the case that they missed important issues.  Further, many of these procedural events occur before the judge is able to comprehend technology involved.  For this, many have recommended neutral tutorial sessions for the judge, or assistance of Special Masters to help the judge learn the technology or science involved in the case.

The Boston Globe recently ran an article by Sacha Pfeiffer regarding the possibility of drafting patent local rules for D. Mass..  Judge Stearns gave positive comments, and a few other judges have responded positively.  The current President of the BPLA, Lee Bromberg, said that applying patent local rules in D. Mass. would make the jurisdiction more attractive for plaintiffs, lowering costs of litigation for local businesses (particularly some of the smaller biotech companies), and also boost business for local hotels, restaurants, law firms, and support as more people come to litigate.  Just look what making patent litigation more attractive did for E.D. Tex.!  It will be an interesting story to follow as rules are drafted and tried out by the D. Mass. judges.      

SCOTUS dismisses LabCorp v. Metabolite

In LabCorp v. Metabolite, LabCorp claimed that Metabolite infringed on its patent for assaying total homocysteine levels and correlating an elevated level with one of two vitamin B deficiencies in patients.  [Homocysteine is an amino acid in the blood, elevated levels of which may indicate cardiovascular or neurodegenerative diseases.]  

The Supreme Court granted cert to resolve the question of whether LabCorp’s patent was valid since it involves detecting a natural correlation between homocysteine and vitamin B, noting that “laws of nature, natural phenomena, and abstract ideas” are not patentable.  Recently, however, the Supreme Court dismissed the LabCorp v. Metabolite case as being “improvidently” taken in the first place.  

 

It has been argued that the Supreme Court’s dismissal of the case will encourage defendants to raise the issue of patentability of scientific principles whenever possible.  I am not sure I understand this argument, as the claim does not appear to be for the phenomenon of the natural correlation itself, but for an assay that will identify it.  It is a diagnostic tool.  LabCorp’s patent required utilizing scientific principles in a medical treatment, and the creation of a process shaped by knowledge of a biological system.  Most diagnostic tools and pharmaceuticals take advantage of the workings of biological systems; one must understand the system in order to manipulate it.  It is unclear to me why this assay is different.  Now it is left to the lower courts to hash it out for awhile until the Supreme Court is ready to grant cert again.

Hindsight Bias in Juries

Patents challenged on non-obvious validity grounds can be struck down because of hindsight bias in juries.  If a jury is presented with information about a problem, and given a description of the solution, the jury is less likely to rate an invention non-obvious than if it is provided only with infomation about the problem, and the fact that someone is trying to come up with a solution.  Even more interesting, if the jury is informed of the possibility of such a “hindsight bias” on top of the problem and solution information, they are still more likely to rate the invention as obvious.  (This is from an experiment described in the most recent Bill Heinze IP Updates Weekly).

This provides some insight into jury psychology, and human psychology.  There are numerous experiments wherein participants continue to believe one thing despite significant evidence to the contrary, or more relevant here, proceed to make the exact mistake they were warned against making. 

[This also makes me wonder whether juries are actually able to "ignore" statements by lawyers and evidence that a judge instructs them not to take into account in their deliberations.] 

The information thus begs the question of what lawyers and judges plan to do to rectify this problem.  Shall juries deliberate before they learn of a solution, come to a conclusion, hear the solution, and then have an opportunity to reconsider?  Should a judge not allow juries to ever hear of a solution?  Should the jury be composed of people with knowledge in the field of the patent, so that they would recognize whether a use or design is in fact obvious, without needing additional information? 

 

Judges decide meaning of “Therapeutically Effective”

I found this recently on Bill Heinze’s IP Updates Weekly:

In Amgen, Inc. v. Hoechst Marion Roussel, Inc. (August 8, 2006) the Federal Circuit disagreed with the district court’s construction of “therapeutically effective amount” in claim 1 of the patent …

According to Circuit Judge Schall:

Based on a reading of the claims in light of the specification, it appears that the patentee used the words “therapeutically effective” in order to broadly claim a pharmaceutical composition with a wide range of effects. Those effects do not necessarily include curing disease in humans. … the patentee noted that recombinant EPO, like that found in the claimed invention, “is the first therapeutic product which can be used to effectively treat hundreds of thousands of patients who suffer from anemia and other disorders involving low red blood cell counts.” In our view, this statement merely lists some of the uses of the invention, without restricting the scope of the invention. . . .

The dissenter wrote:

Significantly, I note that the words “therapeutically effective” are conventionally employed in the pharmaceutical arts to indicate that the claimed pharmaceutical product has utility in the treatment of a human disease where such treatment tends to cause the “healing” or “curing” of the disease.

He went on to say that the patent should reference the particular classes of patients for whom the drug would be “therapeutically effective.”

I agree with the majority here, to the extent that they define “therapeutically effective” as not necessarily including “curing.” In my experience in basic science research and its involvement in medicine, “therapeutically effective” generally describes an effect that can be contrasted with treatment with placebo – ie, the amount of the drug that has beneficial effects that proves to be significantly different from effects in patients treated with placebo (an inactive substance).

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Traditional Art and Patents

“Traditional Knowledge, Genetic Resources, Folklore and Gender was the subject that attracted some 100 participants, mainly women from local indigenous and rural communities, to a two-day seminar held in October in Río Hato, Panama. They came to analyze their problems and successes as producers of traditional handicrafts; to learn which intellectual property (IP) tools could help them protect and market their products; and to benefit from the experiences of other indigenous communities in exploiting IP. With cheap imitations undermining sales of traditional handicrafts, the seminar, organized by WIPO in cooperation with the Industrial Property Registry of Panama and with financing from the Inter-American Development Bank, proved to be a timely event…”

Panama: Empowering Indigenous Women Through a Better Protection and Marketing of Handicrafts

Female empowerment remains an important goal around the world. Education is essential to this goal. Without knowledge of what feats are possible, and how to accomplish those feats, women remain unaware of their potential and without the tools to realize it.

This article reminded me of my personal experiences in western Turkey, where I lived for two years during my early teens while my father worked for NATO. My family came to appreciate Turkish art, including copper and gold pieces, scarves, and carpets. My mother began to collect the carpets as individual pieces of art, as one would paintings, with the goal to represent as many Turkish villages as possible in her collection. The key was that each village incorporated signature characteristics into their carpets, making the work unmistakably identifiable to connaisseurs, or even to young American amateurs like me. These characteristics include particular colors, such as the deep red in a carpet from Yagcibedir; shapes, such as the ubiquitous octagon in rugs from Kars; and knot size, like the very tight knots in Hereke rugs.

My family bought carpets through two very different means. First, we could visit one of our trusted (male) dealers in Izmir, and sip our fresh chi with sugar cubes served as carpet after carpet was tossed on the floor in front of us for our appraisal. While this method was undoubtably the most efficient, we did not realize the value of the carpets and the stories behind them until we learned that we could visit the villages where the carpets were made.

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