Strong Prima Facie Case of Obviousness Not Overcome by Objective Evidence of Nonobviousness

In Agrizap, Inc. v. Woodstream Corp. (March 28, 2008), the Federal Circuit decided

. . . a textbook case of when the asserted claims involve a combination of familiar elements according to known methods that does no more than yield predictable results. KSR, 127 S. Ct. at 1739. The only difference between the Gopher Zapper and the asserted claims, as conceded by Agrizap, is the type of switch used to complete the circuit that triggers the generator. The asserted claims simply substitute a resistive electrical switch for the mechanical pressure switch employed by the Gopher Zapper. As illustrated by the Dye and Madsen patents, the use of an animal body as a resistive switch to complete a circuit for the generation of an electric charge was already well known in the prior art. In favoring resistive switches over mechanical switches, both the Dye and Madsen patents are directed to solving the same problem as the ’636 patent—the malfunction of mechanical switches in environments prone to dirt and dampness. See ’746 patent col.1 ll.43-46, ll.53-63; ’809 patent col.1 ll.31-55.

In this case, the objective evidence of nonobviousness simply cannot overcome such a strong prima facie case of obviousness. Similarly, in Leapfrog Enterprises, Inc. v. Fisher-Price, Inc. we held that the objective considerations of nonobviousness presented in that case, including substantial evidence of commercial success, praise, and long-felt need, were inadequate to overcome a strong showing of primary considerations that rendered the claims at issue invalid. 485 F.3d 1157, 1162 (Fed. Cir. 2007). Based on the foregoing, we reverse the district court’s denial of Woodstream’s motion for JMOL as to the obviousness of the asserted claims.

"Control Means" Support Requires Algorithm to Transform Disclosed General Puprose Computer to Special Purpose Computer

In Aristocrat Tech. Australia PTY Limited v. International Game Tech. (march 28, 2008), the Federal Circuit affirmed that the patent’s disclosure of a general purpose, programmable microprocessor was not a sufficient disclosure of structure to satisfy section 112 paragraph 6 with regard to the "game control means" or "control means" in claim 1 of U.S. Patent No.
6,093,102 for a gaming machine.

According to Circuit Judge Bryson,

. . . Aristocrat also argues that, even if there is no disclosure of an algorithm in the patent, the disclosure of a microprocessor with "appropriate programming" is a sufficient disclosure of structure for means-plus-function purposes, because the evidence showed that one of ordinary skill in the art could build the device claimed in the ’102 patent based on the disclosure in the specification. That argument, however, conflates the requirement of enablement under section 112 paragraph 1 and the requirement to disclose the structure that performs the claimed function under section 112 paragraph 6.

Although the examples given in the ’102 patent might enable one of ordinary skill to make and use the invention, they do not recite the particular structure that performs the function and to which the means-plus-function claim is necessarily limited.
Whether the disclosure would enable one of ordinary skill in the art to make and use the invention is not at issue here. Instead, the pertinent question in this case is whether Aristocrat’s patent discloses structure that is used to perform the claimed function. Enablement of a device requires only the disclosure of sufficient information so that a person of ordinary skill in the art could make and use the device. A section 112 paragraph 6 disclosure, however, serves the very different purpose of limiting the scope of the claim to the particular structure disclosed, together with equivalents. The difference between the two is made clear by an exchange at oral argument. In response to a question from the court, Aristocrat’s counsel contended that, in light of the breadth of the disclosure in the specification, any microprocessor, regardless of how it was programmed, would infringe claim 1 if it performed the claimed functions recited in the means-plus-function limitations of that claim. That response reveals that Aristocrat is in essence arguing for pure functional claiming as long as the function is performed by a general purpose computer. This court’s cases flatly reject that position.

. . . Aristocrat was not required to produce a listing of source code or a highly detailed description of the algorithm to be used to achieve the claimed functions in order to satisfy 35 U.S.C. § 112 ¶ 6. It was required, however, to at least disclose the algorithm that transforms the general purpose microprocessor to a "special purpose
computer programmed to perform the disclosed algorithm." WMS Gaming, 184 F.3d at 1349. Because the district court correctly held that was not done in this case, we uphold the judgment of the district court.

* * *

In this case, Aristocrat acknowledges that the only portion of the specification that describes the structure corresponding to the three functions performed by the "control means" is the statement that it is within the capability of a worker in the art "to introduce the methodology on any standard microprocessor base [sic] gaming machine by means of appropriate programming." ’102 patent, col. 3, ll. 2-4. That description goes no farther than saying that the claimed functions are performed by a general purpose computer. The reference to "appropriate programming" imposes no limitation whatever, as any general purpose computer must be programmed. The term "appropriate programming" simply references a computer that is programmed so that it performs the function in question, which is to say that the function is performed by a computer that is capable of performing the function.

Aristocrat offers two responses to the district court’s conclusion that the patent did not disclose sufficient structure. First, Aristocrat argues that the specification disclosed algorithms that were sufficient to constitute a qualifying disclosure of structure. Second, Aristocrat argues that no disclosure of specific algorithms was necessary in any event.

As to the first argument, Aristocrat contends that the language of claim 1 referring to "the game control means being arranged to pay a prize when a predetermined combination of symbols is displayed in a predetermined arrangement of symbol positions selected by a player" implicitly discloses an algorithm for the
microprocessor. That is, when the winning combination of symbols is displayed, the program should pay a prize. But that language simply describes the function to be performed, not the algorithm by which it is performed. Aristocrat’s real point is that devising an algorithm to perform that function would be within the capability of one of skill in the art, and therefore it was not necessary for the patent to designate any particular algorithm to perform the claimed function. As we have noted above, however, that argument is contrary to this court’s law.

Aristocrat also points to language in claim 1 that, according to Aristocrat, "sets forth the mathematical equation that describes the result of practicing the third function." The language in question recites "defining a set of predetermined arrangements for a current game comprising each possible combination of the symbol position selected by the player which have one and only one symbol position in each column of the display means." The problem with Aristocrat’s argument is underscored by Aristocrat’s very characterization of the role of the equation: It describes the result of practicing the third function. That is, the equation is not an algorithm that describes how the function is performed, but is merely a mathematical expression that describes the outcome of performing the function. To be sure, as Aristocrat argues, the equation "restricts ‘appropriate programming’ to algorithms which result in the specified number of winning opportunities." But that argument simply concedes that the equation describes an outcome, not a means for achieving that outcome. The equation thus does not disclose the structure of the claimed device, but is only another way of describing the claimed function.

Finally, Aristocrat contends that "the written description delineates what constitutes ‘appropriate programming’ through the disclosed embodiments of the invention." Again, however, the description of the embodiments is simply a description of the outcome of the claimed functions, not a description of the structure, i.e., the computer programmed to execute a particular algorithm.

As noted by Professor Crouch,

The algorithm missing from ATA’s disclosure is almost certainly within the ability of an ordinary game programmer. In fact, I believe that it would only take me (a law professor) only a few hours to create a rough algorithm showing how the ATA software program could operate. Judge Bryson shot-down that argument: “Structure for a means-plus-function element must be provided in the specification regardless of whether the structure is already well known in the art.”

Noncommercial Speech Not Subject to Dilution Claim

In Smith v. Wal-Mart, No. 1:06-cv-526 (March 20, 2008), the U.S. District Court for the Nothern District of Georgia held that Smith’s parodic work considered noncommercial speech and therefore not subject to Wal-Mart’s trademark dilution claims, despite the fact that Smith sold the designs to the public on t-shirts (including 15 of the 62 shirts that were sold to Walmart's counsel) and other novelty merchandise.

According to Judge Batten,

. . . the juxtaposition of the similar and dissimilar—the satirical representation and the idealized image of Wal-Mart—conveys a scathing parody. In the “smiley eagle” Walocaust concept, the reference to the Holocaust and the image of the Nazi eagle clutching a smiley face at once portrays and contradicts the benign image that Wal-Mart portrays to the community. In the “SUPPORT OUR TROOPS” Wal-Qaeda concept, Smith transforms all-American “Wal-Mart” into the terrorist group “Wal-Qaeda” and satirically urges the viewer to support Wal-Qaeda’s troops, apparently
commenting both on what Smith considers to be Wal-Mart’s ruthless business tactics and its detrimental impact on the United States. Other concepts juxtapose Wal-Mart’s reputation for low prices with a reference to poor store security and the company’s family values imagery with the fact that it offers for sale inexpensive alcohol, tobacco and firearms—products known better for destroying families.

The Court thus concludes that Smith’s concepts adequately evoke Wal-Mart while maintaining their differentiation, and they convey Smith’s satirical commentary; thus, they are successful parodies. See Louis Vuitton, 507 F.3d at 261. The finding that Smith’s concepts are parodies does not preclude the likelihood of confusion analysis, however; it merely influences the way the likelihood of confusion factors are applied. . . .

Evaluating the overall balance of the seven likelihood of confusion factors, the Court finds that Wal-Mart has failed to demonstrate a likelihood that its trademarks “WALMART,” “WAL-MART,” and “WALiMART” and its word mark “ALWAYS LOW PRICES. ALWAYS.” would be confused with Smith’s “WALOCAUST,” “WAL-QAEDA,” “FREEDOM HATER MART,” or “BENTONiVILLEBULLIES ALWAYS” concepts. In so finding, the Court concludes that factors three (similarity of the marks), five (similarity of sales methods) and six (similarity of advertising methods), weigh in Smith’s favor, with particular emphasis on how different the appearance and usage of the marks were and how vastly the parties’ advertising methods differed. The Court concludes that factors one (actual confusion), two (strength of the mark), four (similarity of product) and seven (Smith’s intent) favor neither party.

In sum, the Court is convinced that no fair-minded jury could find that a reasonable consumer is likely to be confused by the challenged marks. See Anderson, 477 U.S. at 252. As a result, the Court GRANTS summary judgment to Smith on Wal-Mart’s claims of trademark infringement, unfair business competition, cybersquatting and deceptive trade practices.

. . . A claim of dilution applies only to purely commercial speech. Mattel, 353 F.3d at 812. See also Bolger, 463 U.S. at 66-67 (finding that materials do not become “commercial speech” simply because the author had economic motivation to create them). “The question whether an economic motive existed is more than a question whether there was an economic incentive for the speaker to make the speech; the Bolger test also requires that the speaker acted substantially out of economic motivation.” Procter & Gamble Co. v. Amway Corp., 242 F.3d 539, 552-53 (5th Cir. 2001) (emphasis supplied). “Thus, for example, speech that is principally based on religious or political convictions, but which may also benefit the speaker economically, would fall short of the requirement that the speech was economically motivated” and therefore would be considered noncommercial. Id.

At least one court of appeals has specifically addressed whether a social advocate selling t-shirts that carried the group’s social message was engaging in noncommercial speech, despite the fact that the group sold the t-shirts to the public for profit. See Ayers v. City of Chicago, 125 F.3d 1010 (7th Cir. 1997). In Ayers, the court distinguished limitations on “the sale of goods that are not themselves forms of protected speech,” noting that precedent allows more restriction on sales of nonexpressive goods than it does on goods that are forms of protected speech. Id. at 1015. The court likened t-shirts carrying messages of social advocacy to “the
sandwich boards that union pickets sometimes wear.” Id. at 1014. As such,
the t-shirts were “a medium of expression prima facie protected by the free-speech clause of the First Amendment, and they do not lose their protection by being sold rather than given away.” Id. (citing Heffron v. Int’l Soc’y for Krishna Consciousness, Inc., 452 U.S. 640, 647 (1981)).

The Court is convinced that a reasonable juror could only find that Smith primarily intended to express himself with his Walocaust and Wal-Qaeda concepts and that commercial success was a secondary motive at most. Smith has strongly adverse opinions about Wal-Mart; he believes that it has a destructive effect on communities, treats workers badly and has a damaging influence on the United States as a whole. He invented the term “Walocaust” to encapsulate his feelings about Wal-Mart, and he created his Walocaust designs with the intent of calling attention to his beliefs and his cause. He never expected to have any exclusive rights to the word. He created the term “Wal-Qaeda” and designs incorporating it with similar expressive intent. The Court has found those designs to be successful parodies.

Thus, Smith’s parodic work is considered noncommercial speech and therefore not subject to Wal-Mart’s trademark dilution claims, despite the fact that Smith sold the designs to the public on t-shirts and other novelty merchandise. Consequently, Smith’s motion for summary judgment on Wal-Mart’s trademark dilution claims is hereby GRANTED.

"I read that some of the first groups that were persecuted by the Nazis were unions and liberals," Mr. Smith reportedly told Janet L. Conley of the Fulton County Daily Report. "I thought, 'Wow. Taking over the world, persecuting unions and liberals. Sounds like Wal-Mart.'" Wal-Mart spokesman John Simley reportedly would not discuss the case except to say that the company was still studying the ruling and that Smith's attempt to "commercialize the holocaust" was "unprecedented."

It seems to the IPKat that one way to gauge the ubiquity of the public's consciousness of a brand is to see whether it features in parodies, satires and humorous pieces aimed at the general public. The [Onion's feature on] Dippin' Dots feature works well for US readers, but the brand is little known outside its home markets (see the brand's biography in Wikipedia).

TGIF for How to Get Sued

In "How to Get Sued: An Instructional Guide," my fellow Law.com network blogger J. Craig Williams gives a witty and accessible take on the world of litigation in the American court system. Aimed at the attorney or intelligent casual reader seeking light diversion, this irreverent how-to uses sharp wit to look at some of the more bizarre twists the legal system and rail against our litigious society. According to the forward by Ninth Circuit Chief Judge Kozinzki, "Just as it's hard to avert your eyes from a train wreck, it's very difficult to put doen a book that repeatedly illustrates not only how easily one can be swept into the sausage factory, but how hilariously difficult and Byzantine things can become once there."

Order the book at Amazon.com here, and check out Craig's “Lawyer2Lawyer” podcasts with co-host Bob Ambroji on the Legal Talk Network.

Thank Goodness It's Friday (and I still haven't been sued),

--Bill Heinze

40% of Section 337 Actions Go to Trial

According to Tom Jarvis in a webinar entitled "IP Litigation at the ITC: Recent Developments and Best Practices," about 40% of unfair import investigations before the U.S. International Trade Commission go to trial as compared to only about 3% of district court cases. However, settlements often occur after trial and frequently involve monetary payments.

"U.S. Import Exclusion Basics" is available here, along with a "Beginner's Guide to Unfair Import Investigations" here. Click here for an audio-visual Internet presentation on "Unfair Import Investigations at the U.S. International Trade Commission." Click here for more information on the importance of monitoring these ITC investigations.

Automatic Address Book Updates with Plaxo

Plaxo.com is an online service that offers free, automatic updating of contact information. Users simply upload their address books onto Plaxo's servers. Then, when that information is edited by any user, the changes appear in the Plaxo address books of all of the other users who listed the account changer in their own contacts. You can then access you Plaxo address book from anywhere on the Interet.

Plaxo plug-ins also support automatic contact addition and synchronization with all major local address books, including Outlook/Outlook Express, Mozilla Thunderbird, and Mac OS X's Address Book. With these plug-ins, when you add a new contact to your Outlook address book, and that contact is also using the Plaxo service, then your both sets of contact information will be automatically synchronized and updated whenever there is a change. You can also send out invitations to join Plaxo to any of your contacts that are not already members.

Learn more about Plaxo here and here. Download my Plaxo address card here, and

Keep in Touch.

UTBMS Intellectual Property Billing Codes Available from LEDES

The LEDES™ (Legal Electronic Data Exchange Standard) Oversight Committee (“LOC”) has now published the latest version of the UTBMS Intellectual Property Billing Codes. Links to the latest patent, trademark, and project codesets are available unter the UTBMS menu option in the left column of the LEDES homepage.

About the UTBMS Task Force and the LEDES LOC

The UTBMS Task Force merged its efforts under the LOC umbrella in 2006. It is now a permanent LOC Subcommittee charged with considering issues on the UTBMS codes used in legal electronic billing. Ledes is an international, voluntary, not-for-profit organization comprised of legal industry representatives and is charged with creating and maintaining open standard formats for the electronic exchange of billing and other information between corporations and law firms.

An Introduction to Intellectual Property Task-Based Billing

Until the last decade, law firm billing was relatively straightforward. Firms billed their clients in greater or lesser detail, typically providing in-depth narrative descriptions of the tasks and processes underlying their hourly charges. When issuing bills and providing the underlying detail, each firm followed its own approach.

In recent years, however, clients have become more focused on requesting additional billing information from their outside law firms, or asking that billing data be presented in specific formats. In some instances companies have wanted to analyze their costs along various dimensions to provide benchmarks for the more systematic evaluation of legal costs. In others, there has been a desire to develop a database of costs on discrete legal activities. Along with these trends, the rise of electronic legal billing and data exchange has created a flood of new information.

In order to address these and other challenges, many consumers of legal services have began to move toward “task-based billing” systems where standardized codes are used to identify common tasks and activities performed by different service providers. These types of management information systems are well-known in project accounting circles where costs and revenues are allocated according work breakdown structures of deliverables and tasks that need to be performed in order to complete a project. Perhaps the most well-known of these task-based billing systems outside the legal serves profession is the Health Care Procedure Coding System established by the U.S. Health Care Financing Administration (HCFA) in 1978 for the billing of health care services under Medicare and Medicaid. By similarly requiring legal bills to be categorized according to a standard set of tasks and activities, rather than by matter and day of month, it was hoped that service providers and consumers could get a better handle on where those dollars were going.

The Uniform Task-Based Management System

This new approach led to a confusing proliferation of different task and activity descriptions, until, in 1995, a consortium of legal service providers and consumers created the Uniform Task-Based Management System ("UTBMS") with standard code sets for four areas of law: litigation, counseling, bankruptcy, and projects. Each of these four UTBMS “codes sets” includes a hierarchical list of alphanumeric codes and corresponding terms and definitions that describe the universe of legal work in a discrete area of legal practice or specialization. The first element in each code is a letter identifying the corresponding area of law – “L” for litigation, “C” for counseling, “B” for bankruptcy, and “P” for projects – or a general cost type – “A” for activity or “E” for expense – as discussed in more detail below.

At the highest level of the hierarchy are “phases” that occur largely in sequential order during the course of a case or matter. For example, in the UTBMS “L” litigation billing code set, includes the following the phases at the top of the hierarchy:

L100 Case Assessment
L200 Development and Administration
L300 Pre-Trial Pleadings and Motions
L400 DiscoveryL500 Trial Preparation and Trial
L600 Appeal

Each phase consists of a number of “tasks” providing further detail under the phase level in the coding hierarchy. Tasks are intended to capture tangible work product produced or business results achieved so that, for each billing period, the time charges by attorney or other professional are recorded by task. The intent is to provide a true picture of the labor cost of each task. For example, here are the task codes under the L300 discovery phase code above:

L310 Written Discovery
L320 Document Production
L330 Depositions
L340 Expert Discovery
L350 Discovery Motions
L360 Other Discovery

Each of the phase headings and tasks also includes short descriptions such as

L300 Discovery. Includes all work pertaining to discovery according to court oragency rules.

L310 Written Discovery. Developing, responding to, objecting to, and negotiating interrogatories and requests to admit. Includes mandatory meet-and-confer sessions. Also covers mandatory written disclosures as under Rule 26(a).

Also provided with the legacy UTBMS code sets are optional “activity” codes that are intended for use with all of the legal areas in order to describe how work is accomplished within a given task code. Activities codes represent the second field to be (optionally) recorded by timekeepers after a task code:

A101 Plan and prepare for
A102 Research
A103 Draft/revise
A104 Review/analyze
A105 Communicate (in firm)
A106 Communicate (with client)
A107 Communicate (other outside counsel)
A108 Communicate (other external)
A109 Appear for/attend
A110 Manage data/files
A111 Other

However, instead of (or in addition to) activity codes, many consumers of legal services allow there providers to provide the typical detailed descriptions services.

In addition to phase, task, and (optional) activity codes, expense codes are also provided for recording out of pocket costs, sometimes referred to as “disbursements,” such as witness fees and transcripts:

E101 Copying
E102 Outside printing
E103 Word processing
E104 Facsimile
E105 Telephone
E106 Online research
E107 Delivery services/messengers
E108 Postage
E109 Local travel
E110 Out-of-town travel
E111 Meals
E112 Court fees
E113 Subpoena fees
E114 Witness fees
E115 Deposition transcripts
E116 Trial transcripts
E117 Trial exhibits
E118 Litigation support vendors
E119 Experts
E120 Private investigators
E121 Arbitrators/mediators
E122 Local counsel
E123 Other professionals
E124 Other

According to an article in the February 2, 2004 issue of "Legal Times," a joint study by the Association of Corporate Counsel and Serengeti Law found that a mere 4.4 percent of the 266 companies that were surveyed required the use of uniform task-based codes in 2002. And, perhaps more troubling, about one-fourth of those companies admitted that they don't use the coded data at all.

So, what's stopping task-based billing for legal services? The April 2004 issue of "Corporate Counsel," describes the UTBMS code sets are so unwieldy that the resulting mass of information often becomes overwhelming. According to a July 2003 article in Lawnet, law firms have also found it unrealistic to expect lawyers to code each and every time entry with two codes. "Lawyers look at the codification of legal services, and they're appalled by it," said David Briscoe, of Altman Weil. "They say, 'There's no way I'm going to take the time to learn this, and, besides, what I do does not fit into the list of codes.'" Electronic legal billing software providers have also been overwhelmed with the sheer number and variety of billing code sets.

The Canadian UTBMS Initiative

In November 1986, a Canadian UTBMS project was instigated at the suggestion of the Insurance Corporation of British Columbia (ICBC). Their legal department saw the value of the UTBMS system that had been developed in the United States. However, the uniform codes developed for the U.S. are not directly applicable to the Canadian legal system due to minor differences in process and terminology. Recognizing the value of a uniform code set for the Canadian legal community, ICBC requested the assistance of The Conference Board of Canada in bringing together a broad coalition of law firms and corporate legal departments from across Canada to address this issue.

An intellectual property code set was developed by the Canadian consortium. However, the code set is quite detailed and uses a variety of terminology that is unique to the Canadian legal system that would be difficult to apply to large multinational legal service consumers.

The UTBMS Update Initiative

The UTBMS Update Initiative (formerly at http://www.utbms.com/) was formed in the Spring of 2005 in order to address these and other issues by updating and enhancing the current code sets. The Initiative adopted a three-prong approach focussing on: 1) code updates, 2) international and 3) intellectual property. Shortly after its formation, the Initiative’s intellectual property committee collected proprietary billing code sets from various intellectual property legal services consumers and began the difficult process of distilling those materials into a generally-acceptable standard.

In April 2006, the Initiative’s intellectual property committee completed its draft patent billing code set and draft trademark billing code set, and voted to join the LEDESTM (Legal Electronic Data Exchange Standard) Oversight Committee. The Intellectual Property Task-Based Billing Codes Sets were then laid-open for public comments on May 26, 2006 and later revised and republished in view of those comments.

The UTBMS Intellectual Property Code Sets

Due to the transactional nature of most copyright-oriented projects, the UTMBS IP committee members decided to focus on just patent and trademark billing codes for the time-being. Their proposed UTBMS Intellectual Property Code Sets are arranged in a manner similar to the existing code sets, with phase and task hierarchies. Both IP code sets also use the same (optional) Activity and (required) Expense codes, along with some additional expense codes that are unique to intellectual property. Since the “P” prefix was already in use for the existing Project codes, the proposed Patent were designated with “PA,” while the Trademark codes were designated with “TR.” Here are the phase headings for each of the IP code sets:

Intellectual Property Task-Based Billing Phases

Patent Code Set

PA100 – Assessment, Development, and Administration
PA200 – Patent Investigation and AnalysisTrademark Code Set
PA300 – Domestic Patent Preparation
PA400 – Domestic Patent Prosecution
PA500 – International Patent Preparation
PA600 – International Patent Prosecution
PA700 – Other Patent-Related Tasks

Trademark Code Set

TR100 – Assessment, Development, and Administration
TR200 – Trademark Investigation and Analysis
TR300 – Domestic Trademark Preparation
TR400 – Domestic Trademark Prosecution and Renewal
TR500 – International Trademark Preparation
TR600 – International Trademark Prosecution and Renewal
TR700 – Other Trademark-Related Tasks

The PA100 and TR100 phase headings for patents and trademarks correspond to the L100 headings for litigation. However, the “Experts/Consultants” and “Settlement/Non-Binding ADR” were removed because it was felt by the committee that these items would be unlikely to occur during the assessment phase of an intellectual property matter.

Most client representatives on the committee also expressed a strong need to be able to easily separate their foreign domestic intellectual property costs. However, it was also agreed that the phase headings also needed to be internationalized in order to prevent the code sets from becoming country or region specific, like the Canadian intellectual property code sets mentioned above. The proposed scheme therefore distinguishes “domestic” and “international” phases.

It is expected that a client will identify for its intellectual property legal service providers which is the “domestic” jurisdiction. All matters outside that jurisdiction will then fall into the “international” phase headings. This arrangement allows cost centers in different countries of multinational consumers of legal services to separately identify how to differentiate among its domestic and foreign legal services billings.

For example, a German corporation with legal departments in the U.S. and Germany might choose to designate Germany as the domestic jurisdiction for legal service providers in all countries. This arrangement would allow the German corporation to easily compare matters where U.S. law firms that were managing foreign counsel in Germany against matters that were being handled directly by German firms. Alternatively, the same corporation might choose to identify the U.S. as the domestic jurisdiction for legal service providers in the U.S. which are managed by the legal department of its U.S. subsidiary, while Germany is identified as the domestic jurisdiction for all other legal service providers. For example, this latter arrangement might be chosen if the legal departments in the U.S. and Germany are essentially autonomous cost centers.

It was also generally agreed among the committee members that application preparation costs were significant enough to need to be separated from application prosecution costs.

Here are sample patent and trademark task identifiers for PA300 and TR300 involving patent and trademark “Domestic Application Preparation,” respectively:

Intellectual Property Task-Based Billing Phase and Task Samples

PA300 – Domestic Patent Preparation

PA310 – Provisional Patent Application Preparation - Domestic All actions associated with completing a provisional patent application that is to be filed in the ("domestic") home country or region of the applicant, including review of invention disclosure materials and prior art, interviews with the inventors, drafting and revision of application, preparation and execution of formal documentation (such as assignments, transmittals, and biological deposits), filing of application, and reporting to the client. Note that government fees and external expenses (or "disbursements"
in the U.S.) are included under E100.

TR300 – Domestic Application Preparation

TR310 - Application Preparation and Filing - Domestic All actions associated with completing a trademark or service mark application (including renewal applications) that is to be filed in the ("domestic") home country or region of the applicant, including obtaining the specimen of use from the client, scanning the specimen for electronic filing, discussion with the client to ascertain the dates of first use and first use in commerce, drafting and revision of the application, preparation and filing of
the application by electronic or paper formats, and reporting the results to the
client. This section includes all domestic trademark and service mark applications filed on the Principal or Supplemental Register. Note that government fees and external expenses (or "disbursements" in the U.S.) are included under E100.

It will be apparent from these examples that “reporting” letters to clients (such as for receipt of an Office Action or other official communication from a patent Office) have not been broken out separately from the tasks that are likely to be authorized by the client as a result receiving the reporting letter. Although service providers put varying degrees of effort into such initial tasks, the need for simplicity in the code sets was believed to overweigh the value of such minute breakdowns of billing information for clients. In fact, the task codes are numbered in groups of ten so as to allow clients to add additional, nonstandard codes for any such further breakdowns, and also allow additional codes to be added by the LEDES in the future to reflect significant changes in intellectual property procedures. In addition, each phase is also provided with an “X99” task code (where ”X” is the phase series) that service providers can use for tasks not captured in the in the existing codes for the particular phase, and/or that clients can designate for any special task information that they would like to collect.

Several new expense codes have also been added to capture out-of-pocket expenses that are unique to the intellectual property fields. Those include

E125 Translation
E126 Drawings
E127 Patent and Trademarks Records
E128 Searching and Monitoring
E129 Official Patent Fees, excluding post-issuance maintence, renewal fees and late fees
E130 Post-Issuance Maintenance and Renewal Fees
E131 Late Fees

Note that when searches, monitoring, drawing preparation, or other activities are completed by the law firm, rather than a third-party vendor, those activities are recorded under a task code, rather than an expense code.

The UTBMS Intellectual Property Billing Codes are available at no charge and without copyright by clicking on the UTBMS menu item in the left column of the LEDESTM (Legal Electronic Data Exchange Standard) Oversight Committee website at http://www.ledes.org/.

Bio Resources and Traditional Knowledge Raised at TRIPS Council

According to BRIDGES Weekly Trade News Digest - Vol. 12, Number 10, 19 March 2008, biological resources and associated traditional knowledge disclosure requirements featured prominently at a 13 March meeting of the WTO Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Brazil, India, Cuba, Peru, Ecuador, Pakistan, Thailand, Venezuela said that there was high and growing support among the WTO Membership for their proposed proposed amendment that would include a mandatory requirement to disclose the origin of biological resources and/or associated traditional knowledge in patent applications. It would also require evidence of compliance with prior informed consent and fair and equitable benefit sharing arising from the commercial or other utilisation of such resources and knowledge.

The TRIPS Agreement itself provides for a review of Article 27.3(b), which deals with the patentability of plants and "essentially biological" processes for producing them. The Doha mandate asked WTO Members to broaden this review to look at the relationship between the TRIPS Agreement, the Convention on Biological Diversity, and the protection of traditional knowledge and folklore.

Noticeably absent from the meeting's agenda was the enforcement of intellectual property protections, a contentious issue raised regularly by developed countries such as the EU and the US at recent sessions of the council. Developing countries have generally resisted efforts to make enforcement a 'standing issue' on the council's agenda, which would require it to be discussed at each meeting.

The TRIPS Council meeting concluded with the nomination of Ambassador Gail Marie Mathurin (Jamaica) as chair. She succeeds Nigerian Ambassador Yonov Frederick Agah.

Overargument Leads to Prosecution Disclaimer

In Computer Docking Station Corp. v. Dell, Inc. the Federal Circuit affirmed the district court’s holding of no infringement because the patentee disavowed an interpretation of "portable computer" that would encompass a computer with a built-in display or keyboard.

Claim 28 of U.S. Patent No. 5,187,645 [above] was representative of the three asserted independent claims, reciting "A portable computer comprising . . . said single connector for making all connections from the microprocessor to said specific computer peripheral devices."

According to the opinion by Circuit Judge Rader,

During prosecution, in a Response dated June 15, 1992, the applicants sought to
distinguish their invention from Herron [above]. The applicants’ statements clearly and unambiguously disavowed computers with built-in displays and keyboards – that is, laptops. At the outset of those statements, the applicants distinguished
their invention, a portable microprocessing system, from its peripheral devices:

The Applicants’ invention is a portable microprocessing system with a
microcomputer contained within a housing. As is typical of such systems, the microprocessor interfaces with several peripheral devices including a
keyboard, display, modem, serial and parallel port devices, a power source, etc. The Applicants’ system provides all of the interfaces for these devices at a set of interface connectors on the rear bezel of the housing.

Amendment to U.S. application no. 07/711,816, dated June 15, 1992, at 13. The applicants expressly listed a keyboard and display as peripheral devices. They also explained that the interface connectors for the keyboard and display are located on the rear bezel of the housing. If the keyboard and display were built-in or attached to the housing like a laptop, these peripheral connections would not be necessary.

In the same Response, the applicants also contrasted the advantages of their invention with the limitations of the Herron laptop:

The Applicants’ system therefore provides an extremely powerful utility. A full-sized microprocessor with large memory capacity is made completely portable. The processing unit housing or "brick" can be easily removed from one system and transported in a briefcase to another system. Rather, a requirement that would lead one away from the present invention. However, even that requirement can be an advantage over laptop computers in that than requiring a portable display and keyboard, the present invention concentrates on portability of an exceptionally large memory capacity in hard disk drive. . . . For the same sized unit as a conventional lap-top computer, the invention does require
that peripherals be made available at each locationhigher quality peripherals will more likely be used since they need not be transported. Thus, lap-top machines make concessions in memory, display and other areas in favor of portability. The Applicants’ system, on the other hand, is a portable full service microprocessing system which concedes portability of peripherals.

Id. at 14-15. (emphases added). In this statement, the applicants clearly distinguished their invention from computers with a built-in display or keyboard. They told the examiner that the invention concedes portability of peripherals, which they previously defined to include displays and keyboards, in favor of processing power and memory. As a result, they stated that the invention does not require a built-in display and keyboard. In fact, the applicants explained that the invention requires these peripherals at each location of use. In contrast, the applicants emphasized that laptops sacrificed the power of the claimed full-service microprocessing system in favor of built-in peripherals. The applicants also stated that the built-in display and keyboard of a laptop would be inferior in quality to the peripherals stored permanently at each location and used with the claimed invention.
Moreover, the applicants further distinguished their system from the Herron "laptop computer with its own flat panel display and keyboard," arguing that laptops did not have the memory capacity, utilities and functionalities of their system:

The Herron system does not allow a microprocessor having state-of-the-art memory capacity and other capabilities to interface to a full-service processing system as does the Applicants’ system. The Herron system allows a lap-top computer with its own flat panel display and keyboard to interface to other peripheral devices. This lap-top computer does not possess utilities and functionalities comparable to those of the Applicants’ system.

Id. at 17. The applicants also distinguished their invention from laptops based on how the devices connect to the docking station. Because the keyboard and display are not built into the claimed microprocessing system, the applicants described the system as able to fit vertically in the docking station. Because of its built-in keyboard and display, a laptop could not fit vertically. Specifically, the applicants stated: "The Herron reference discloses a docking module which is latched to the rear of a lap-top computer. The computer and docking module rest on a desk top." Id. at 16. "[T]he computer in Herron is not oriented vertically as in the Applicants’ system. It would make no sense to do so with the Herron lap-top with its attached keyboard and display. Therefore, Herron does not have the Applicants’ reduced footprint size." Id. at 17.

This Response to the examiner also referred to laptops. In this statement, the applicants saw that laptops too might find a use for the claimed system:

A single connector to implement all of the interfaces provides for easy
connection and disconnection and may be used to advantage with lap-top computers as well. For example, the lap-top system of Herron, et al. docks to several connectors making it difficult to align the connectors before docking.

This statement, however, does not bring a laptop within the scope of the claims. Instead, the statement suggests that one component of the claimed invention, a single docking connector, could be used with laptops. The single docking connector is one of several limitations recited in the claims, recited separately from the portable computer limitation. Thus this reference to laptops, if anything, just represents another attempt to distinguish the invention from the laptops of Herron.

A careful reading of the prosecution history leaves little doubt that the distinctions between the invention and Herron are more extensive than only the single connector limitation. This court observes that the applicants distinguished their invention from the prior art in multiple ways. Moreover, the examiner’s citation of the single connection limitation in the reasons for allowability does not erase the applicants’ clear disavowal of laptops. . . .

"While the result of Standard Oil and Computer Docking may be fair and equitable, it comes with a price," notes Professor Wegner:

To interpret the scope of claims under Standard Oil and the literally dozens of
following cases including Computer Docking, it is necessary to parse the wording
of an often thick prosecution history.

As technology gets more complex, how is a district court judge without technical background or experience and a political science and history major as his two clerks to fathom whether there is or is not a prosecution disclaimer?It is no wonder that there is such a high reversal rate for claim construction rulings, given the formalistic doctrines that have evolved over the past generation.

Chatham House Rule Comes to WIPO Development Agenda

According to William New writing for Intellectual Property Watch on March 21 in "Proponents: Low Better Than Poor For WIPO Development Agenda" much of the latest meeting on the WIPO Development Agenda was held in informal status, an increasing practice at WIPO which participants said results in no record being produced by the secretariat on that part of the proceedings:

An unusual arrangement was made that kept accredited nongovernmental
participants from reporting on what was said in the room for most of the
meeting, according to committee sources. WIPO has nearly 200 accredited NGOs (a
majority are industry-oriented), and they are allowed to sit in the plenary room
and even make scheduled interventions during negotiations (unlike the press, who
are never allowed to enter the room). A number of NGOs [such as the Third World Network] usually report on activities in the room, including through almost real-time blogs.

But frequently, meetings have been moving into informal status, leaving accredited nongovernmental participants outside the room. In last week’s meeting, a different kind of deal was struck that could set a precedent for WIPO meetings. When the meeting was heading into informal status on the second day,NGOs brokered a deal whereby they could stay in the room if they agreed to follow a form of Chatham House rules, meaning they might report on what was happening, but without mentioning specific nations or individuals’ names.

According to Royal Institute of International Affairs at Chatham House, the benefit of using the Rule is that

It allows people to speak as individuals, and to express views that may not be those of their organizations, and therefore it encourages free discussion. People usually feel more relaxed if they don't have to worry about their reputation or the implications if they are publicly quoted.

Is the Rule used for all meetings at Chatham House?

A. Not often for Membership Events; more frequently for smaller research meetings, for example where work in progress is discussed or when subject matter is politically sensitive. Most Chatham House conferences are under the Rule.

TGIF for Keeping Your Eye on the Ball

U.S. Patent No. 6846244

to Edward E. Davis

of Whiteville, NC USA

Thank Goodness It's Friday,

--Bill Heinze

Trademark Declaration Audits for Fraud Remediation

In "The Fraud Factor: U.S. Trademark Owners Beware!," Carrie Webb Olson recommends

. . . conducting an audit of any trademark registrations that are key to the company's business and are likely to be enforced against second-comers to the market. A careful review of recitations of services and identifications of goods alongside marketplace specimens in support of each and every item listed in the registration will identify misstatements and potentially vulnerable registrations. Where problems are identified, the registrant should consider filing replacement applications with the PTO.

In Grand Canyon West Ranch LLC v. Hualapai Tribe, 78 USPQ2d 1696 (TTAB 2006), the
Board distinguished between a claim of fraud and a claim of nonuse of all of the covered
goods or services. According to Beth Chapman in "TTAB Decisions on Fraud in Submissions in Trademark Applications/Registrations,"

fraud requires an element of intent and must be proved by “clear and convincing evidence,” whereas intent is not an element to a claim of nonuse and an enhanced standard of proof is not required. Provided the mark was used on or in connection with at least some of the covered goods or services at the time a use-based application is filed, and fraud is not pleaded by the Opposer, Applicant may cure its
nonuse by deleting the goods or services on which the mark was not in use.

271(e) Safe Harbor Applies to Unfair Import Investigations Until Infringing Acts are Reasonably Likely to Occur

In Amgen Inc. v. International Trade Comission (March 19, 2008), the Federal Circuit
affirmed that the safe harbor provisions of 35 U.S.C. 271(e)(1) apply to process patents in actions under Section 337, when the imported product is used for the exempt purposes of 271(e)(1).

Under the "safe harbor" provisions of section 271(e)(1):

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

According to Circuit Judge Newman,

In Kinik v. United States International Trade Commission, 362 F.3d 1359 (Fed. Cir. 2004) this court explained that '271(g) provided a new right and remedy in the district court, but held that the Tariff Act remedy of exclusion based on practice of a patented process was unchanged, and that the exceptions set forth in '271(g)(1) and (2), shown supra, did not apply in Section 337 cases. . . .

[Under 35 U.S.C. '271(g), " Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. . . . A product which is made by a patented process will, for purposes of this title, not be considered to be so made after--
(1) it is materially changed by subsequent processes; or
(2) it becomes a trivial and nonessential component of another product."]

We conclude that the Commission's ruling is in consonance with congressional policy as set forth in enactment of '271(g), and as elaborated by the Supreme Court in its applications of the safe harbor statute.

In enacting '271(g) the legislative history included the policy statement that:

Specifically, the Committee does not intend that it shall be an act of infringement to import a product which is made by a process patented in the United States "solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs." See 271(e)(1) of title 35, United States Code. Congress previously decided that certain actions do not constitute patent infringements and this Act does not change that prior policy decision.

S. Rep. No. 100-83, 48 (1987). Implementing in other contexts this broadly stated congressional policy, in Merck KgaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005) the Court explained that Congress intended that the immunity of regulatory activity not be inhibited, stating that "'271(e)(1)'s exemption from infringement extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA." Id. at 202 (emphasis in original). And in Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990) the Court held that '271(e)(1) includes medical devices, although the statute mentions only drugs and veterinary products; the Court stated that "[t]he phrase 'patented invention' in '271(e)(1) is defined to include all inventions, not drug-related inventions alone." Id. at 665. In both Merck and Eli Lilly the Court stressed the congressional purpose of removing patent-based barriers to proceeding with federal regulatory approval of medical products. This purpose and its application in precedent weigh heavily against selectively withholding the '271(e)(1) exemption depending on whether the infringement action is in the district court or the International Trade
Commission. We thus affirm the Commission's ruling that the safe harbor statute
applies to process patents in actions under Section 337, when the imported product is used for the exempt purposes of '271(e)(1).

. . . To the extent that the Commission held all importation and all uses exempt while FDA approval was pending, the safe harbor statute does not so provide.

. . . Although '271(e)(1) negates infringement by the imported EPO, the projected FDA approval established the Commission's jurisdiction to review and provide remedy to take effect as appropriate after the approval is granted and '271(e)(1) no longer shelters liability. When it has been shown that infringing acts are reasonably likely to occur, the Commission's obligation and authority are properly invoked.
The Commission erred in holding that it lacked jurisdiction under Section 337 absent actual sale or contract for sale of the imported EPO.

GUATANAMERA Geographically Misdescriptive for Cigars

In Corporacion Habanos, S.A. v. Guantanamera Cigars Co., Opposition No. 91152248 (February 29, 2008), the U.S. Trademark trial and Appeal Board sustained an opposition to registration of that mark"GUANTANAMERA" for cigars on the ground that it is primarily geographically deceptively misdescriptive under Section 2(e)(3). As noted by John Welch at the TTABlog, "the Board distinguishe[d] between three groups of U.S. consumers: those of Cuban extraction (who would recognize the Cuban idioms); Spanish-speaking consumers (who would understand the lyrics of the song as referring to Guantanamo); and others (who, like me, would think only of the song without realizing that it had anything to do with Guantanamo, Cuba)."

According to the Board,

Despite this evidence, we are not persuaded that the consuming public would recognize the primary meaning of the mark in the context of applicant's goods as the song “Guantanamera.” First, evidence that the song was a hit fifty years ago, was sung by a folk singer from another era or was sung in one scene in a movie is of minor probative value regarding the notoriety of the song today. Second, even if the song is well known in the United States, one of the refrains in the song includes the phrase “guajira guantanamera,” which means “a country girl from Guantanamo.” See Lema Diccionario De La Lengua Espanola, opposer's notice of reliance ex. 21. Thus, even if
consumers consider the mark as referring to the song by the same name, such consumers, who know the song and who know Spanish, will know of the geographic significance of “Guantanamera” from the song’s lyrics. We agree with opposer that the song actually reinforces the primary significance of “guantanamera” as a generally known geographic location. Brief at p. 30. Third, Professor Gonzales’ statement quoted above regarding the American public’s knowledge of the word “Guantanamera” actually supports opposer’s position, at least for those who know
Spanish; Professor Gonzales also testified that “[i]n the song, ‘Guantanamera’ refers to a girl from Guantanamo.” Opposer's notice of reliance ex. 1 at ¶ 10. Fourth,
applicant's goods are cigars, and the record reflects that tobacco and cigars from certain countries, such as Cuba, are more highly regarded than tobacco and cigars from other countries. From this, we can infer that U.S. consumers of cigars, even those who know that Cuban goods cannot be sold in the United States due to the U.S. embargo on Cuban goods, will have a heightened awareness of terms which have a plausible geographic meaning. In the context of applicant's goods, consumers will ascribe the geographic meaning to the mark rather than, as applicant suggests,
associate the mark with the title of a Spanish language folk song.

[FOOTNOTE 7: As to such consumers, they will know of Cuban cigars due toarticles about Cuban cigars in U.S. magazines such as Smoke magazine, Morejon ex. 10; and U.S. books such as Shanken’s Cigar Handbook, A Connoisseur’s Guide to Smoking Pleasure (1997) (“Cuba has a long tradition as the source of the best cigar tobacco …
Cuban cigar tobacco is still acknowledged by many as setting the standard that the rest of the world follows”), opposer's notice of reliance ex. 40. They will also know about Cuban cigars through their travels to foreign countries where Cuban cigars are
available for sale.]

In the context of applicant's goods, consumers will ascribe the geographic meaning to the mark rather than, as applicant suggests, associate the mark with the title of a Spanish language folk song.

Fraudulent Nonuse Voids Trademark Registration in Classes Where Fraud Was Committed

Thanks to John Welch's TTABlog for writing about Herbaceuticals, Inc. v. Xel Herbaceuticals, Inc., Cancellation No. 92045172 (March 7, 2008) where the U.S. Trademark Trial and Appeal Board stated that a registration is void in the international class or classes in which fraud based on nonuse has been committed. According to the Board,

Contrary to Xel’s assertion, partial cancellation is not the appropriate remedy here. Partial cancellation would merely place Xel in the same position in which it would have been had it filed statements of use which accurately reflected the goods on which the marks were being used. Rather, if fraud can be shown in the procurement of a registration, the registration is void in the international class or classes in which fraud based on nonuse has been committed.

[FOOTNOTE 5: Xel's reliance upon Grand Canyon West Ranch LLC v. Hualapai Tribe, 78 USPQ2d 1696 (TTAB 2006), in support of its contention that partial cancellation is the appropriate remedy under the circumstances is misplaced. In that case, the Board found that, in view of applicant's nonuse of the involved mark on some of the services identified in the involved application, partial judgment as to the goods for which use of the mark was not made was appropriate. However, that was because no fraud claim had yet been pleaded and the Board was only concerned with the question of use or non-use for particular items.]

See General Car and Truck Leasing Systems, Inc. v. General Rent-A-Car Inc., 17 USPQ2d 1398, 1401 (S.D. Fla. 1990), aff'g General Rent-A-Car Inc. v. General Leaseways, Inc., Canc. No. 14,870 (TTAB May 2, 1998).

"In other words, fraud may knock out a single class in a multiple-class registration," notes Welch. "In the instant case, however, each registration of the six registrations involved a single class of goods."

Obviousness Under Chinese Patent Law

According to Santa Clara Law student Xin Ma in "Obviousness Under Chinese Patent Law,"

When determining obviousness, Chinese Patent Law uses substantially the same factors and elements as the corresponding United States statutes and case law, except with lower standards in determining “one with ordinary skills in the art,” higher requirement for prior art (although likely to change in the future), and greater leeway for the examiner or judge to decide on the validity of the patent. After KSR, it is generally believed that it will be harder for a patent to satisfy the “obviousness” requirement in the United States. However, there is no sign yet that China will raise its bar to patentability, especially given the fact that the “market force” is not a factor in either Chinese Patent Law or other Chinese patent regulations. It is not mentioned in the latest proposed amendment to the Chinese Patent Law. Therefore, the difference in patentability between China and the United States, although small, may increase after the KSR ruling.

Top Ten Rocket Dockets by Median Time-to-Trial

According to Peter Zura's 271 Patent Blog writing about the 2008 PricewaterhouseCooper Patent Litigation Study:

1. ED Virginia - 0.88
2. WD Wisconsin - 0.913
3. CD California - 1.714
4. MD Florida - 1.715
5. ED Texas - 1.79
6. Delaware - 1.89
7. Kansas - 1.89
8. ED Pennsylvania - 1.91
9. SD Texas - 1.99
10. ED Michigan - 2.03

Amoung the other facts noted by Zura,

Some notable 'Crawler' dockets include Massachusetts (3.76 years) and Connecticut (4.66 years).

. . . . Overall, the study found that patent holders have been successful 37% of the
time overall, with a 19% win rate in summary judgments and a 57% win rate at
trial. 32% of summary judgments are appealed, with 59% modified or reversed;
while 43% of trial decisions are appealed, with 67% modified or reversed.

USPTO Patent Allowance Rates Down to 54%

According to the Intellectual Property Owners Association on March 18, 2008:

• USPTO Patent Allowance Rates Are Down to 54% in 2007
• USPTO Has Reiterated Its Support for Required Searching
• New USPTO Ethics Rules Are Expected Soon

"The most important single reform that can be made to facilitate foreign patenting by Americans is the implementation of patent “worksharing” that would permit American procurement of foreign patents here at home," comments Professor Wegner. "The opposite approach is “applicant quality submissions” with total examination at home." In his view,

The theoretical victory of TRIPS is the creation of a global patent regime
where Americans can obtain overseas patent protection: In various manufacturing industries, perhaps the only way that jobs can be kept at home and not suffer overseas price competition is through establishment of a strong foreign patent portfolio to kill competition at the source.

American manufacturing industries simply are not filing patent applications
in foreign countries. This is true not just in China and other emerging Asian states but even Japan, a first world market where patents should be obtained to block imports. Yet, the reality is that Americans are obtaining patents abroad in pitifully small numbers. In contrast to Japanese industry where just ten (10) companies obtain 15,000-plus American patents per year, all American-owned patents in Japan number just 6,000.

USPTO Reivises Procedure for Withdrawing from Patent Applicant Representation

Starting May 12, 2008, the U.S. Patent and Trademark Office (Office) has revised its procedures for handling requests to withdraw from representation by a practitioner of record in a patent application. Under the revised procedure, the Office will no longer require that there be at least 30 days between approval of the request to withdraw as a practitioner of record (Request) in a patent application and the later of the expiration date of a time period for reply or the expiration date of the period which can be obtained by a petition and fee for extension of time under 37 CFR 1.136(a). Instead, pursuant to 37 CFR 10.40, the Office will require the practitioner(s) to certify that he, she or they have:

1. given reasonable notice to the client, prior to the expiration of the reply period, that the practitioner(s) intends to withdraw from employment;
2. delivered to the client or a duly authorized representative of the client all papers and property (including funds) to which the client is entitled; and
3. notified the client of any replies that may be due and the time frame within which the client must respond.

The Request for Withdrawal As Attorney or Agent and Change of Correspondence Address (Form PTO/SB/83) will be changed to provide a section wherein practitioners may certify the completion of the above-listed activities necessary for the request to withdraw from representation to be granted. The failure to do so may subject the practitioner to discipline. See, e.g., In re Hierl, http://www.uspto.gov/web/offices/com/sol/foia/oed/disc/D2006-19.pdf.

Certain exceptions, however, may exist. For example, a practitioner requesting to withdraw because they have been terminated by the client may not be required to certify to above item (1). However, if the practitioner cannot make all of the certifications, an explanation detailing why the certification cannot be made must be included with the Request.

Provided the Request is filed prior to the expiration of a time period for reply or the expiration date of the period which can be obtained by a petition and fee for extension of time under 37 CFR 1.136(a), the Office will review the Request and render a decision. However, any Request that is filed after an application is abandoned or after a patent has issued will be placed in the application but generally will not be treated on the merits.

The Office will also no longer accept address changes to a new practitioner or law firm filed with a Request, absent the filing of a power of attorney to the new representative. The Form PTO/SB/83 will be modified to indicate that the Office will only accept changes to the most current address information provided for the assignee of the entire interest who properly became of record under 37 CFR 3.71 or, if no assignee of the entire interest has properly been made of record, the most current address information provided for the first named inventor. This change has been made in order to avoid subsequent correspondence being directed to an incorrect address or to a practitioner who has not been appointed as practitioner of record by the applicant.

According to the Notice,

On many occasions, the submitted Requests provided either no reason requesting
withdrawal or a reason that did not conform with 37 CFR 10.40(b) or (c). The practitioner requesting withdrawal as the practitioner of record from an application often requested a change of address to either a law firm whose practitioner(s) had not been appointed by the applicant or assignee in accordance with 37 CFR 1.32(b) or to an assignee who had not established ownership and the right to take action in accordance with 37 CFR 3.71. The Office also has been unable to approve requests because less than thirty (30) days remained between approval of withdrawal and the later of the expiration date of a time period for reply or the expiration date of the period which could be obtained by a petition and fee for extension of time under 37 CFR 1.136(a). For these reasons, the Office has decided to modify its procedures.

USPTO Requiring Description of Marks Not in Standard Characters

On March 14, 2008, the U.S. Patent and Trademark Office announced "Changes in the Requirement for a Description of the Mark in Trademark," which amends the Rules of Practice in Trademark Cases to require a description of the mark in all applications to register a mark not in standard characters. The USPTO will maintain its practice of printing the description of a mark on the certificate of registration only when the USPTO deems the description necessary to clarify what is claimed in the mark. The USPTO is issuing an examination guide on this subject, which will be incorporated into the next edition of the TMEP, to provide additional guidance in this area. The examination guide will be posted on the USPTO Web site, at http://www.uspto.gov/web/offices/tac/notices/notices.htm.

According to the new rule,

In response to several comments, the USPTO has clarified that no identification of the name of the particular stylized font is required when the mark includes a stylized font. Also in response to one comment, the USPTO notes that the description requirement is an application requirement, rather than one o the requirements for receiving a filing date, and the USPTO therefore neither proposes nor makes an amendment to the list of filing date requirements in 37 CFR 2.21(a). For TEAS Plus applications, the current filing requirement in 37 CFR 2.22(a)(15) for a description if the applied-for mark is not in standard characters remains unchanged.

. . . For visual marks, the USPTO reiterates its position that "[a] description cnnot be used to restrict the likely public perception of a mark. A mark's meaning is based on the impression actually created by the mark in the minds of consumers, not on the impression that the applicant states the mark is intended to convey.'' TMEP section 808.02. Consistent with Thrifty, the USPTO notes that amendments of mark descriptions would only be prohibited in the unusual situation where the amended description differs materially from the mark shown in the drawing (or described in the original description, for non-visual marks where no drawing of the mark is required). Otherwise, amendments would be freely allowed. For example, in cases where an initial description does not address all the elements in the drawing, an applicant could supplement the description to include the elements of the drawing previously omitted from the description without running afoul of the material alteration standard.

83% Chance of Patent Term Extension Due to USPTO Delay

According to Professor Crouch at Patently-O,

[As shown by the histogram], 72% of the issued patents include at least some 154(b) extended patent term. Among those with an extended term, the average extension is 392 days. Slightly over 10% of the issued patents were granted an extension of three months (0.25 years) or less. A cumulative frequency chart of this same data would show that just over 50% of all the issued patents have a term extension lasting more than six months.

. . . Of course, the extension term is correlated with the length of time in prosecution. This scatter plot shows that relationship quite well. . . .

. . . Primary examiners are “quicker” — i.e., that patents examined by a primary examiner issue more quickly and with fewer amendments than those examined by assistant examiners. . . . As may be guessed, issued patents associated with an “assistant examiner” are much more likely to have an extension. (78% of patents with assistant examiner have extension compared with 69% of patents examined only by a primary examiner). It appears that at least some of the quickness is due to the examiner actually acting more quickly (rather than merely compromising more easily).

Similarly, continuations are much less likely to receive extensions than patents without any ancestral history. (78% of patents with no ancestry have extension
compared with only 61% of patents that reference one or more parent). That
result is explained by the PTO’s procedure of reviewing continuation applications on a priority basis. Combining these numbers, I find a recipe for delay: In this study a patent with no ancestry that is examined by an assistant examiner has an 83% chance of received extensions due to PTO delay.

Senate Patent Reform Bill Amendments

The IPO web site now has the text of the 15 possible Senate amendments to S. 1145 that were circulated by the Judiciary Committee on Wednesday, March 13, 2008:

• Deletion of Estoppel
• Amend Best Mode to House Language
• Delete Marking Provision
• Codify Seagate
• Duties of Patent Board Judges
• Interlocutory Appeals
• Interference and Derivation
• Interference Technical Amendment
• Severability
• PGR Estoppel Final Decision
• PGR Correct 337
• Appointments Clause
• PGR Technical
• Reinstating Ex ParteBaldwin

USPTO Publishes Regulatory Flexibility Analysis of Markush Limitation Proposal

In August 2007, the United States Patent and Trademark Office (Office) published a notice proposing to revise the rules of practice pertaining to any claim using alternative language to claim two or more independent and distinct inventions (Alternative Claims Notice of Proposed Rule Making). The Office has now prepared an initial regulatory flexibility analysis (IRFA) on that proposed change to the rules of practice and is requesting public comment.

In particular, the Office is soliciting information on the following:

1. Alternative approaches that would reduce the burden of the rule for small entities while meeting the Office's objectives.
2. The costs of modifying an application that already is under review as needed to comply with the rule: a. The cost of filing one or more divisional applications. b. The cost of correcting a claim that is in an improper format, and factors that might cause this cost to vary.
3. The number of patent applications submitted by unique small entities per year (or per decade).
4. Factors that influence an applicant's decision to file divisional applications.
5. Issues that might affect the combined impact of alternative language that requires intra-claim restriction and is of an improper format.
6. The extent to which applicants will adjust to the new rules over time, such that future initial patent applications containing alternative language will comply with the proposed rule (i.e., the applications will not need to incur the cost of amendments or divisional applications due to alternative language that is of an improper format or requires intra-claim restriction).
7. The benefits of the rule making.
8. Other information related to this Initial Regulatory Flexibility Analysis, including any assumptions or findings stated above.

According to the IFRA,

The Office is proposing to revise the rules of practice pertaining to any claim using alternative language because patent applicants sometimes use Markush or other alternative formats to claim two or more independent and distinct inventions and/or to recite hundreds, if not thousands, of alternative embodiments in one claim. Such claims are confusing, difficult to understand, and frequently border on being unmanageable. Proper search of such complex claims, particularly those using Markush language, often consume a disproportionate amount of Office resources as compared to other types of claims. The prosecution of these complex claims likewise often requires separate examination and patentability determinations for each of the alternatives within the claim, e.g., if the alternatives raise separate prior art, enablement, or utility issues. Furthermore, the variety and frequency of alternatives recited in claims filed in applications pending before the Office, driven in part by trends in emerging technologies, have exacerbated problems with pendency. See Examination of Patent Applications That Include Claims Containing Alternative Language, 72 FR at 44992-97.

. . . The proposed rule could potentially impact applicants in two ways. First, it would require that a claim must be limited to a single invention. Consequently, if a submitted application contains a single claim that defines multiple independent and distinct inventions, then the examiner may apply a restriction requirement. See Examination of Patent Applications That Include Claims Containing Alternative Language, 72 FR at 44995. In this case of an intra-claim restriction, applicants who wish to pursue patent protection for the full scope covered by their initial application would have to file a divisional application for each additional invention defined in that original claim. For example, if a single claim contains three independent and distinct inventions and the Office requires restriction, the applicant could file two divisional applications to prosecute the full scope of the original claims. Alternatively, the applicant could elect not to file any divisional applications, in which case he or she would be limited to the one invention elected in the initial application.

To estimate the costs of one divisional application, the Office is using unit cost data from the American Intellectual Property Law Association (AIPLA) Report of the Economic Survey \2\ and the Office fee schedule for fiscal year 2007. Based on these data, the Office estimates that the cost of filing one divisional application is $10,258 (expressed in present value terms using a 7 percent discount rate). The cost
faced by applicants could be greater than this amount if the applicant files more than one divisional.

. . . Second, the proposed rule allows examiners to require applicants to simplify the presentation of claims with alternative language so that:[[Page 12682]]

1. The number and presentation of alternatives in a single claim are not
   difficult to construe.
2. No alternative is itself defined as a set of further alternatives within the claim.
3. No alternative is encompassed by any other alternative within a list of alternatives unless there is no other practical way to define the invention.
4. All alternatives are substitutable for each other. See Examination of Patent Applications That Include Claims Containing Alternative Language, 72 FR at 44996.

Consequently, if an examiner determines that a claim does not comply with one or more of the format requirements listed above, the applicant can be required to correct the claim. The applicant would provide this correction to the claim by submitting an amendment to the application.

To estimate the cost of amending an application in order to correct the format of the claim(s), the Office is using unit cost data on amendments from the AIPLA Report of the Economic Survey.\3\ Based on the AIPLA data, the Office estimates that the cost of filing one amendment to correct the format of the claim(s) is $4,029 (expressed in present value terms using a 7 percent discount rate). The cost faced by applicants could be less than or greater than this amount, depending on how difficult it is to correct the format of the claim(s).

. . . the Office believes that an applicant would need to file at most approximately seven divisional applications following an examiner's restriction requirement, even if more were needed to seek patent protection for the full scope of the originally claimed inventions.\4\ Therefore, while the cost impact of intra-claim restrictions could be as low as zero for applicants that elect not to maintain scope, it could range as high as the cost of seven divisional applications (present value of approximately $42,000). However, the Office believes these applications are relatively few in number and the impact for most applicants will be far less.

Restricted-Out Claims Not Eligible for Priority in Later CIP Application

In Pfizer v. Teval Pharamcuticals (March 7, 2008), the Federal Circuit held that claims in a CIP application that were identical to the restricted-out claims in the parent application did not receive the benefit of the earlier filing date of the parent application.

According to the opinion by Circuit Judge Dyk,

Pfizer filed a divisional application, which ultimately issued as the ’165 patent, that included the restricted-out composition claims, and a continuation-in-part application (“CIP”), which ultimately issued as the ’068 patent, that included the restricted-out method claims. . . .

We conclude that the protection afforded by section 121 to applications (or patents issued therefrom) filed as a result of a restriction requirement is limited to divisional applications. We note that this interpretation of section 121 is consistent with the PTO’s understanding of section 121. See Ex parte Granados, No. 2002-2030, 2003 WL 25283825, *11 (B.P.A.I. Sept. 26, 2003) (not selected for publication) ("[T]he instant case is a continuation-in-part, not a divisional . . . . It therefore does not fall within the literal terms of [section 121]."); see also MPEP § 804.01 (similarly referring to "divisional" applications). Here, the ’068 patent, though it derived from the application that led to the ’823 patent, was filed as a CIP and not a divisional application. We hold that section 121 does not apply to the ’068 patent and that the ’165 patent may be used to invalidate the ’068 patent. Given our conclusion, we do not consider Teva’s alternative argument that section 121 does not apply because the ’165 patent is not consonant with the restriction requirement made in the parent application.

Because section 121 does not prohibit us from using the ’165 patent as a reference against the ’068 patent, we must next determine whether the claims of the ’068 patent are patentably distinct from the claims of the ’165 patent. . . .

. . . We have also held that a "claim to a method of using a composition is not patentably distinct from an earlier claim to the identical composition in a patent disclosing the identical use." Geneva, 349 F.3d at 1385-86. . . .

We agree that the relevant claims of the two patents are not patentably distinct. The claims at issue of the ‘068 patent merely recite methods of administering a "therapeutically-effective amount" of the compositions found in claim 5 of the ’165 patent. Moreover, the term "therapeutically-effective amount" is found in claim 1 of the ’165 patent and was stipulated by the parties to mean the same thing in both patents. Thus, we agree with the district court that the ’068 patent merely claims a particular use described in the ’165 patent of the claimed compositions of the ’165 patent. [Footnote 9: Pfizer argues that claims 15-17 must be considered separately because these claims are directed to the particular disorders of arthritis, pain, and fever. We find that these recitations do not claim non-obvious subject matter, since claim 5 of the ’165 patent generally claims compounds, which the specification indicates are used to treat "inflammation-related disorders."] The asserted claims of the ’068 are therefore not patentably distinct over the claims of the ’165 patent.

Blocking Nucleic Acid Amendment Tangential to Accused Peptic Equivalent

In University of California v. Dakocytomation (February 28, 2008) an appeal of preliminary relief offered the parties an opportunity to obtain an interlocutory judgment on claim construction. Although the applicant amended the claim to a method of staining chromosomal DNA to recite providing a "blocking nucleic acid," the Federal Circuit held that this amendment was only tangential to the accused peptic nucleic acid equivalent which was not surrendered during prosecution:

According to the opinion by Circuit Judge Lourie,

Here, the patentees identified two main reasons for the narrowing amendment. First, the patentees narrowed the claims in order to "facilitate prosecution." In deciding to limit the claims of the ’841 patent to the blocking method and to pursue other means of disabling in a separate application, the patentees argued that "[b]y separating the different inventions into separate applications, it is believed that prosecution will be facilitated." Such a reason for amending the claim is clearly nonsubstantive and does not help us in our analysis.

Second, and more significantly, however, the patentees did amend the claim in order to distinguish the invention over the prior art. The examiner issued prior art jejections in view of, inter alia, Weissman et al., Sealey et al., and Yunis et al. To overcome those references, the patentees argued that the invention was new and nonobvious because it used the blocking method in connection with in situ hybridization for the detection of unique sequences. In contrast, the Weissman reference involved the use of pure unique sequence probes—or probes from which repetitive sequences have been removed—as opposed to blocking. Both the Sealey and Yunis references, however, disclosed the use of the blocking method, but that method was limited to testing the hybridization of repetitive sequences and did not concern targeting unique sequences, as does the claimed use of blocking nucleic acids.
argued that the invention would not have been obvious in view of the prior art because a person of ordinary skill would not have considered the use of blocking for the detection of unique sequences.

The prosecution history therefore reveals that in narrowing the claim to overcome the prior art rejections, the focus of the patentees’ arguments centered on the method of blocking—not on the particular type of nucleic acid that could be used for blocking. Indeed, the "nucleic acid" limitation was never narrowed during prosecution and was not at issue in the office action rejecting the claims, the Examiner Interview Summary Record, or the patentees’ remarks accompanying the amendment. Moreover, Dako does not dispute that none of the cited references concerned the type of nucleic acid that could perform the blocking, or mentioned the accused equivalent. We thus conclude that appellants have met their burden of showing that the amendment did not surrender the equivalent in question because the narrowing amendment was only tangential to the accused PNA equivalent, i.e., the peptide nucleic acid. Accordingly, the court erred in concluding that appellants are precluded by estoppel from asserting that Dako’s products infringe under the doctrine of equivalents. Whether they do infringe is a question of fact for the trial court to consider on remand.

The Patenting Paradox

"The Patenting Paradox, A game-based approach to improve patent management" by Arnaud GASNIER describes the tendency of many companies, research organizations and universities to patent more and more; but with little value is extracted from patents.

According to the book's publisher,

This behavior is called the “Patenting Paradox”. Why does it exist? What are its effects? How can this paradox be solved? This book addresses these issues. It provides both: models to better understand the complexity of patent management; and tools to help the firm navigate in the competitive environment. Current practices are illustrated with pertinent patent information.

This book also presents the results from a survey among 1,100 patent users, which explains the roots of the paradox in the firm. The book explores new ways to intervene in the firm based on gaming techniques. Games offer a simplified reality to understand complex systems, as well as a risk-free environment to explore new practices.

This book describes a new game on patents and three settings to use it to remedy the paradox and resolve three current concerns: raise awareness, improve collaboration and refine strategy. Experiments have been set up throughout Europe (Holland, France and Austria) among 160 graduates and professionals to show the effectiveness of such interventions. This book advises how firms could use these models, tools and interventions in-house.

Arnaud Gasnier is a patent practitioner with academic affiliation, and European patent attorney with 10 years of international experience in the industry and the research sector. He is also Assistant Professor in the faculty of Technology, Policy and Management at the Delft University, Netherlands, with 10 years of teaching on patents at universities and more recently at the European Patent Academy.