Indianapolis Bar Association: 2009-2010 Year in Review Patent Law and Practice Chuck Schmal Sponsored by the Intellectu

1. Indianapolis Bar Association: 2009-2010 Year in Review Patent Law and PracticeChuck Schmal Sponsored by the Intellectual Property Law Section

2. Overview • Patent Office Procedure • Patent Term Adjustment • Ownership • Inequitable Conduct • Ethics Rules • Other Notable Cases • Note: The following topics are just a small sample of recent cases and procedures. 

3. Patent Office Practice

4. Appeals Rules Continuation & Claims Rules Most Important Change of the Year Bilski

5. Appeals Rules Continuation & Claims Rules Most Important Change of the Year Bilski August 13, 2009- David Kappos- New Director of the USPTO

6. Patent Office Highlights • Change in Attitude • Compact Prosecution • Appeals • Proposed Rules

7. Change in Attitude • Launches a Blog and Increases Town Hall Meetings • Claim and Con Rules Rescinded- October 8, 2009 • Ombudsman Program- April 6, 2010 • PKI Certificates- now can have multiple employees of your firm e-file or access private PAIR on your behalf (even at the same time) • FAQs published.

8. Change in Attitude On the subject of quality, there has been speculation in the IP community that examiners are being encouraged to reject applications because a lower allowance rate equals higher quality. Let's be clear: patent quality does not equal rejection. In some cases this requires us to reject all the claims when no patentable subject matter has been presented. It is our duty to be candid with the applicant and protect the interests of the public. In other cases this means granting broad claims when they present allowable subject matter. In all cases it means engaging with the applicant to get to the real issues efficiently—what we all know as compact prosecution.-- August 2009 email to Examiners

9. Rescinds Continuation and Claims Rules The USPTO should incentivize innovation, develop rules that are responsive to its applicants’ needs and help bring their products and services to market... ...These regulations have been highly unpopular from the outset and were not well received by the applicant community. In taking the actions we are announcing today, we hope to engage the applicant community more effectively on improvements that will help make the USPTO more efficient, responsive, and transparent to the public. --October 08, 2009 Press Release: USPTO Rescinds Controversial Patent Regulations Package Proposed by Previous Administration

10. Ombudsman Pilot Program • Ombudsman- used when unable to resolve application-processing issue through USPTO's existing channels • Example, Examiner and SPE do not address new argument or amendment and not returning phone calls. • Recommended to contact the SPE first. • Has to concern a specific application.

11. Ombudsman Pilot Program • Fill out electronic form at: http://www.uspto.gov/patents/ombudsman.jsp • When you first speak with Ombudsman, will be asked whether or not you want it to be confidential • Confidential- Ombudsman will simply log the complaint (log used to look for trends)

12. Compact Prosecution • Expanded and Revised 1st Action Interview Pilot Program • Accelerated Examination • Revised Examiner Count System

13. 1st Action Interview • Had two versions- Original and Enhanced • Sadly, ended April 1, 2010, but likely implement a similar program in the future. • Expanded to all art units but had differing filing date requirements

14. 1st Action Interview • E-File the request for the 1st Action Interview Program • Restriction- must elect • Examiner Conducts Prior Art Search and Sends a list of prior art citation to the applicant • Afterwards, Applicant has to within 1 month or 30 days: • File a request not to have a 1st Action Interview • Schedule Interview and file proposed amendments

15. 1st Action Interview

16. 1st Action Interview

17. Accelerated Examination • Green Technology- still available until December 10, 2010 • Small Entity- still available until June 30, 2010

18. Accelerated Examination- Green Technology • Green Technology Pilot Program • Introduced just before United Nations Climate Change Conference in Copenhagen, Denmark • 1st 3,000 Green Technology Applications with petition receive accelerated examination

19. Accelerated Examination- Green Technology • Petition Must be filed before Dec. 10, 2010 (12 Month Pilot Program) • What is “Green” technology- application directed to: • environmental quality, • energy conservation, • development of renewable energy resources or greenhouse gas emission reduction • What you get- accelerated examination • Advanced out of turn without all of the requirements of accelerated examination (e.g., ESD, etc.)

20. Accelerated Examination- Small Entity • Program Apparently Extended to June 30, 2010 • Requirements • Small Entity with 2 or more applications • Applications filed before October 1, 2009 • Expressly abandon one of the applications • File a petition for accelerated examination • ($130 fee waived) • What you got- accelerated examination • Advanced out of turn without all of the requirements of accelerated examination (e.g., ESD, etc.)

21. Revised Examiner Count System Old System New System February 18, 2010

22. Proposed Procedural Change- Comment Requested • Deferred Examination (light) • PTO floating “extension” to provisional period through missing parts procedural change • After provisional, non-provisional filing receives notice with 12-month non-extendable deadline • Notice demands search/exam fees, surcharge • Ideally, provides applicant with 24 months to decide whether invention is commercially viable

23. Proposed Rules • Non-provisional filing must • Include “basic” filing fee ($330; $165 small-entity) • Have executed oath/declaration (eventually) • Be without or rescind nonpublication request • Be in condition for publication (37 CFR 1.211(c)) • No “tolling” of 12-month period under Paris Convention

24. Proposed Rules • Asserted Advantages • More publications, i.e. provisionals that would not be filed otherwise, non-provisionals w/o nonpublication requests • Unneeded applications out of system, relieving applicants’ financial, PTO’s workload burdens • Focus applicant resources on commercialization rather than non-provisional filing

25. Proposed Rules • Potential Downsides • No “tolling” of 12-month period under Paris Convention • Can get a longer period by filing a PCT application • Search & Examination Fees are small in comparison to attorney costs

26. Appeals • Controversial Appeals Rules- reopened for comment • Streamlined Noncompliant Appeal Brief Review Process • Claims- how to handle appealed and non-appealed rejections/claims

27. Appeals • Controversial Proposed Appeals Rules- reopened comments • Streamlined Appeal Brief Review Process • Chief Judge of BPAI (or his designee) has now sole responsibility for determining whether appeal briefs comply with regulations, and will complete the • Hopefully, it will reduce the number of non-compliant appeal briefs • Use checklist at: http://www.uspto.gov/ip/boards/bpai/procedures/guidance_noncompliant_briefs.jsp

28. Appeals • Claims Reviewed During Appeal • Proposed rule to treat non-appealed rejected claims considered canceled. • Ex Parte Frye: BPAI’s Standard of Review of Examiners’ Rejections • “the Board reviews the particular finding(s) contested by an appellant anew in light of all the evidence and argument on that issue.” • “[i]f an appellant fails to present arguments on a particular issue – or, more broadly, on a particular rejection – the Board will not, as a general matter, unilaterally review those uncontested aspects of the rejection,” and such unasserted arguments may be deemed to have been waived.

29. Patent Term Adjustment

30. Quick Patent Term Adjustment Refresher • 35 U.S.C. §154(b)(1) Periods • (A) Guarantee of prompt USPTO responses- 14 months for USPTO to send an Office Action or Notice of Allowance (plus various 4 month periods)- Examination Delays • (B) Guarantee of no more than 3-year application pendency- USPTO fails to issue patent 3 years after actual filing date • No Double Counting When Periods Overlap • § 154(b)(2)(A) "[t]o the extent that periods of delay attributable to grounds specified in paragraph (1) overlap, the period of any adjustment granted under this subsection shall not exceed the actual number of days the issuance of the patent was delayed."

31. Wyeth v. Kappos (Fed. Cir. 2009) • Issue: When does the overlap occur? • USPTO • 37 CFR § 1.703(f)- B guarantee period starts at the time of the filing of the application, not 3 years after the filing date. • You only get the greater of the A or B periods USPTO – 3 Years PTA OverlapHere Overlap Here B Delay A Delay A Delay 14 mo. date Issue date Issue fee paid 4 mos. from issue fee payment, patent should issue Filing date Office Action issued 3 year date

32. Wyeth v. Kappos (Fed. Cir. 2009) • Issue: When does the overlap occur? • Wyeth • A & B Overlap only occurs after 3 years from the filing date. (A+B Formula) USPTO – 3 Years PTA 1 Year Overlap Here B Delay A Delay A Delay 14 mo. date 6 years issue date Issue fee paid 4 mos. from issue fee payment, patent should issue Filing date 26 mo. Office Action issued 3 year date

33. Wyeth v. Kappos (Fed. Cir. 2009) • Federal Circuit Agrees with Wyeth • "no 'overlap' happens unless the violations occur at the same time," … "[b]efore the three-year mark, no 'overlap' can transpire between the A delay and the B delay because the B delay has yet to begin or take any effect." However, "[u]nder the PTO’s strained interpretation, B delay can occur anytime after the application is filed," which the Court determined "cannot be reconciled with the language of the statute" (emphasis by panel).

34. Wyeth v. Kappos (Fed. Cir. 2009) • Federal Circuit • A & B overlap only occurs after 3 years from the filing date. (A+B Formula) USPTO – 3 Years PTA 1 Year Overlap Here B Delay A Delay A Delay 14 mo. date 6 years issue date Issue fee paid 4 mos. from issue fee payment, patent should issue Filing date 26 mo. Office Action issued 3 year date

35. Wyeth v. Kappos (Fed. Cir. 2009) • USPTO Response • USPTO will be processing recalculation requests under an interim procedure that is available to a patentee whose patent issues prior to March 2, 2010, and who requests it no later than 180 days after the issue date. • This procedure is available only for alleged errors in calculation that are specifically identified in Wyeth. • Information on requesting a recalculation of patent term is on the USPTO Web site at http://www.uspto.gov/patents/announce/pta_wyeth.pdf.

36. Wyeth v. Kappos (Fed. Cir. 2009) • USPTO Wyeth PTA Form PTO/SB/131

37. Japan Tobacco Petition • USPTO Miscalculating Period B for PCT 371 National Stage Applications • Originally, USPTO considered the B Period filing date= when an international applications fulfilled the requirements of 35 U.S.C. § 371 (e.g., filed signed Oath/Dec.). • BUT, 37 C.F.R. § 1.702(b) states that "the term of an original patent shall be adjusted if the issuance of the patent was delayed due to the failure of the Office to issue a patent within three years after the date on which the application was filed under 35 U.S.C. 111(a) or the national stagecommenced under 35 U.S.C. 371(b) or (f) in an international application.” • Section 371(b) states that subject to § 371(f), "the national stage shall commence with the expiration of the applicable time limit under article 22 (1) or (2), or under article 39 (1)(a) of the [PCT].“ = 30 Month Chapter II Deadline • So the B-Period filing date for 371 national stages should be the 30-Month Chapter II deadline (if filed under 371(b)-- more later)

38. Japan Tobacco Petition • USPTO • USPTO relents- B-delay should be calculated based on the date on which the national stage commenced, not the date on which the requirements of § 371(c) were fulfilled. 3-Year B-Period File Signed Declaration- satisfy 371(c) Chap II Deadline (30 Months)

39. Japan Tobacco Petition • PCT Patent Term Landmines • B-Period Delay Landmine- Early 371 Nationalization • If Nationalize under 371 before 30-month chapter II deadline and satisfy 371(c) requirements (e.g., pay fees, signed Declaration, etc.), you still need to expressly request early processing under 371(f) to get the nationalization date for B-Delay filing date. • If not, B-Delay filing date will be based on the Chapter II (30-month) deadline & not the earlier nationalization date. • Contrast regular utility or bypass CON- B-Period filing date is the actual filing date of the application.

40. Japan Tobacco Petition • B-Delay Period Landmine • Nationalize PCT Application before the Chapter II Deadline • Satisfy 371(c)- file signed declaration, etc. • Expressly request early processing (check the box on form) 3-Year B-Period B-Delay filing date starts before Chapter II Deadline Nationalize Chap II Deadline (30 Months)

41. Japan Tobacco Petition • B-Delay Period Landmine • Nationalize PCT Application before the Chapter II Deadline BUT • Fail to satisfy 371(c) OR • Fail to expressly request early examination 3-Year B-Period B-Delay filing date starts on Chapter II Deadline Nationalize File Signed Declaration- satisfy 371(c) Chap II Deadline (30 Months)

42. Japan Tobacco Petition • B-Delay Period Landmine- COMPARE • Instead file via the bypass CON route BUT • Fail to file signed declaration OR • Fail to expressly request early examination B-Delay filing date starts before Chapter II Deadline 3-Year B-Period Bypass CONFiling Date File Signed Declaration Chap II Deadline (30 Months)

43. Japan Tobacco Petition • PCT Patent Term A-Delay Landmines • A-Delay Date is still based on fulfillment of national requirements under 371(c). • For example, if you do not file a signed declaration when the PCT application is nationalized, you lose A-term until you file the signed declaration. • Contrast to a regular utility or bypass CON- where you do not lose A-term so long as you file the signed declaration within 3-months of Notice to File Missing Parts

44. Japan Tobacco Petition • A-Delay Period Landmine • Nationalize PCT application under 371 • Fail to file signed declaration with nationalization A-Period A-Delay- lose term- until file signed Declaration Lose Term Nationalize File Signed Declaration Chap II Deadline (30 Months)

45. Japan Tobacco Petition • A-Delay Period Landmine- COMPARE • Instead file via the bypass CON route • Fail to file signed declaration when application filed • File signed declaration 1-month after missing parts deadline A-Period 2 Month Deadline For Missing Parts DO NOT LOSE ANY A-TERM! Bypass CONFiling Date Chap II Deadline (30 Months) File Signed Declaration w/ 1-Month EOT + surcharge

46. PCT- 371 Nationalization or Bypass CON? • What is the best way to nationalize a PCT ? • Answer: Bypass CON!!! 371 Nationalization Patent Term PDX Simplicity US Restriction... Bypass CON

47. Assignments and Ownership

48. Stanford v. Roche (Fed. Cir. 2009) • Patented Technology • Method of quantifying HIV virus levels in human blood samples and correlating to the effectiveness of antiretroviral drugs. •  History • One of the named inventors (Holodniy) of the patents at issue signed a Copyright and Patent Agreement ("CPA") upon joining laboratory at Stanford. • Holodniy visited Cetus to learn the technology. • Holodniy signed a Visitor's Confidentiality Agreement ("VCA"). • Research for the technology at Stanford was funded by the National Institutes of Health ("NIH"). • Stanford filed the applications for the patents at issue – the '730, '705 and '041 patents.

49. Stanford v. Roche (Fed. Cir. 2009)

50. Stanford v. Roche (Fed. Cir. 2009) • Procedural History • Stanford sues Roche for patent infringement. • Roche: Stanford lacks standing - Roche owns, has a license for, and/or a shop right on the asserted patents. • District Court • Roche's ownership was barred by California's statute of limitation and the Bayh-Dole Act. • Roche's license claims fail because Stanford never consented to Roche's acquisition of Cetus. • Roche lacked shop right to the patents.