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New Abstract Ideas?

Mon, 09/08/2014 - 17:31

In the recent spate of abstract idea cases, the identified abstract ideas have been concepts that are old and well known such that the court can easily take judicial notice of their antiquity.  The courts particularly point to the long heritage of an idea as evidence of its abstractness.  However, that antiquity-limitation does not appear to be a requirement. Rather, it seems correct to say that a “newly discovered” abstract idea is also an ineligible abstract idea.  My question here then is what importance or relevance should be given in the abstract-idea analysis as to whether or not the central idea is old or new?  Or, is my assumption wrong and abstract ideas (in this context) are only those that are old?

Judge Bryson: Computerized Loyalty-Point Conversion System Not Patent Eligible

Mon, 09/08/2014 - 08:50

Loyalty Conversion Systems v. American Airlines (E.D. Texas 2014) LoyaltyConversion101Decision

Data processing and business method patents continue to fall like dominoes. In this case, Federal Circuit Judge Bryson – sitting by designation in the Eastern District of Texas – has determined on the pleadings that Loyalty’s reward-program patent is ineligible based upon the recent Supreme Court cases of Alice Corporation Pty. Ltd. v. CLS Bank International, 134 S.Ct. 2347 (2014) and Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289 (2012).

Loyalty’s two patents are recently issued but claim priority back to a 2006 filing. U.S. Patent Nos. 8,313,023 (“the ′023 patent”) and 8,511,550 (“the ′550 patent”).  The inventors appear to be corporate lawyer Sean McGhie and patent attorney Brian Buchheit. The litigation is apparently being controlled by ITUS Corp (Robert Berman) although no assignments are listed for the patents in the US Patent Office website.

The basic goal behind the invention is to open-up the buying power of customer reward points. This goal is accomplished by allowing customers to transfer reward-points (and their typical limited buying power) for a more negotiable instrument.  The claims include a number of computers sending, displaying and storing messages back and forth in order to accomplish the aforementioned goal.  However, the patent proposes no advance in computer technology per se, other than perhaps being the first to propose the sending and storing of messages in the particular sequence identified.

Judge Bryson writes:

Notwithstanding the prolixity of the claims, they recite a very simple invention: a computer-driven method and computer program for converting one vendor’s loyalty award credits into loyalty award credits of another vendor. In principle, the invention is thus the equivalent of a currency exchange as applied to loyalty award credits such as airline frequent flyer miles or hotel loyalty award points. The Court concludes that the invention claimed in the ′023 and ′550 patents is not fundamentally different from the kinds of commonplace financial transactions that were the subjects of the Supreme Court’s recent decisions in Bilski v. Kappos, 130 S. Ct. 3218 (2010), and Alice Corporation Pty. Ltd. v. CLS Bank International, 134 S.Ct. 2347 (2014), in which the Court held patent claims invalid for failing to recite patentable subject matter. This case falls squarely within the principles announced in those cases. Accordingly, the Court holds that the asserted claims of the ′023 and ′550 patents are invalid. . . .

In light of Bilski and CLS Bank, the resolution of the section 101 issue in this case is straightforward. At their core, the asserted claims of the two patents in suit are directed to the conversion of loyalty award points of one vendor into loyalty award points of another. That core idea plainly would not be patentable without more, as it is indistinguishable in principle from the simple and familiar financial or business operations that were at issue in Bilski and CLS Bank, as well as similar financial operations at issue in various Federal Circuit decisions in which the claims were held to be invalid under section 101. See Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013) (“system for generating tasks to be performed in an insurance organization”); Bancorp Servs., L.L.C. v. Sun Life Assurance Co., 687 F.3d 1266 (Fed. Cir. 2012) (method for managing a life insurance policy, including generating the policy, calculating fees, and determining the surrender value and investment value of the policy); Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012) (method for processing credit applications); Fort Props., Inc. v. Am. Master Lease LLC, 671 F.3d 1317 (Fed. Cir. 2012) (method for creating a real estate investment instrument adapted for performing tax-deferred exchanges); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) (method for verifying the validity of credit card transactions). If anything, the conversion process at the core of the claims in this case is simpler and more commonplace than some of the methods held unpatentable in the cases cited above.

Regarding the computer technology elements of the claim, Judge Bryson dismissed those as “largely functional in nature” and that the resulting claims “do little more than set forth the general concept of currency exchange, as applied to loyalty awards, and then announce the use of ‘one or more’ computers to obtain various efficiencies in the process of converting one type of loyalty award credits into another.”  In the decision, Judge Bryson stepped through each of the technological limitations of the asserted claims and concluded that none offered the ‘something more’ required by the Supreme Court.

= = = =

Procedurally, this case is important as a dismissal-on-the-pleadings — i.e., quite early in the case.  For defendants – this means a major cost savings.

The standard for this type of dismissal are defined by Rule 12(c) of the Federal Rules of Civil Procedure and  is “designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts.” Great Plains Trust Co v. Morgan Stanley, 313 F.3d 305 (5th Cir. 2002). The approach is akin to summary judgment and considers: “whether, viewed in the light most favorable to the plaintiff, the complaint states a valid claim for relief.”

The dismissal on the pleadings is somewhat workable here because subject matter eligibility is a question of law that is largely based upon an introspective look at the patent document.  Of course some outside reference points are: is it an inventive concept? Further, a case potentially turn on claim construction.  In his opinion, Judge Bryson recognized these complications but noted that the parties “have not pointed to any factual issues that could affect” the eligibility analysis.  Further, Judge Bryson waited to make his decision until after a claim construction hearing to likewise ensure that claim construction would not affect the outcome of the 101 analysis.

= = = =

Claim 1 of the 550 patent is as follows:

  1. A method comprising:

a computer serving a set of one or more Web pages for a loyalty program of an entity to one or more remotely located client machines, wherein the Web pages are able to be rendered within a client-side browser as a graphical user interface on the one or more client machines, wherein upon being rendered within the client-side browser said graphical user interface shows a quantity of nonnegotiable credits, wherein said non-negotiable credits are loyalty points of the loyalty program possessed by a member, wherein upon being rendered within the client-side browser the graphical user interface comprises a conversion option to convert at least a subset of the shown non-negotiable credits into a quantity [of] entity independent funds, wherein said entity independent funds are different loyalty points of a different loyalty program of a commerce partner, wherein said entity independent funds are possessed by the member, wherein an agreement exists between the entity and the commerce partner, wherein the agreement permits members to convert the non-negotiable credits to the entity independent funds in accordance with a fixed credits-to-funds conversion ratio, wherein the agreement specifies that the entity is to compensate the commerce partner in an agreed upon amount of cash or credit for conversions of non-negotiable credits to entity independent funds, wherein said agreed upon amount is a multiple of a quantity of converted non-negotiable credits, wherein the entity independent funds are redeemable per the different loyalty program for commerce partner goods or for commerce partner services, wherein the commerce partner is not said entity, wherein in [the] absence of being converted the non-negotiable credits are not accepted as payment for commerce partner goods or for commerce partner services;

the computer responsive to receiving a message indicating a selection of the conversion option, processing the selection to effectuate changes in the served set of Web pages; and

responsive to the processing, the computer serving one or more Web pages or Web page updates that include the effectuated changes to the one or more remotely located client machines, wherein upon being rendered within the client-side browser the graphical user interface is updated with the effectuated changes, wherein the updated graphical user interface shows a reduced quantity of non-negotiable credits possessed by the member in the loyalty program, said reduced quantity resulting at least in part from the subset of non-negotiable credits being converted into the quantity of entity independent funds in accordance with the fixed credits-to-funds conversion ratio.

Australia: Myriad Gene Patents Look Good

Sun, 09/07/2014 - 12:23

Guest post by Ben McEniery.  McEniery is a Senior Lecturer in Law at the Queensland University of Technology and a Barrister who specialises in Intellectual Property Law matters.

On Friday the Full Court of the Federal Court of Australia in D’Arcy v Myriad Genetics Inc [2014] FCAFC 115 upheld the validity of Myriad Genetics’ Australian BRCA1 gene patent over isolated DNA sequences.

The five judges who constituted the court in a joint judgment unanimously held that isolating a DNA sequence from its surrounding genetic material involves more than simply taking the nucleic acid out of the cell, and instead involves structural and functional changes that create a new composition of matter. The court thus took the view that the patent in question claims something other than subject matter that had previously existed in nature, and as such, the isolated nucleic acid, including cDNA, constitutes patentable subject matter.

The expressly court rejected the conclusion reached last year by the US Supreme Court in AMP v Myriad Genetics that isolated genes and the information they encode are not patent eligible. Instead, it adopted the reasoning of Judges Lourie and Moore in the Federal Circuit below, finding that isolated genes are not naturally-occurring substances but are “the products of man”. At paragraph [212] the court said that:

What is being claimed is not the nucleic acid as it exists in the human body, but the nucleic acid as isolated from the cell. The claimed product is not the same as the naturally occurring product. There are structural differences but, more importantly, there are functional differences because of isolation.

Although the court characterised isolated DNA as material derived from naturally occurring material, it held that this is not a reason for it to be excluded from patentability. In this regard, the court by reference to precedent explained the distinction between a discovery (and an idea in the abstract) and an invention at paragraphs [111] to [113]. The court thus took the view that in determining whether an invention is patentable subject matter, there is no requirement for a consideration of whether a claimed composition of matter is a “product of nature” or whether a microorganism is “markedly different” from something that already exists in nature. The court also noted at paragraph [155] that “the analysis should focus on differences in structure and function effected by the intervention of man and not on the similarities [with what is found in nature]”.

The court, for the purposes of Australian law, sought to delineate patentable and non-patentable subject matter by stating that, “[a] mere discovery is not patentable and an idea is not patentable, but a “manner of manufacture”, as that term has been developed, is.” In doing so, the court rejected any suggested that there is a “product of nature” subject matter exclusion in Australian law.

Unlike the US Supreme Court, the Full Federal Court considered that the correct approach when determining patentable subject matter is to focus on the products of human ingenuity claimed (in this instance being the isolated nucleotide sequences) and not on the information that they contain. In this regard, the court criticised the US Supreme Court noting at paragraph [215] that:

It is difficult to reconcile that Court’s endorsement of the reasoning in Chakrabarty, with its rejection of isolated nucleic acid as eligible for patentability. With respect, the Supreme Court’s emphasis on the similarity of ‘the location and order of the nucleotides’ existing within the nucleic acid in nature before Myriad found them is misplaced. It is the chemical changes in the isolated nucleic acid which are of critical importance, as this is what distinguishes the product as artificial and economically useful.

Unlike in places such as the United States and Canada where subject matter eligibility is defined by reference to enumerated classes of subject matter, the scope of patentable subject matter in Australia is defined by reference to whether an invention is a “manner of manufacture” of the kind envisaged by s 6 of the Statute of Monopolies 1623.

While it is difficult to fault the Full Federal Court’s reasoning, it is unlikely that this will be the final chapter in Myriad’s defense of its Australian patent. Rather, it is likely that the unsuccessful applicant in this instance will appeal to the High Court of Australia, Australia’s final court of appeal, and that that the High Court will give leave (a statutory equivalent to certiorari) to hear the appeal given the importance of the subject matter concerned.

New Section 101 Decisions: Patents Invalid

Thu, 09/04/2014 - 11:51

The Supreme Court’s decisions from Alice and Mayo are beginning to really have their impact. A few examples:

  • Walker Digital v. Google (D. Del. September 2014) (data processing patent invalid under 101 as an abstract idea) (Judge Stark).
  • Genetic Tech v. LabCorp and 23AndMe (D. Del. September 2014) (method of predicting human performance based upon genetic testing invalid under 101 as a law of nature) (report and recommendation from Magistrate Judge to Judge Stark)
  • Ex parte Cote (P.T.A.B. August 2014) (computer method and hardware for ‘phase shifting’ design data invalid under 101)
  • Ex parte Jung (P.T.A.B. August 2014) (diagnostic method associated with epigenetic risk factors invalid under 101).

Some of the claims invalidated are listed below:

Walker:

1. A method for operating a computer system to facilitate an exchange of identities between two anonymous parties, comprising the steps of:
receiving from a first party first data including an identity of said first party;
receiving from said first party at least two first-party rules for releasing said first data including a rule for releasing said identity of said first party;
receiving from a second party a search request comprising at least one search criterion;
receiving from said second party second data including an identity of said second party;
receiving from said second party at least two second-party rules for releasing said second party data including a rule for releasing said identity of said second party;
processing said search request to determine if said first data satisfies said search criterion; and
if said first data satisfies said search criterion, then
exchanging said first and second data, except said identities of said first and second parties, between said first and second parties in accordance with said first-party and second-party rules,
after said exchanging step, upon satisfying said first-party rule for releasing said identity of said first party, transmitting said identity of said first party to said second party, and
after said exchanging step, upon satisfying said second-party rule for releasing said identity of said second party, transmitting said identity of said second party to said first party.

Genetic Tech:

1. A method to predict potential sprinting, strength, or power performance in a human comprising:
a) analyzing a sample obtained from the human for the presence of one or more genetic variations in a-actinin-3 (ACTN3) gene;
b) detecting the presence of two 577R alleles at the loci encoding amino acid number 577 of the a-actinin-3 (ACTN3) protein; and
c) predicting the potential sprinting, strength, or power performance of the human, wherein the presence of two copies of the 577R allele is positively associated with potential sprinting, strength, or power performance.

Cote:

1. A computer-readable storage device including code segments, to be executed by a computer, relating to a lithographic process technology, the computer-readable medium comprising:
a code segment for receiving a plurality of bins, each bin including a plurality of clusters corresponding to layout data, wherein each cluster represents a plurality of shapes in the layout data, the plurality of shapes having a proximity to each other determined by a grow operation; and
a code segment for phase shifting the plurality of clusters independently of one another.

3. A method of using clusters in electronic design automation, the method comprising:
receiving data for a plurality of bins, each bin including a plurality of clusters, each cluster representing a plurality of shapes in an original layout, the plurality of shapes having a proximity to each other determined by a grow operation; and
using a computer, preparing a phase shifting layout for the original layout by phase shifting each of the plurality of clusters independently of one another.

7. An electronic design automation program to be executed by a computer and stored on a non-transient computer-readable medium, the electronic design automation program comprising:
a source code segment designed to receive layout data in a bin and cluster format, wherein at least one bin includes a plurality of clusters, each cluster representing a plurality of shapes in the layout data having a predetermined spatial relationship to each other as determined by a grow operation; and
a source code segment designed to phase shift the plurality of clusters independently of one another.

Jung:

1. A computer-implemented method comprising:
receiving epigenetic information associated with at least one individual;
calculating, using a microprocessor, a risk utilizing the epigenetic information; and
transferring at least a portion of the risk utilizing the epigenetic information.

Federal Circuit Falls in Line: Supporting Strong Limits on Patent Eligibility

Wed, 09/03/2014 - 18:54

By Dennis Crouch

In buySAFE v. Google (Fed. Cir. 2014), the Federal Circuit has found the patentee’s computer-based-transaction patent to be invalid as an abstract idea lacking subject matter eligibility. The decision by Judge Taranto and Joined by Judge Hughes is somewhat unremarkable and the holding falls easily within the framework created by Alice Corp and Mayo.  At the same time, the Federal Circuit offers several nuggets that may provide broader fodder for future eligibility challenges.

In its recent software patent decision of Alice Corp., the Supreme Court identified its underlying policy motivation for denying patent rights to abstract ideas, laws of nature, and natural phenomenon. The high court’s concern is “that patent law not inhibit further discovery by improperly tying up the future use of these building blocks of human ingenuity.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347 (2014), quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289 (2012).

Bright Line Test as a Proxy for the Policy Goals: In Mayo, the Supreme Court explained that the exceptions to patentability (law of nature, abstract idea, product of nature) serve as proxies “for the underlying building-block concern.”  Although admittedly an inexact substitute for the particular policy concern, the named exceptions are “somewhat more easily administered” and also have the benefit of substantial tradition. By using a proxy for its underlying concern, the Supreme Court seems ready to admit that some excluded inventions will not have raised substantial building-block concerns, however, the court concludes that judges simply “are not institutionally well suited to making the kinds of judgments needed to distinguish between” them. Mayo.  Thus, the result is a “bright line” exclusion against abstract ideas, laws of nature, mathematical formulae, and natural phenomenon.

Narrowness of Idea Cannot be Judged: Of particular importance here, although the breadth of an abstract idea is relevant to its impact on future innovation, the court here is clear that the breadth or narrowness is not relevant to the application of the exclusionary rule itself.  Rather, the exclusionary rule applies “even if the particular . . . abstract idea at issue is narrow.”

The Process of Determining Eligibility: The process then for determining subject matter eligibility is: (1) determine whether the patent claim is “directed to subject matter in one of the three excluded categories;” and (2) if so, determine whether “the additional elements” of the claim supply an “inventive concept” that is “significantly more than” the ineligible matter itself.  In explaining this second step, the Federal Circuit expounded that the inventive concept must be “in the physical realm of things and acts – a ‘new and useful application’ of the ineligible matter in the physical realm.” Further, merely requiring a generic computer implementation of an ineligible idea does not move the invention “into section 101 eligibility territory.”

Physicality requirement?: You might query how the Federal Circuit’s physicality requirement comports with Bilski v. Kappos, 561 U.S. 593 (2010) (rejecting the machine-or-transformation test as determinative).  The Federal Circuit actually takes an odd interpretation of Bilski.  The court here suggests that the Supreme Court rule on business method patents is that they are certainly directed to abstract ideas (step 1 above), and that they are only patentable with additional inventive concepts tied to the physical realm.

What is an Abstract Idea?:  Up to now, the courts have avoided providing any solid definition for the abstract idea test.  And here, the Federal Circuit was also able to duck that issue because the particular claims at issue are somewhat parallel to those seen in Bilski and Alice. Namely, the claims focus on arrangement involving contractual relations between parties and involving “a fundamental economic practice long prevalent in our system of commerce.”

In the present case, the patented “transaction performance guarantee” is, according to the court here “beyond question of ancient lineage.” And, the patentee’s addition of the computer and computer program in generic terms were insufficient to meet the eligibility test outlined above.

Invalidity affirmed.

I should note that the court did not discuss the presumption of validity or the standard of evidence applied to the underlying elements of the Alice Corp eligibility test.

= = = =

Claim 1 of US Patent No. 7,644,019:

A method, comprising:

receiving, by at least one computer application program running on a computer of a safe transaction service provider, a request from a first party for obtaining a transaction performance guaranty service with respect to an online commercial transaction following closing of the online commercial transaction;

processing, by at least one computer application program running on the safe transaction service provider computer, the request by underwriting the first party in order to provide the transaction performance guaranty service to the first party,

wherein the computer of the safe transaction service provider offers, via a computer network, the transaction performance guaranty service that binds a transaction performance guaranty to the online commercial transaction involving the first party to guarantee the performance of the first party following closing of the online commercial transaction.

= = = = =

An interesting element of this particular decision is that Judge Rader was originally a member of the panel but lost his vote when he retired in June 2014.  Most certainly Judge Rader’s presence on the panel would have impacted the language used to reach these results.

Guest Post: Knowing what is Known and Knowable

Wed, 09/03/2014 - 10:08

Guest post by Professor Sharon K. Sandeen

For several years now, I have been thinking about how the changes that the America Invents Act (the AIA) wrought to the definition of prior art will change trade secret practice. Specifically, were they intended to narrow the definition of prior art in ways that would make it easier for inventions to be kept as trade secrets and used commercially without triggering the one-year grace period in which to file a patent application?

My initial interest in this topic was sparked by the noticeable deletion of the word “known” from section 102. Former section 102(a) used to state that “[a] person shall be entitled to a patent unless the invention was known or used by others in this country. . . before the invention thereof by the applicant for patent.” Most of the language of “old” section 102(a) is now in “new” section 102(a)(1), but not the word “known.” Also, what is to be made of the added phrase “otherwise available to the public.”

To date, the debate about whether the AIA intended to narrow the definition of prior art in ways that would heighten the ability of inventors to protect their inventions as trade secrets has focused on the meaning of “public use” and whether the phrase “otherwise available to the public” is a new category of prior art or was intended to modify the other listed categories. This makes sense when you consider that the previous “known” category focused on what others knew at the time of the invention, and the issue of whether the grace period is triggered concerns the acts of inventors. Thus, one way to look at the deletion of “known” is to realize that new section 102 simplified things by removing the only type of prior art that applied to “others” but not to the inventor. Now, all the categories of prior art listed in section 102(a)(1) apply to acts of others and inventors, and section 102(b) focuses on the acts of inventors.

I want to suggest another way of looking at the new section 102 and the deletion of the word “known” that helps make sense of both section 102(a) and 102(b). Under well-established trade secret doctrine, the prior art that prevents information from qualifying as a trade secret is expressed as that which is “generally known” and “readily ascertainable.”  What is generally known is broadly defined to include what is known to the general public and what is known within discrete industries or groups of individuals who are experts in the field. Information is readily ascertainable if, even though it is not generally known, it can be found without much time, trouble or expense. Among trade secret scholars, we say that the difference is between what is “known” to the public and what is “knowable.”

Applying the categorizations of “known” and “knowable” to the AIA, it can be seen that new section 102(a) refers to what is knowable. What is stated in a patent or a printed publication or what is in use or on sale, is probably not generally known, but it is readily ascertainable. Read this way, the phrase “otherwise available to the public” makes perfect sense because it captures the essence of the other listed categories and establishes that any information that is ascertainable before the effective filing date would constitute prior art. How readily available the information must be is an question that the AIA does not address directly and that will have to be determined by the courts.

Applying the trade secret concept of “known” to new section 102(b) helps make sense of the language of 102(b)(1)(B) which refers both to “the subject matter that was disclosed” and information that was “publicly disclosed” before such disclosure and, in a round- about way, establishes that section 102(a) does not require information to be generally known by the public. The language “the subject matter that was disclosed” must mean the information that is listed in section 102(a) which only needs to be “knowable.” Information that is “publicly disclosed,” in contrast, means information that was actually disclosed to the public (i.e., “generally known” in trade secret parlance).

Guest Post: The Case Against Federalizing Trade Secrecy

Tue, 09/02/2014 - 17:40

Guest post by Christopher B. Seaman, Assistant Professor of Law at Washington and Lee University School of Law. 

As Dennis recently discussed, the idea of creating a private cause of action for trade secret misappropriation under federal law appears to be gaining traction. Bipartisan legislation has been introduced in both the House and the Senate, and congressional action on these bills may occur as early as this fall. A number of influential actors in the intellectual property world, including the AIPLA, former USPTO Director David Kappos, and a coalition of large manufacturing and technology firms, have publicly supported federalizing trade secrecy. And several legal academics have advocated adoption of a federal trade secrets act.[1]

In a forthcoming article in the Virginia Law Review, I contend there are several important reasons why trade secrecy should remain primarily the province of state law. First, despite claims by proponents, the adoption of a federal civil cause of action would not create greater uniformity for trade secret protection. Currently, there is widespread agreement regarding the basic principles of trade secrecy under state law.   For instance, to establish the existence of a trade secret, both the UTSA (adopted by 47 states) and the Restatement of Torts (largely followed by the remaining jurisdictions) require the trade secret holder to prove that the allege secret has value because it is not generally known or used, and that the holder of the trade secret took sufficient efforts to keep the information secret from others. Similarly, the UTSA and Restatement largely agree on what conduct qualifies as “improper means” of acquiring a trade secret, and both recognize that reverse engineering and independent invention cannot create liability for misappropriation. While there are some variations between states regarding the particular details of trade secret protection, these differences are relatively minor, as the Federal Circuit has recognized.[2]

In fact, adopting federal legislation likely would result in less uniformity by creating two parallel regimes—federal and state—with overlapping authority over trade secret claims. As noted in the recent letter signed by 31 law professors, none of the current bills pending Congress would preempt state law, thus permitting a federal cause of action to exist in parallel with existing state remedies. Notably, there are important differences between the Economic Espionage Act (“EEA”), which would be amended to create a private cause of action, and current state law, such as the EEA’s mens rea (intent) requirements and its lack of express protection for reverse engineering. Moreover because trade secret claims frequently turn on the resolution of related state law issues—such as the scope and enforceability of nondisclosure agreements, or the fiduciary duties of an employee to a current or former employer—courts would either have to borrow from existing state law or create a new body of federal law in these areas to supplement the statutory text.

Second, proponents claim that federal legislation is needed to secure access to a federal forum, which they argue is imperative to adequately protect vital trade secret information. However, a substantial number of trade secret claims are already litigated in federal courts under diversity and/or supplemental jurisdiction, with the number of reported trade secret decisions increasing at least fourfold since the late 1980s.[3] In particular, acts of misappropriation by foreign actors and entities—which feature prominently in proponents’ arguments for federalization—generally would fall within the scope of district courts’ so-called alienage jurisdiction.[4] Others claim that additional federal remedies, like the ex parte seizure provisions in the House and Senate bills, are necessary to prevent irreparable harm after a trade secret has been stolen. However, they fail to explain why existing procedures, such as temporary restraining orders,[5] preliminary injunctions,[6] and civil seizures pursuant to state law under Federal Rule of Civil Procedure 64, are inadequate to protect trade secret holders.

Third, and perhaps most significantly, the proposed federalization of trade secrecy may negatively impact innovation by undermining a key objective of patent law: the disclosure of patentable inventions. Innovators who develop a potentially patentable invention often face the dilemma of whether to incur the cost, delay, and uncertainty of seeking patent protection, or instead maintaining the invention as a trade secret. Stronger trade secret protection via federalization will likely cause more inventors to opt out of the patent system in favor of trade secrecy. This, in turn, will reduce the amount of public disclosure regarding patentable inventions that can be used by others to improve upon the invention and to practice it after the patent’s expiration. In contrast to patenting, trade secret protection is “theoretically unlimited in duration, lasting so long as the information remains a trade secret.”[7]

As an alternative to federalization, my article instead proposes a modest expansion of federal courts’ jurisdiction over state law trade secret claims that could be achieved by tweaking some existing jurisdictional rules. For instance, Congress could adopt a so-called “minimal diversity” standard in trade secret cases that would make a federal forum available whenever at least one party is a citizen of another state from the other parties. Congress also could adopt a “national contacts” standard that would allow a U.S. company to rely on a foreign misappropriator’s contacts with the United States a whole, rather than just the forum state, to establish personal jurisdiction over foreign defendants. This proposal would offer the benefits of a federal forum for more trade secret claims, while at the same time avoiding the potential drawbacks of creating a new federal private cause of action for trade secret misappropriation.

[1] David L. Almeling, Four Reasons to Enact a Federal Trade Secrets Act, 19 Fordham Intell. Prop. Media & Ent. L.J. 769, 770 (2009); Marina Lao, Federalizing Trade Secrets Law in an Information Economy, 59 Ohio St. L.J. 1633, 1653 (1998); Christopher Rebel J. Pace, The Case for a Federal Trade Secrets Act, 8 Harv. J.L. & Tech. 427, 433-34 (1995).

[2] See TianRui Grp. Co. v. U.S. Int’l Trade Comm’n, 661 F.3d 1322, 1327-28 (Fed. Cir. 2011) (noting that “trade secret law varies little from state to state”).

[3] David S. Almeling et al., A Statistical Analysis of Trade Secret Litigation in Federal Court, 45 Gonzaga L. Rev. 291, 293, 302 tbl.1 (2010).

[4] See 28 U.S.C. § 1332(a)(2) (granting the district courts original jurisdiction over civil actions between “citizen of a State and citizens or subjects of a foreign state”).

[5] See, e.g., V’Guara Inc. v. Dec, 925 F. Supp. 2d 1120 (D. Nev. 2013) (granting a TRO to prevent trade secret misappropriation).

[6] See, e.g., Core Labs v. Spectrum Tracer Servs., 532 Fed. Appx. 904 (Fed. Cir. 2013) (granting preliminary injunctive relief for a trade secret misappropriation claim).

[7] Nova Chems., Inc. v. Sekisui Plastics Co., 579 F.3d 319, 327 (3d Cir. 2009).

Patent Grants

Tue, 09/02/2014 - 08:57

 

The chart below shows the number of utility patents issued each quarter with data through August 2014 (2014 Q3 uses an estimate for September 2014).  You will note that the number of patents issuing continues to rise.

The USPTO issues new patents each week on Tuesdays morning.  Of the top-twenty weeks with the most issued patents on record, all twenty occurred so far in 2014 (with one third of the year still remaining). 

Calling Patent Attorneys to Pro Bono

Mon, 09/01/2014 - 02:02

The complexity of patent law and the restrictions on who is permitted to practice have served patent attorneys well — with the resulting generous incomes. The problem though is that these same complexities raise a barrier to entry for many small companies and individual inventors. Over the past few years, the USPTO has improved and formalized its pro bono programs. Get involved. (http://www.uspto.gov/inventors/proseprobono/)

Case dismissed as sanction for misrepresentations

Fri, 08/29/2014 - 17:20

Judge Keith Ellison issued a scathing order dismissing a patent case after it had been tried to verdict.  Tesco Corp. v. Weatherford Int’l., Inc. (S.D. Tex. Aug. 25, 2014).  Four days into a three-week trial over infringement of some patents relating to drilling rig equipment, an inventor testified that a brochure that constituted 102(b) prior art showed his invention.  The following day, a Friday, patentee’s counsel told the court he would spend the weekend getting to the bottom of the facts about it (there was even a dispute over whether the brochure had been produced to the defendants).

Come Monday, the patentee’s lawyer said that the brochure had been rendered by someone else, Karr, not the inventor and that Karr would unequivocally, no doubt, for sure, and so on say that it was not the inventor’s device.  Trial proceeded.  There was a mixed and inconsistent verdict rendered by the jury.  Rather than enter judgment, Judge Ellison let the case proceed to other issues.

After trial during discovery relating to exceptional case and inequitable conduct, Karr testified that he had had nothing to do with the brochure and that everything the patentee’s counsel had said was false.

The defendants, not surprisingly, moved for sanctions.  Making matters worse, in opposition to those motions, the patentee’s counsel quoted portions of the deposition excerpts that, Judge Ellison felt, were at best misleading.

In this order, the judge dismissed the claims with prejudice, holding that nothing less would protect the judicial system.  It then invited motions for attorneys’ fees to be submitted.  Stay tuned.

Recent Patent Transfers

Fri, 08/29/2014 - 13:10
  1. Sandisk transferred a handful of patents and applications to newly formed company known as Sudek Technologies. The patents stem from the work of MusicGremlin – which was bought by Sandisk several years ago. How much would you pay for the following claim with a 2003 priority date?

1. An electronic device comprising:

an interface through which to communicate with a network; a memory; and processor in communication with the interface and the memory,

wherein the processor is operative to:

receive subscription information from a user, wherein the subscription information includes (i) a user-selection of one of a plurality of available subscription lists and (ii) a user-selected frequency at which an updated listing of digital media file titles from the selected subscription list is to be delivered from a server in the network to the electronic device, wherein the server stores a listing of one or more digital media file titles for the selected subscription list, which is updated periodically, wherein the delivery of the updated listing occurs repeatedly over time as the server updates the listing;

provide the subscription information to the server;

after an available connection to the network is detected:

automatically establish a connection to the server, wherein the connection to the server is established invisibly to the user; and

automatically receive an updated listing of digital media file titles from the server if it is time for the updated listing to be delivered, per the user-selected frequency in the subscription information, wherein the user manually selects the subscription list but particular digital media file titles from the subscription list are automatically selected and sent to the user.

  1. Japanese Konica-Minolta has transferred a set of 20+ patents to the Korean company Moneual (maker of a roomba competitor). The patents are all older (latest issued date is 2002) and relate to control systems for a mobile robot.
  2. The patent holding company known as “HOME RUN PATENTS LLC” has transferred all 16 of its patents to Palo Alto Networks. Earlier this year, Palo Alto Networks agreed to pay $175 million to settle a patent case with Juniper.
  3. RPX added a few more patents to its portfolio with a transfer from Hyperchip. The patents relate to fundamental aspects of network operations (such as congestion avoidance).
  4. Codexis just transferred a set of six patents to Pioneer Hi-Bred (DuPont) related to genetically modified plants with “pest resistance.” The patents were originally held by Maxygen and it is possible this transfer is simply a clean-up of a prior sale to DuPont.

What to do About All These Invalid Patents?

Thu, 08/28/2014 - 18:37

By Dennis Crouch

The recorder-of-deeds here in Boone County Missouri is pretty good at her job. Although there is an occasional error in the records, those errors are quickly remedied once found.  The property records are regularly relied upon and their correctness is important to ensure smooth operation of the real property marketplace.

Over the past few years, the Supreme Court has uncovered a few glaring errors in the patent records.  Namely – hundreds of thousands of patent claims have issued that are – in fact – not patentable.  These problematic claims either lack eligible subject matter under the patent common law and 35 U.S.C. § 101; are indefinite under 35 U.S.C. § 112; or are obvious under 35 U.S.C. § 103.  This results is prompted by the recent decisions in Supreme Court cases such as Alice Corp. v.. CLS Bank International, 134 S.Ct. 2347 (2014); Nautilus, Inc. v. Biosig Instruments, Inc., 134 S.Ct. 2120 (2014); Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107 (2013); Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289 (2012); and KSR Intern. Co. v. Teleflex Inc., 550 U.S. 398 (2007).

Prior to these decisions, the USPTO had been issuing patents under more lenient standards. See, e.g. State Street Bank (Fed. Cir. 1998). For its part, the USPTO has quickly modified its approach effectuate the new precedent that offers more stringent tests of patent eligibility and patentability. The result is not necessarily fewer issued patents or a lower grant rate, but instead perhaps a modification (narrowing) of claim scope.

These decisions are all naturally retroactive in that they apply fully to the aforementioned problematic claims found in already issued patents.  However, the general approach thus far has been to leave those patents and their problematic claims on the patent rolls as if nothing had happened unless and until a third-party challenges their validity or the patentee abandons the protection.  Q: Is this a problem? A: Yes.

Next time: A few ideas for moving forward.

Alice Corp. and Patent Claiming: A Simple Example

Thu, 08/28/2014 - 08:57

By Howard Skaist[1]

In the wake of Alice Corp (“Alice”), many practitioners, including myself, are thinking about its implications, in particular, with respect to drafting patent claims. Of note, especially, is the Court’s statement, recited more than once in Alice, that “this Court has long “warn[ed] …. against” interpreting section 101 “in ways that make patent eligibility ‘depend simply on the draftsman’s art.’”  See 573 U.S. ____ (2014); slip opinion at 16. I would like to test that notion and, potentially, its general boundaries with a simple example.

Let’s consider, as an example, the early days of computers and the creation of VisiCalc.  If today’s law applied then, e.g., Alice, would a patent claim covering VisiCalc have been statutory? I would be inclined to say, even today, that it depends a lot on the particular claim, but we also have the Supreme Court’s position on the matter, mentioned above. So, to what extent does the answer depend on the particular claim?

Here is one possible claim to VisiCalc:

  1.  A method comprising:  implementing a spreadsheet on a computer.

One issue worthy of mention here is that cases getting to the Court are ones in which the claims do not appear on their face to appropriately flush out the subject matter considered innovative, at least if we can rely on the opinions without taking the trouble to look at other claims of the particular patents.   However, most skilled practitioners tend to make sure that a spectrum of claims are included, at least for considerations related to section 103.  As shall be seen, this may also be the best practice for addressing 101 issues.

The claim above, thus, is in line with claims previously adjudicated before the Court.  That is, the claim on its face does not appear to communicate details about the innovation itself. Rather, this claim would likely be held non-statutory under the approach in Alice.  Applying the analysis, spreadsheets constitute a way to organize human activity that is of longstanding use.  Thus, it would seem that, following Bilski and Alice, a spreadsheet may potentially be deemed an abstract idea or a fundamental concept.  Thus, it is, if anything, a building block for human ingenuity and, on policy grounds, section 101 exceptions to statutory subject matter are potentially implicated.

Again, then, following the approach in Alice, the aspect of the claim calling out implementation on a computer likewise does not constitute a sufficiently meaningful addition, whether analyzed element by element or as a whole.  It might be argued that computer implementation is faster than performing spreadsheet calculations on paper, but merely being faster is not sufficient, generally, to pass muster here.

It is important to realize, however, that when technology is implemented, rarely does it just result in being faster and nothing more.  Usually, the implementation provides other advantages.  Here, referring to this simple example as an illustration, VisiCalc made a type of functionality possible that had not existed before.  Therefore, if that aspect were particularly claimed, perhaps such a claim would be deemed statutory under the analysis in Alice.

For example, consider the following two claims, recognizing that this example is not intended to illustrate the best claims possible, but is just a simple example to test the Court’s recent pronouncement.

  1.  A method comprising:

generating and displaying a matrix of cells comprising an electronic spreadsheet on a computer, said electronic spreadsheet to implement on said computer one or more user-specified mathematical operations in which one or more operands for said one or more user-specified mathematical operations are to be entered in particular cells of said matrix and results of performing said one or more user-specified mathematical operations on said one or more operands are to be displayed in other particular cells of said matrix; and

displaying on said computer, in said particular cells and in said particular other cells, after said one or more operands are entered, said one or more operands and said results of performing said one or more user-specified mathematical operations on said one or more operands, respectively.

  1. The method of claim 1, wherein said results of performing said one or more user-specified mathematical operations on said one or more operands comprise one or more operands of one or more other user-specified mathematical operations either with or without displaying said one or more operands of said one or more other user-specified mathematical operations in cells of said matrix.

Several arguments are available that one, if not both, of these claims is statutory.  To turn the issue around, we should, perhaps, ask the following:  If we ignore the conventional hardware elements of the claim, is the implementation, as claimed, more than merely conventional?

This question, of course, as framed, clearly is not the same question presented under section 103. Thus, while the Court may be criticized for making considerations under 101 more similar to considerations under 103 than had previously been the case, the analysis is still different.

To be even more explicit, we may ask:  is an innovation being claimed (even if it may in light of prior art later be determined to be an obvious one)? 

Here, the answer is quite arguably, yes!

Most everyone is familiar with the functioning of VisiCalc and Excel.  Certainly, at the time Apple introduced VisiCalc, it was an innovation over what had been done previously with conventional spreadsheets of the time.

Perhaps I am overly optimistic and not everyone will agree that claim 2 at least is statutory.  However, these claims call out an improvement over existing processes involving spreadsheets. See 573 U.S. ____ (2014); slip opinion at 13 (discussing that the claims in Diehr improved on an existing process).  A user is able to link together in a spreadsheet format, complex calculations and display the results in a manner so that any change in “operands” is able to be rippled across the spreadsheet and displayed immediately.  This is an improvement over use of a paper spreadsheet and provides a new functionality that previously did not exist.  I am not arguing that this is necessarily patentable, since that is judged relative to particular prior art, only that it is at least statutory because it is not merely conventional.

If it were generally agreed that the first example is likely non-statutory under the Court’s recent pronouncement and the second example is likely statutory[2], then what does that tell us in terms of claim drafting? One thing it demonstrates is that including limitations directed to innovative aspects of particular implementations may provide a claim drafting safe harbor, so to speak, for this area. Where this is done correctly, it would seem that claims of value to a client should ultimately stand up as statutory.  As was mentioned, most practitioners tend to make sure that a spectrum of claims are included.  This is good practice, now, to address, not just 102 and 103, but also 101.

If we compare the two example claims above, what is the difference?  Why, from a policy perspective should one be statutory and the other not, since they are both directed to what is meant to be the same core subject matter?  It appears that section 101 imposes a statutory requirement of proper form.  That is, from a formal perspective, it is necessary that innovative aspects of the invention, as implemented or intended to be implemented, be on the face of the claim for the claim to be statutory.[3]

Recall that we started with the notion that “this Court has long “warn[ed] …. against” interpreting section 101 “in ways that make patent eligibility ‘depend simply on the draftsman’s art.’”  The ironic twist here seems to be that, if section 101 imposes a statutory requirement of proper form, then the prevailing situation would seem quite the opposite of the Court’s stated view.  That is, that patent eligibility indeed depends on the draftsman’s art and our example appears to confirm as much.

Several points are therefore addressed with this example.

  1. Take care when evaluating inventions for meeting statutory subject matter – rarely are things as simple as they look.
  2. Great care is needed in drafting claims in general but particularly in this area because otherwise there may have been a statutory invention inadvertently left unclaimed.
  3. The policy view that patent-eligibility should not turn on the draftsman’s art is not the full story.

[1] Howard Skaist founded Berkeley Law & Technology Group (BLTG) in 2003 after having been employed as the Director of Patents for Intel Corp.  BLTG has a total of twelve patent lawyers and handles all aspects of intellectual property law practice, including patent law.  Mr. Skaist has also been an adjunct professor at Boalt Hall Law School in Berkeley, CA, at Willamette School of Law in Salem, OR, at Lewis and Clark Law School in Portland, OR, and at Albany Law School.

[2] A separate twist is raised by Sotomayor’s concurrence (also expressly by Judge Mayer recently in I/P Engine v. AOL). Would the second example get over those hurdles?  I would say probably not.  It appears difficult here to argue that the problem solved is technical in nature rather than being directed to organizing human activity.  Thus, three justices would probably say that the second example is also non-statutory.

[3] Of course, one would expect that this would also be true to meet section 103.  However, perhaps a difference is that, for purposes of section 103, dissection is not permitted, at least not yet.  While Alice looks at the claim as a whole as well as the claim elements, it was clear as far back as Flook, that some amount of dissection was permissible.  Alice has made that even clearer, following Mayo, by permitting an element by element analysis.

Federal Circuit: Bingo Gaming Software Improperly Encompasses the “Basic Tools of Scientific and Technological Work”

Wed, 08/27/2014 - 10:41

by Dennis Crouch

Planet Bingo v. VKGS (Fed. Cir. 2014)

In a non-precedential decision earlier this week, the Federal Circuit found Planet Bingo’s patents invalid as lacking eligible subject matter under 35 U.S.C. 101.  The court’s opinion self-identifies as a “straightforward application of the Supreme Court’s recent holding in Alice Corp. v. CLS Bank International.”

The patent claims a computerized method for managing a game of Bingo – yes, the multi-billion dollar industry of Bingo. The basic idea of the invention is that some folks want to play ‘their numbers’ each week.  The computerized system lets individuals pre-select their numbers and also helps the Bingo-hall to track sales, verify winners, and avoid tampering.  VKGS and Planet Bingo compete in the marketplace for bingo equipment.

Claim 1 of U.S. Patent No. 6,398,646 recites typical computer hardware including a computer with a CPU, memory device, a printer, input and output terminal, and also a computer program with particular features.  As is typical with software related inventions, the only novel features of the invention stem from software-related functionality. Here, the program is configured to allow input and storage of the pre-selected Bingo numbers in files associated with the players. A player with stored numbers can then retrieve them to play Bingo. At that point, a control number is also associated with the numbers that can later be used to verify winnings.  The patents also include method claims that basically step through the program steps outlined above.

Although I am no Bingo expert, nothing here appears amazingly inventive. Of course, the challenge to the patent is not on grounds of obviousness or anticipation. Rather, the challenge is on subject matter eligiblity grounds – that the patent unduly encompasses an “abstract idea” and therefore unduly limits “the basic tools of scientific and technological work.”

The Patent Act is broadly written so as to allow the patenting of “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. 101.  In addition to the text of the statute, the Supreme Court has further restricted the patenting of “laws of nature, natural phenomena, and abstract ideas.”  According to the court, these exceptions to patentability are necessary to protect “the basic tools of scientific and technological work.”  In Alice Corp, the Supreme Court explained:

“[M]onopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it,” thereby thwarting the primary object of the patent laws. Mayo. We have “repeatedly emphasized this . . . concern that patent law not inhibit further discovery by improperly tying up the future use of ” these building blocks of human ingenuity. Mayo (citing Morse).

Here, the Federal Court found that – yes – those building blocks of scientific inquiry are being inhibited by Planet Bingo’s bingo software patent.  To reach this result, the court began by recognizing that the method and system claims are basically the same and thus should rise-and-fall with the same analysis.  The court then analyzed the case through the lens of the method claims as ineligiblity tends to be easier to show for method claims.

Following the process outlined in Alice Corp., the Federal Circuit first identified the abstract idea as the steps of selecting, storing, and retrieving the bingo numbers, assigning the control number, and checking to see whether the set of numbers is a winner. These steps are collectively an abstract because they are “mental steps which can be carried out by a human using pen and paper.”  Particularly, none of these steps require new technology but rather may be “carried out in existing computers long in use.” (quoting Benson).  Further, the Federal Circuit was unable to find an “inventive concept” in the rest of the claimed subject matter sufficient to transform these abstract ideas into a patent eligible invention. The court writes:

Apart from managing a game of bingo, the claims at issue also require “a computer with a central processing unit,” “a memory,” “an input and output terminal,” “a printer,” in some cases “a video screen,” and “a program
. . . enabling” the steps of managing a game of bingo. These elements, in turn, select, store, and retrieve two sets of numbers, assign a player identifier and a control number, and then
compare a winning set of bingo numbers with a selected set of bingo numbers.

Here, however, the claims recite merely a generic computer and instructions that simply implement the abstract idea discussed above.

Patent Invalid.

Ready to Nationalize Trade Secret Law?

Wed, 08/27/2014 - 08:30

By Dennis Crouch

On the Congressional tees this fall sit a pair of trade secret reform bills with the joint purpose of creating a private cause of action at the federal level for trade secret misappropriation.

  • The Defend Trade Secrets Act of 2014 and
  • The Trade Secrets Protection Act of 2014

Unlike other major branches of intellectual property law, US trade secret rights are predominantly state-based. Thus, my trade secret rights here in Columbia, Missouri depend upon the trade secret law enacted by the Missouri legislature.  Thus, a cause of action for trade secret misappropriation within the state of Missouri would also be brought in a Missouri state court. To be clear, there is substantial uniformity amongst the states based upon the popularity of the Uniform Trade Secret Act (the law in Missouri) as well as cross-pollination of common law principles.

At the national level, we currently have the Economic Espionage Act of 1996 (EEA) that criminalized trade secret misappropriation (as well as conspiracy) that was either (1) done with knowledge or intent to benefit a foreign power (18 U.S.C. § 1831) or (2) related to interstate or international commerce and done with knowledge or intent to harm the trade secret owner. (18 U.S.C. § 1832).

To be clear, the current federal law is a criminal law and, as such, action may only be taken by the federal government (acting through the department of justice).

The proposed modification would largely reboot trade secret enforcement practice with the following addition to the EEA:

An owner of a trade secret may bring a civil action under this subsection if the person is aggrieved by a misappropriation of a trade secret that is related to a product or service used in, or intended for use in, interstate or foreign commerce.

The result of this addition is that essentially every trade secret misappropriation action will be enforceable by the injured party under federal trade secret law.

The proposals do not appear to create any preemption – thus, the federal causes of action would parallel the state-rights in much the same way as trademark and unfair competition laws.

In his testimony before Congress on the issue, Doug Norman explained that the variety of state laws overly confusing for multi-national powers such as his employer Eli Lilly.  David Kappos has also called for the nationalized trade secret enforcement – noting that “the lack of [federal] protection has led to a host of problems that threaten U.S. companies’ competitiveness at home and abroad.

A group of 31 law professors (who teach trade secret law) led by Professors Sharon Sandeen (Hamline) and David Levine (Elon) have countered with a letter explaining that adding this additional layer of potential civil action would be harmful to the balance inherent in the current state-based system. They write:

This deep body of state law creates its own benefits; as the general principles of US trade secret law are well-established and substantially uniform, there is a high level of predictability by and for US businesses and their attorneys. But because the Acts cannot entirely preempt state trade secret law … they will result in confusion, as well as less uniformity and predictability. As a result, the business community will suffer from decreased predictability in the law with … no corresponding benefits.

To be clear, the professors are not against trade secret protection, but instead recognize that the proposal will unsettle the law and may lead to overzealous protection in federal courts.

Further, the professors do not appear to be strongly against nationalized trade secret protection. And, that solution may well be a positive approach. In his essay on the topic earlier this year, David Almeling saw this progression as following a natural order:

Trade secrets are the only major type of intellectual property (i.e., copyrights, patents, trademarks, and trade secrets) not governed primarily by a federal statute. Copyrights and patents got theirs in the 1700s. Trademark got its in the 1800s. Now that we’re firmly in the information age, it’s time for trade secrets to join their peers.

So, the particular major issues here with the proposed law is that it is entirely lacking in details – what is meant in the Bill by the key terms “trade secret” and “misappropriation.”   The lack of details are problematic when coupled with the Supremacy Clause of the US Constitution.  Most trade-secret cases are linked to other state-law issues such as employment and contract law.  The new nationalized trade secret law would reign supreme over these other areas that have up-to-now been given equal weight.

Federal Circuit Reminds Courts of Discretion on Fee Awards

Tue, 08/26/2014 - 12:22

By Jason Rantanen

Icon Health & Fitness, Inc. v. Octane Fitness, LLC (Fed. Cir. 2014) (nonprecedential) Octane Fitness Remand
Panel: Newman, Mayer, and Lourie

In Octane Fitness v. Icon the Supreme Court rejected the “objectively baseless” legal standard that the Federal Circuit had been applying in exceptional case determinations.  Procedurally, the appeal was of the district court’s ruling that this case was not exceptional under 35 U.S.C. § 285, which the Federal Circuit had affirmed under its then-authoritative standard.  Following remand by the Supreme Court, the Federal Circuit has itself now remanded the case back to the district court for further proceedings consistent with the new legal standard.

Most of the nonprecedential opinion involves a straightforward recitation of portions of the Court’s holding:

The Supreme Court abrogated both the clear and convincing evidence standard and the two-part test for objective baselessness and subjective bad faith of Brooks Furniture. Octane, 134 S. Ct. at 1757–58. The Court held that within the context of § 285 “an ‘exceptional’ case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.” Id. at 1756. The Court further concluded that “[d]istrict courts may determine whether a case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the totality of the circumstances.” Id. The Court explained that there is no precise rule or formula for making those determinations and noted that district courts should exercise “equitable discretion” in considering a nonexclusive list of factors that could include “‘frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.’” Id. at 1756 n.6 (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994)). The Supreme Court also observed that “a case presenting either subjective bad faith or exceptionally meritless claims may sufficiently set itself apart from mine-run cases to warrant a fee award.” Id. at 1757.

Slip Op. at 5-6. However, the Federal Circuit also took the opportunity to remind district court judges that the inquiry does not end with the exceptional case determination.  Specifically, under earlier Federal Circuit precedent, the court held that district courts can continue to apply their discretion even after a case is determined to be exceptional:

The Supreme Court’s decision in Octane did not, however, revoke the discretion of a district court to deny fee awards even in exceptional cases. Long before Brooks Furniture, we held that “an exceptional case does not require in all circumstances the award of attorney fees.” S.C. Johnson & Son, Inc. v. Carter-Wallace, Inc., 781 F.2d 198, 201 (Fed. Cir. 1986); see also Gardco Mfg., Inc. v.
Herst Lighting Co., 820 F.2d 1209, 1215 (Fed. Cir. 1987) (“After the district court determines that a case is exceptional, there remains in every case its freedom to exercise its discretion informed by the court’s familiarity with the matter in the litigation and the interest of justice.” (internal quotations omitted)). Indeed, in the companion case Highmark, the Court held that “[b]ecause § 285 commits
the determination whether a case is ‘exceptional’ to the discretion of the district court, that decision is to be reviewed on appeal for abuse of discretion” and that
district courts should have discretion in “all aspects of [the] § 285 determination.” Highmark, 134 S. Ct. at 1748–49.

Slip Op. at 6.  The court goes on to remand the whole mess back to the district court to apply its discretion under the new standard (and presumably, to also apply its discretion to the award of fees).

What I find particularly fascinating about this whole area of law is that there is a substantial line of intertwined Section 284 and 285 cases that deal with the district court’s discretion on fee awards after a finding of willful infringement or that a case is exceptional.  These cases (which often involve an analysis under the factors set out in Read Corp. v. Portec, Inc., 970 F.2d 816, 826–27 (Fed.Cir.1992) are essentially a totality of the circumstances analysis.  This produces two interesting results.  First, although I haven’t fully thought through whether two issues are sufficiently parallel, it seems that there’s a relevant body of law on totality of the circumstances analyses in this context that already exists that courts will be able to draw upon when applying the Court’s new standard for exceptional case determinations.  Second, how should the analysis play out if both the exceptional case determination and the decision to award fees (and how much those fees should be) involve essentially the same totality of the circumstances inquiry?  Does it make sense to retain a formal distinction between the exceptional case determination and the amount of the fee award?  My sense is that the answer is yes, particularly since there will inevitably be factors in the amount-of-fee determination that are not relevant in the is-the-case-exceptional determination (for example, I have seen a district judge apportion fees based on what happened with which patents, with fees being granted for attorney activity in connection with one patent but not when the activity was solely related to other patents involved in the litigation).

Guest Post by Prof. Risch: A Generation of Patent Litigation: Outcomes and Patent Quality

Tue, 08/26/2014 - 10:08

By Michael Risch, Professor of Law, Villanova University School of Law.

Full article available here.

Almost three years ago, I guest posted here about Patent Troll Myths, my study of the ten most litigious NPEs at that time. One of my great regrets in that study was that I did not have a control set—a randomly matched sample to compare against the studied NPEs. Thus, in that paper, I tried to compare with other people’s outcome data. In the years since much has happened. First, most of the cases I studied came to resolution. Second, I collected data on nonNPE litigation to compare with my NPE litigation. I gathered data on 1313 cases distributed over a 25 year period in roughly the same proportion as the 917 cases filed by NPEs over that time. The numbers grow substantially starting in 2004. This led to 792 nonNPE patents versus 352 NPE patents, which indicates that the NPEs asserted the same patents in more cases.

The result is my new paper, A Generation of Patent Litigation: Outcomes and Patent Quality, which is forthcoming in San Diego Law Review. This is the first of at least two papers; the next one will focus on innovation and markets. The paper is full of comparative data about number of defendants, number of patents, choice of districts, complexity of litigation, etc. I don’t have enough room here to describe all of it, so I want to point out some of the key takeaways.

First, the data confirms the conventional wisdom: that NPEs prefer to settle earlier. There were more settlements among NPEs, many fewer trials, and durations were shorter even when holding things that lengthen cases constant, like appeals, merits rulings, and stays. There was one effect that bears further mention, though: NPEs filed more cases that were transferred or consolidated, and transfer/consolidation tended to lengthen cases.

Even this, however, was not enough to make NPE cases longer. First, NPE transferred cases were shorter than nonNPE transferred cases (some might argue because NPEs dropped many cases if they were transferred, but the data doesn’t show that either way). Second, NPE cases were so much shorter that the average NPE case – including all those that were transferred or consolidated—was only 20 days longer than the average nonNPE case – excluding transferred cases. Once the transferred cases were added back to the nonNPE total, the average difference grew much longer. Full regressions are presented in the paper.

Second, when adjudicated on the merits, NPE patents were invalidated about 3 times as often as nonNPE patents. However, this was only about 12% of all the patents asserted by NPEs. Furthermore, this 12% was invalidated in less than 3% of the cases. For nonNPEs, it was about 4% of the patents in about 1.8% of the cases.

Percentage of cases adjudicated on invalidity merits, NonNPE v. NPE

That is, of the patents asserted by NPEs, 88% were never tested on the merits, and 97% of the cases did not involve a patent invalidation. Most studies only report invalidity rates once a patent is adjudicated (and it’s bad for NPEs, like 91% of adjudicated patents because patents are only validated after trial, and NPEs never go to trial). This study asks what about the other 97% that are never adjudicated? I suspect the answer will vary depending on who you talk to, though I give some clues based on procedural dismissals, etc. The full paper includes reexamination results as well. Interestingly, reexaminationrs were only lightly correlated with litigation results.

Third, because I had data about all of the cases involving each of the patents, as well as the outcomes in each of those cases, I was in a unique position to test something I don’t think anyone else has been able to test: what causes a patent to by invalidated? The problem with just focusing on those patents that are adjudicated is that you lose most of the data in the set – data about the very same patents asserted by the same parties against potentially similar parties. The question is why does a patent eventually get invalidated?

It turns out that there is nothing on the face of the patent that will tell you. All of the traditional patent metrics, like future citations, number of claims, continuations, etc. are not statistically significant. (It turns out that this is true even if you look at adjudicated patents). Instead, aside from unobserved features of the patent (perhaps it’s “true” quality) and technology (which will be addressed in a later paper), the factors that most correlate with invalidation in court are those that relate to whether the defendant is more likely to challenge the patent in the first place. Thus, the number of defendants, number of times the patent has been asserted, the number of reexaminations (but, interestingly, not the results of the reexaminations), etc., are most predictive of invalidation. Now, to be sure, the NPEs in the study were more likely to do these things, but once the regression corrected for these choices and other selection variables, the NPE dummy variable added zero explanatory power in the model. Invalidation was a function of suing too often, suing the wrong parties, suing too many parties, or suing on too many patents at once, regardless of NPE status.

There was one further surprising result in all of this. Backward citations, or the number of other references cited in the patent, had a significant effect on invalidity. But the sign was wrong! The more citations, the more likely a patent is invalid. This is contrary to the conventional wisdom that “gold plating” with more references can help the patent. My interpretation is that more references means that the patent was one more likely to be asserted in a high impact way (thus, reexamined, etc.), and that backward citations is merely another variable that identifies likelihood of a challenge. I do not think it is about crowded art, because forward citations do not have the same result, which you would expect in a crowded art.

That’s all I can write in a guest post, but there is much more in the paper, including examination of infringement, reexamination outcomes (and their correlation to litigation outcomes), choice of district over time, etc. This is prepublication, so comments appreciated.

Giving Effect to the Order of Steps in a Method Claim

Mon, 08/25/2014 - 16:31

Mformation Tech v. Research-in-Motion (Fed. Cir. 2014)

Although several important patent litigation procedure issues are embedded here, the most important legal outcome of this case is the Court’s construction of the method claim to require a particular stepwise order – even though the order is not express in the claim itself.

Mformation’s Patent No. 6,970,917 claims a client-server method for managing a wireless device’s mailbox. The steps include:

transmitting registration information relating to the wireless device from the wireless device to the server;

verifying the registration information at the server; and

without a request from the wireless device, performing the steps of:

establishing a mailbox for the wireless device at the server,

placing a command for the wireless device in the mailbox at the server,

delivering the command from the mailbox at the server to the wireless device by establishing a connection between the wireless device and the server, transmitting the contents of the mailbox from the server to the wireless device, and accepting the contents of the mailbox at the wireless device, and

executing the command at the wireless device;

wherein the connection is established based on a threshold condition.

After for years of litigation, the jury found that BlackBerry infringes ($200 million verdict), but the federal district court rejected the people’s verdict on motion for JMOL.

The basic question at issue is claim construction – and whether the step of “establishing a connection between the wireless device and the server” must occur prior to the step of “transmitting the contents of the mailbox from the server to the wireless device.”  Apparently, in the blackberry device, a connection to the mobile device is established contemporaneously with the transmission of contents.

In finding a required order of operations, the Federal Circuit writes:

We agree … that claim 1 requires that a connection be established before transmission. We are persuaded … that the separate sub-step for establishing a connection would become “superfluous” if we concluded that a connection did not have to be established (completed) before transmission. That is because, under such construction of the claim, establishing a connection is necessarily encompassed in transmitting a command.

Further, we note that other sub-steps in claim 1 inherently require an order-of-steps. . . . And while it is true that “we have expressly rejected the contention that if a patent describes only a single embodiment, the claims of the patent must be construed as being limited to that embodiment,” Phillips v. AWH, we do note that our conclusion is consistent with the sole embodiment in the specification.

Thus, the basic idea here is not that the listing of steps in a particular order necessarily means that the claims require that particular order.  What is implicit here, however, is that the listing order is important and will be given limiting effect when additional factors corroborate that result.

= = = = =

An odd element of the case is that the district court’s JMOL determination (rejecting the jury verdict) was based upon its post-verdict “clarification” of the claim construction. There is some prior precedent barring district courts from altering claim construction post-verdict. Thus, here it was important that the Federal Circuit found that the claim meaning had only been “clarified” rather than substantively modified.

During the trial, the patentee’s infringement testimony and evidence relied upon the original claim construction that did not expressly require the stepwise ordering. Thus, it is not surprising that evidence presented fails to prove infringement under the new construction.  What is surprising, however, is that the Federal Circuit did not order a new trial based upon the modification.

Guest Post: Publishing Design Patent Applications: Time to Act

Sun, 08/24/2014 - 14:15

Gary L. Griswold

Mr. Griswold is a Consultant residing in Hudson, WI and was formerly President and Chief Intellectual Property Counsel for 3M Innovative Properties Company. The essay reflects the views of the author. He wishes to thank Bob Armitage and Mike Kirk for their excellent contributions to the essay.

Overview

Design patenting has come of age. According to a recent World Intellectual Property Organization (WIPO) study, the filing of design patent applications more than doubled between 2004 and 2011.[1] The stakes in design patent litigation today can be enormous. One commentator on the recent Apple-Samsung iPhone IP wars noted, “After operating in the intellectual property backwaters for years, design patents took center stage in the epic battle.”[2]

Enterprises of all sizes have come to recognize the value to be had from securing patents on their innovative designs. This also means that more businesses now need to consider whether design patents of others might impair their freedom to operate when placing a new product on the market.

Unlike conventional (“utility”) patent applications, design patent applications are not subject to the “publication” provisions that were placed in the U.S. patent law in 1999 with the enactment of the American Inventors Protection Act (AIPA). Utility patent applications, with a few exceptions, must all be published and made publicly available within 18 months after filing.[3]   However, all design patent applications are required to be kept in secret in the United States Patent and Trademark Office (USPTO) until the patent issues on the application.

Today this secrecy can have significant and negative consequences – for the design’s creator and for those who commit resources to manufacture a similar product before the issuance of the design patent. Unlike most utility patents today, the first inkling that a patent is being sought on a new product’s design may come with grant of a design patent, in other words come at the end of the examination process in the USPTO.

The growing importance of design patents suggests that this exclusion from publication with respect to design patent application publication should be rectified by Congress. This can best be done by requiring that all pending design patent applications be made available to the public by publishing these applications at 6 months after the date that they were originally filed.

Doing so would put the public on notice, shortly after the design patent application is filed, that a new product’s design may be protected. The growing prominence of design patenting, as well as other developments in the law since 1999, now make it timely for Congress to act.

Background

Two major pieces of patent legislation over the past 15 years have worked to make the U.S. patent law operate with vastly greater transparency, predictability and simplicity. The AIPA, with its requirement that most new non-design patent filings must be published at 18-months after their original filing dates was followed by a host of even more significant patent reforms. These were contained in the Leahy-Smith America Invents Act (AIA) of 2011.[4]

Key provisions of the AIA were designed to allow inventors to accurately assess whether they could secure – or had secured – a valid patent. For utility patents, access to earlier-filed patent applications comes though the AIPA’s publication provisions. Clearly, since some patents can take years to issue, holding earlier-filed patent applications in secrecy in the United States Patent and Trademark Office (USPTO) until a patent issued meant that an inventor might mistakenly invest based on the apparent validity of a patent that might then evaporate upon the issuance of a patent on a never-published, earlier-filed patent application.

The AIA also sought to assure that members of the public could more effectively participate in the patenting process. It allowed members of the public to be involved in the determination of whether a claimed invention in a patent application can be validly issued as a patent, both before the patent issues and after the patent issuance.

If action is taken promptly after a pending patent application is published, the AIA permits a member of the public to make a “pre-grant submission” of relevant prior art that the patent examiner handling the patent application must consider in deciding whether a patent should issue on the application.[5] These submissions, most notably include the earlier-sought patent applications of other inventors that have been published under the AIPA’s provisions.

In addition, the new “post-grant review” or “PGR” provisions of the AIA permit a member of the public to raise in a USPTO proceeding any issue of a patent’s validity that could be raised in court by someone accused of infringing the patent. However, these PGR provisions, like the pre-grant submission provisions, require that an individual act promptly. In this case, the PGR petition must be filed within nine months of the issue date of the patent that is being opposed.

Given the formidable requirements for requesting a PGR, most individuals making a PGR request will benefit from advance notice that a patent is about to issue. This notice, of course, is automatic when the patent application has been published under the AIPA’s provisions.

The manner in which the AIA built upon the AIPA’s provisions, both with pre-grant submissions and with post-grant review, work to benefit patent owners and their potential competitors alike. However, while these new pre-grant and post-grant provisions technically apply both to design and utility patents, the lack of any “publication provision” for design patents means that these provisions are now significantly less effective for designs.

The Rationale for Excluding Design Patents from the AIPA Publication Provisions No Longer Makes Sense

When the AIPA was enacted, there were two significant exceptions to the rule that pending applications for patent would be published and made publicly accessible. First, these provisions allowed inventors seeking only U.S. patents to opt-out of the publication requirement. This was done for inventors interested in patent protection only for the U.S. market on the assumption that at least some of them might not want their inventions publicly disclosed if they were ultimately not going to be able to receive a valid patent. However, for almost all such inventions, marketing the invention necessarily discloses to the public what the invention is and, in fact, discloses much more about the invention to the public than would normally be found in an inventor’s patent application if published.

Thus, this rationale, particularly today, makes little sense. The inventor can be “protected” from public disclosure by opting-out of the publication provisions of the AIPA only in the situation where the invention is never commercialized and essentially has no economic value, or in the limited situations where the invention can be effectively practiced as a trade secret. Consequently, it is a protection that seldom affords any economic value to the inventor.

Under the AIA, the publication of an invention in a pending patent application provides an inventor with a guarantee that no one else will be able to successfully secure a patent on the same or a similar invention based on an application filed after the inventor’s patent filing. Where someone subsequently files for a patent, the earlier-filed application limits the later-filing inventor to validly patenting only subject matter both novel and non-obvious over what was disclosed in the earlier-filed application.

Design patents were totally excluded from the 18-month publication provisions. The rationale for the design patent exclusion can be found in the legislative history of the AIPA: “Since design applications do not disclose technology, inventors do not have a particular interest in having them published.” That statement, whatever its validity then, was made before design patenting came of age and has little relevance today, as evidenced by the litigation between Apple and Samsung.

Another reason given for the design exception was that “The Hague Agreement Concerning the International Registration of Industrial Designs” was being revised and that any change to the design patent law should await the outcome of that exercise. That outcome is now clear; Congress has acted to remove the exception for design patents filed under The Hague Agreement.[6]

Yet another reason that design patents may have been left out of the mix when the publication provisions of the AIPA were being drafted was the short pendency of a design patent application. “Pendency” is the time taken by a patent examiner between filing and issuance of the design patent. With pre-grant submissions of prior art and post-grant review under the AIA now in place, that relatively shorter pendency before the Patent Office for design applications versus utility applications makes it much more important to have design applications not only published, but published quite promptly, i.e., at six months from the patent filing.[7]

The last reason Congress may have excepted design patents from publication is that some manufacturers may not have wanted the designs for new products to be prematurely disclosed, prior to market introduction.[8] Under the AIA, however, the filing of a design patent application assures that no similar designs can be patented based upon a later-filed design patent application. In addition, early publication puts competitors on notice that there is a “patent pending” on the design so that they dare not copy the design without the risk of infringing a subsequently issued design patent. Instead of a problem for manufacturers, pre-grant publication carries with it undeniably important benefits.

In addition to the “notice” function that arises from publishing a design patent application, inventors whose design patent applications publish secure yet another benefit under the AIPA. They can qualify for “provisional rights” – that is the right to collect reasonable royalty damages from anyone who uses the design during the period from the date the user received notice of the published design application until issuance of the patent on the design.[9] This again reflects the upsides of publication, much potential gain with a negligible prospect of incurring any pain.

Conclusions

The AIA increased the openness and transparency of the patent system by providing for pre-grant submissions and post- grant review. These provisions work to protect the public against patents that lack valid claims – and similarly protect the inventor from making investments in reliance on patents that could never be successfully enforced. Those aspects of the AIA are premised in part on the publication of pending patent applications.   Whatever reasons can be cited for excluding design patent applications from these important provisions of the AIPA, such reasons now have only historic significance. Today, all design patent inventors deserve equal treatment. The availability of the benefits of publishing pending design patent applications should not depend on where a design patent inventor seeks patent protection.

In sum, the agreement to allow publication of design patent applications filed by U.S. inventors under The Hague Agreement represents a significant step by the United States toward achieving the open, transparent 21st century patent system contemplated by the AIPA and AIA. The increase in design patent application activity – and the prominence of design patent enforcement efforts – renders this a perfect time to remove the exclusion from publication of those design patent applications filed only in the United States.

 

[1] According to WIPO, in 2012, “the 1.22 million industrial designs contained in applications grew by 17%—the highest growth on record.” http://www.wipo.int/export/sites/www/freepublications/en/statistics/943/wipo_pub_943_2013.pdf, at p. 4.

[2] See http://designpatentattorney.com/wp-content/uploads/2013/01/Carani-Lanslide-Article-Design-Patents-Take-Center-Stage-Jan-Feb-2013.pdf.

[3] Most utility patent applications must be published under the AIPA’s publication provisions. The time period set for publishing utility patents is 18 months after the initial patent filing date. 35 U.S.C. § 122(b).

[4] The United States adopted a so-called first-inventor-to-file system as the principle for determining what subject matter can represent “prior art” to a claimed invention. Also, a number of subjective and non-transparent aspects of the rules on patenting were removed.

[5] Because prior art can be submitted to the USPTO anonymously, members of the public and competitors of the applicant are normally comfortable in making such submissions. Since the processing time is shorter for design patent applications than that of utility patent applications, a narrower time window (e.g., before the earlier of a notice of allowance and the later of (1) the first rejection or (2) 2 months after publication) would be necessary for submitting third party submissions.

[6] The implementing legislation for the Geneva Act of The Hague Agreement has been enacted by the United States and rules for its implementation are being finalized by the USPTO. Once the rules are completed, the formal process for membership will be initiated and completed. The Common Regulations Under the 1999 [Geneva] Act and the 1960 Act of The Hague Agreement provide for publication of international applications six months after the date of the international Registration (which occurs upon receipt by WIPO of the international application). This publication of the international application will be considered a publication in the U.S. under 35 USC 390. The U.S. will not allow deferral of publication. Thus, any concerns related to the early publication of design patent applications as a policy matter have already been decided by Congress in favor of publication.

[7] As with utility patent applications, the public may well be aware of better prior art for design patent applications than the USPTO. If design patent applications were published, interested members of the public could submit prior art to the USPTO with the result that any issuing design patents would have been more thoroughly examined, benefiting both the applicant and public.

[8] Because of the speed of issuance, design applications filed only in the U.S. would need to be published 6 months after their U.S. filing date. Any concern with timing of publication relative to commercialization would seem to be handled by a 6 month period between filing and publication, which mirrors The Hague Agreement, and the relatively rapid grant (typically 15 months) of design patents.

[9] By providing that publication under The Hague Agreement will be deemed a publication under 35 USC 122(b), the implementing legislation (35 U.S.C. 390) makes such design patent applications eligible for provisional rights under 35 USC 154(d).

Accelerating ex parte PTAB Appeals: For a Fee

Thu, 08/21/2014 - 13:00

By Dennis Crouch

The Patent Trial and Appeal Board (PTAB) is burdened with a statutory mandate to quickly reach final determination in its post-issuance review trials. To meet that requirement, the PTAB has put tremendous resources into its trial teams to ensure sufficient bandwidth to handle the hundreds of inter partes trials. At the same time, a 25,000 case backlog of pending ex parte appeals persists at the Patent Trial and Appeal Board.  Those cases do not have as clear of a statutory-mandate for rapid processing and, as a result, have clearly languished as the Board developed its post-issuance review trial program with most cases now waiting more than three years for a decision from the Board. (Notice-of-Appeal to Board Decision).  Rather than dealing with its poor statistics, the PTAB appears to have simply stopped publishing them.

For many patent applicants (though certainly not all), the appeal delay is costly because it extends a period of ambiguity and it delays issuance of the patent rights.  Certainly, the vast majority of long-pendency patent applications (those that issue more than 7 years after filing) spent considerable time in the appeal queue awaiting a reversal of an examiner rejection. Those late-issued patents have the potentially of being disruptive to marketplaces that have developed and grown in the absence of an issued patent.

A few months ago, I conducted what I called a “10-second”survey on Patently-O regarding the potential market for accelerated PTAB decisions in ex parte cases.  I asked:

Would you pay an extra $5,000 for accelerated PTAB decisions in ex parte cases that issue[] within nine months rather than waiting the standard 2 1/2 years?

I should note that the 2 ½ year figure had increased. The results are instructive and somewhat fit the model seen with the $4,000 fee for prioritized “track one” examination, although the market for accelerated appeals seems somewhat greater.  The vast majority of the 614 responses indicated that they would use the fast track in at least some cases – with most indicating that the fast track would be used in >5% of cases.

Although not any final word on the market for accelerated appeals, the chart is indicative of a demand for accelerated appeals.  And, although not a solution to the docket problem, acceleration of a subset of appeals offers the potential of alieviating the most some of the more pointed needs.

I should note here that a subset of accelerated examination cases (“made special”) are also accelerated when pending before the PTAB. However, those do not include prioritized examination cases under the pay-for-speed program.  I do not have any statistics on how that acceleration impacts the timing of appeals.