USPTO and JPO Announce Patent Cooperation Treaty Agreement

The United States Patent and Trademark Office (USPTO) and the Japan Patent Office (JPO) have recently announced an implementation agreement under which the JPO will act as an available International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) for certain international applications filed with the USPTO as the Receiving Office, under the Patent Cooperation Treaty (PCT). The USPTO and JPO are two of the intellectual property offices authorized to conduct international searches and international preliminary examinations in the PCT system.

The PCT is an international agreement that simplifies the filing of patent applications in its contracting countries. A PCT application has the effect of a national application for a patent in any of the designated PCT countries. International applicants receive an International Search Report and an International Preliminary Report on Patentability to help them determine if an application meets basic patentability criteria before committing to the high cost of translating and entering the national stage in one or more PCT countries.

The agreement took effect on July 1, 2015.  The agreement is intended to end on June 30, 2018, but as is typical with these types of bilateral agreements, the USPTO says that it may be continued by mutual written consent.

The addition of JPO as an available ISA and IPEA will allow applicants additional flexibility in choosing an international authority based on the technology disclosed in the international application.

“This latest collaboration between USPTO and JPO exemplifies the cooperative spirit between our Offices and benefits applicants by providing an additional option for examination of their international applications directed to green technology,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO Michelle Lee.

Under the agreement, JPO may act as an available searching authority and preliminary examining authority, provided that:

  1. The applications are submitted in the English language.
  2. The claims of the application are directed to the field of green technology as defined by certain International Patent Classification classes.
  3. The JPO has not received more than 5,000 international applications from the USPTO during the three-year period from July 1, 2015 to June 30, 2018, and not more than 300 applications per quarter during the first year, and not more than 475 application per quarter during the second and third years.
  4. The JPO is chosen as a competent authority by the applicants.

Further details on the use of JPO as an ISA/IPEA for applications filed in the US receiving office, including the International Patent Classification classes which define the field of green technology according to this agreement, will be made available on the USPTO Web site.

While 5,000 international applications seems like a small number, the USPTO has in recent years overestimated the popularity of this type of program. Thus, bandwidth to participate shouldn’t be an issue, at least if past history is any guide.

Obviousness and the modern-day “flash of creative genius”

With the end of the Supreme Court’s October 2014 term at hand, I thought it might be interesting to take a journey back to look at two of the biggest patent decisions in recent memory. Today we will focus on obviousness and KSR v. Teleflex.

There is absolutely no doubt that the Supreme Court’s decision in KSR largely took away objectivity, instead supplanting it with a subjective test. Ever since, the Federal Circuit and the Patent Office have struggled to get objectivity back into the test. The Federal Circuit has largely been successful, with at least several notable exceptions. With over 8,500 patent examiners, most of whom are not lawyers, the Patent Office has not been quite so successful, despite their best efforts: Many patent examiners continue to provide conclusory obviousness rejections.

It is hard to oversell the Supreme Court’s decision in KSR International v. Teleflex, simply because the question presented called into question one of the most well-established aspects of United States patent law. The question the Supreme Court invited briefing and argument on was this: “Whether the Federal Circuit has erred in holding that a claimed invention cannot be held obvious, and thus unpatentable under 35 U.S.C. §103(a), in the absence of some proven ‘teaching, suggestion, or motivation’ that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed.”

Obviousness today is about predictability of results. This is true because, in addressing the foregoing question, the Supreme Court did away with the so-called teaching, suggestion or motivation test. Prior to KSR, if there was no teaching, suggestion or motivation to combine references, the patent examiner could not reject the claimed invention. Today, however, there are other rationales available to the examiner:

  1. If the invention is a product of combining prior art elements according to known methods to yield predictable results, the invention is obvious.
  2. If the invention is created through a substitution of one known element for another to obtain predictable results, the invention is obvious.
  3. If the invention is achieved by using a known technique to improve a similar device in the same way, the invention is obvious.
  4. If the invention is created by applying a known improvement technique in a way that would yield predictable results, the invention is obvious.
  5. If the invention is achieved from choosing a finite number of identifiable, predictable solutions that have a reasonable expectation to succeed, the invention is obvious.
  6. If known work in one filed of endeavor prompts variations based on design incentives or market forces and the variations are predictable to one of skill in the art, the invention is obvious.

As you can see, rationales 3 and 4 are virtually identical. All of these also focus on whether the resulting invention was achieved by combining known references in a way to produce predictable results. Thus, the way you must argue obviousness post-KSR is to say that there is no teaching, suggestion or motivation to combine the references and that the resulting combination of elements would not have been understood to produce predictable results by someone of skill in the art.

Of course, the initial framework used for determining obviousness is stated in Graham v. John Deere Co. The test requires consideration of:

(1) Determining the scope and content of the prior art.

(2) Ascertaining the differences between the claimed invention and the prior art.

(3) Resolving the level of ordinary skill in the pertinent art.

(4) Secondary considerations of non-obviousness.

The big problem I have with obviousness after KSR, at least at the Patent Office, is that it is so unevenly applied. That could have been predicted by the Supreme Court retreating from an objective test and instead embracing a subjective test that requires the decisionmaker to focus on whether they believe the results achieved were predictable. Given the KSR test, there is unfortunately no rational way to guarantee that personal opinions and subjectivity is removed from the analysis. This can be easily confirmed just by looking at what happens with respect to software at the Patent Office. In some areas of the Patent Office that handle software-related inventions, everything is obvious, and in other areas, nothing is ever obvious. For example, if the software deals with any kind of GPS navigation system, you simply will not get the same examination that you would receive if your software powers an e-commerce system.

Time will tell where we go from here, but I am of the belief that we now have a modern-day version of the “flash of creative genius” test relative to obviousness.

House Judiciary Nixes CBM Extension

Congressman Darrell Issa (R-CA) at the National Press Club, Feb. 11, 2015.

Congressman Darrell Issa (R-CA) at the National Press Club, Feb. 11, 2015.

On Thursday, June 11, 2015, the House Judiciary Committee held a hearing for the purpose of marking up “the Innovation Act.”

One of the issues that took up a significant amount of time during the first half of the hearing was an amendment submitted by Congressman Darrell Issa regarding a proposed extension of covered business method (“CBM”) review. Those familiar with the America Invents Act (AIA) will undoubtedly recall that CBM reviews were ushered in as one of the three new post grant proceedings that could be used to challenge issues U.S. patents. The program was conceived to be temporary, and is scheduled to sunset on September 16, 2020. Issa’s amendment would have postponed the termination date of the program until December 31, 2026.

Unlike inter partes review (“IPR”), a petition for a CBM may NOT be filed unless the real party-in-interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent. “Charged with infringement” means “a real and substantial controversy regarding infringement of a covered business method patent such that the petitioner would have standing to bring a declaratory judgment action in Federal court.” 37 CFR 42.302(a). Additionally, unlike with IPR, a CBM proceeding can raise issues surrounding both patent eligibility under 35 U.S.C. 101 and sufficiency of disclosure under 35 U.S.C. 112.

Issa stated during the hearing that, at the time Congress passed the AIA, the idea was to create CBM review for a trial period and the program would be extended if successful. Issa is mistaken. The complete name of the process even has the word “transitional” in the title. The entire purpose of CBM review was to allow for challenges to certain financial business method patents in a post grant proceeding that could raise patent eligibility and sufficiency of disclosure. Those issues are off the table in IPR. They can be raised in Post Grant Review (PGR), but PGR is only available to challenge patents that were examined under the first-to-file provisions of the AIA. Thus, Congress wanted to allow for a form of PGR for financial business method patents granted under pre-AIA first-to-invent rules.  Thus, there is a time limit to the useful period of this special variety of post grant review.

“We should be ending [CBM] rather than extending it,” Congressman John Conyers (D-MI) stated in response.

Congressman Collins (R-GA) also explained that he cannot support extending CBM, saying that “a property right should be a property right.” Collins also expressed confusion regarding why this matter is pressing at the moment, saying: “I am confused as to why we are considering the extension of a program that is scheduled to sunset in 2020. Why are we debating this here today… do we really know how CBM will affect our economy… we should be having this debate in 2020.” Ultimately, Collins urged his colleagues to oppose this “premature amendment.”

Congresswoman Suzan DelBene (D-WA) echoed the comments of Collins, but also took issue with earlier comments of those in support of the amendment who said that there was no evidence that CBM has been inappropriately expanded beyond financial services patents. DelBene pointed out that there have, indeed, been instances where the Patent Trial and Appeal Board (PTAB) has been accused of expansively interpreting its own jurisdiction beyond what Congress envisioned when the AIA was passed.

The amendment to extend CBM was defeated by a vote of 18-13. At least for now, it is not in the House bill. If and when the bill gets considered on the floor of the House, extension of CBM could resurface in one way or another.

Supreme Court Decides Commil USA v. Cisco Systems

On May 26, 2015, the United States Supreme Court decided Commil USA, LLC v. Cisco Systems, Inc., a case that dealt with inducement to infringe. More specifically, the issue considered by the Supreme Court was whether a good faith belief of patent invalidity is a defense to a claim of induced infringement. In a 6-2 decision written by Justice Kennedy, the Supreme Court ruled that belief of invalidity is not a defense to a claim of induced infringement.

Justice Kennedy started his substantive analysis with a discussion of direct infringement, which was joined by Justices Ginsburg, Alito, Sotomayor and Kagan. Justice Thomas, who joined in the majority with respect to Parts II-B and III, did not join the majority relative to the background discussion. Justice Thomas did not write a separate opinion so we can’t know for sure, but it seems  that Thomas chose not to join parts of the decision that were historical in nature (Part I) and the part of the decision where the majority discussed substantive legal issues not specifically germane to the issue presented.

Moving beyond direct infringement being a strict liability offense, and inducement requiring direct infringement, Justice Kennedy ultimately reached the question presented, namely whether a good faith belief of patent invalidity is a defense to a claim of induced infringement. Kennedy explained: “[B]ecause infringement and validity are separate issues under the Act, belief regarding validity cannot negate the scienter required under §271(b).” Kennedy concluded: “Were this Court to interpret §271(b) as permitting a defense of belief in invalidity, it would conflate the issues of infringement and validity.”

Kennedy seemed sympathetic to those who argue that an invalid patent cannot be infringed, which seems to make common sense. But he went on to explain that logic and semantics sometimes must give way to interpretation of an otherwise clear statutory framework:

[T]he questions courts must address when interpreting and implementing the statutory framework require a determination of the procedures and sequences that the parties must follow to prove the act of wrongful inducement and any related issues of patent validity. “Validity and infringement are distinct issues, bearing different burdens, different presumptions, and different evidence.” 720 F. 3d, at 1374 (opinion of Newman, J.). To be sure, if at the end of the day, an act that would have been an infringement or an inducement to infringe pertains to a patent that is shown to be invalid, there is no patent to be infringed. But the allocation of the burden to persuade on these questions, and the timing for the presentations of the relevant arguments, are concerns of central relevance to the orderly administration of the patent system.

In addition to the statutory language that Kennedy found clearly on point, he explained that there were also several practical reasons why a good faith defense should not be allowed. For example, if someone believes that a patent is invalid, they should file a declaratory judgment action (assuming they have standing) or could file a petition for inter partes review with the Patent Trial and Appeal Board (PTAB).

Kennedy also specifically explained that the Court is mindful of abusive litigation tactics employed by so-called patent trolls. Raising the issue seemed wholly out of place and a bit odd given that Kennedy also quickly explained that in this case the parties raised no issue of frivolity. The issue of patent trolls must be weighing on the Court very heavily for it to be inserted by Kennedy in a decision where no one was alleged to have been a patent troll.

Ford opens electric vehicle patents for licensing to competitors

Ford Motor Company has recently announced that it is offering competitors access to its electric vehicle (EV) technology patents, a move the company says is aimed at helping accelerate growth of industry-wide research and development of electrified vehicles.  Ford is also set to hire an additional 200 electrified vehicle engineers this year as the team moves into a newly dedicated facility – Ford Engineering Laboratories – home to Henry Ford’s first labs in Dearborn.

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