The Patent Indefiniteness Requirement now has Teeth!

by admin - June 3rd, 2014

The Supreme Court reverses the Federal Circuit’s Indefiniteness Standard in a decision likely to negatively impact patent owners.

As many know who have been involved in patent litigation, it is often impossible to determine claim meaning in some patents.  This uncertainty makes patent claim construction extremely difficult – both for the lawyer advising a client and the district judge.  It also allows certain patent owners (usually trolls) to file outlandish patent infringement lawsuits based on poorly worded and vague claim interpretation.

The uncertainty existed despite the definitiveness requirement in the Patent Act which requires that a patent specification “conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as [the] invention.” 35 U. S. C. §112, ¶2.  The uncertainly existed because the Federal Circuit’s standard to determine indefiniteness under this §112 requirement was whether the claim is “amenable to construction.”  In my view, this is a much lower standard than the statutory language requires.

In Nautilus, Inc., v. Biosig Instruments, Inc., the Supreme Court reversed the Federal Circuit’s standard and held that a patent is invalid for indefiniteness if its claims, read in light of the patent’s specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.

Assigned to Biosig Instruments, Inc., the patent in dispute (U.S. Patent 5,337,753, the ’753 patent) involves a heart-rate monitor used with exercise equipment.  Prior heart-rate monitors, the patent asserts, were often inaccurate in measuring the electrical signals accompanying each heartbeat (electrocardiograph or ECG signals) because of the presence of other electrical signals (electromyogram or EMG signals), generated by the user’s skeletal muscles, that can impede ECG signal detection. The invention claims to improve on prior art by detecting and processing ECG signals in a way that filters out the EMG interference.

Claim 1 of the ’753 patent, which contains the limitations critical to the case, refers to a “heart rate monitor for use by a user in association with exercise apparatus and/or exercise procedures.” The claim includes, among other elements, a cylindrical bar fitted with a display device; “electronic circuitry including a difference amplifier”; and, on each half of the cylindrical bar, a “live” electrode and a “common” electrode “mounted . . . in spaced relationship with each other.

Biosig filed a patent infringement suit, alleging that Nautilus, Inc. sold exercise machines containing Biosig’s patented technology. The District Court, after conducting a “Markman” hearing to determine the proper construction of the patent’s claims, granted Nautilus’ motion for summary judgment on the ground that the claim term “in spaced relationship with each other” failed §112, ¶2’s definiteness requirement.

The Federal Circuit reversed and remanded, concluding that a patent claim passes the §112, ¶2 threshold so long as the claim is “amenable to construction,” and the claim, as construed, is not “insolubly ambiguous.” Under that standard, the Federal Circuit determined, the ’753 patent survived indefiniteness review. As noted above, the Supreme Court correctly reversed and finally added “teeth” to the definiteness requirement of the patent act.

This decision may affect thousands of claims.  It also might affect thousands of licenses and previous analyses because patent lawyers, in performing invalidity analysis have previously had no choice but to follow the Federal Circuit’s holdings and have often ignored the definiteness requirement of the Patent Act.

The Nautilus decision will also make invalidity of patents much easier – especially in administrative procedures before the patent office such as covered business method review and inter partes review.

What does a Provisional Cost?

by admin - April 21st, 2014

The cost of a provisional depends on the invention.  An invention that takes 20 drawings to describe will cost more than an invention that takes 3 drawings to describe.

A provisional must meet most of the requirements of a regular utility patent.  In other words, the provisional must contain a written description of the invention (not just a description of the idea underlying the invention) and enable one skilled in the art to make and use the invention by reading the specification and drawings of the patent application.  If these requirements are not met, the provisional may not provide any patent protection.

In fact, the only theoretical difference is that a utility application must have claims where a provisional is not required to have claims.   However, under the relatively new American Invents Act, there are references to the claimed invention.  So, many lawyers have been including claims in a “full provisional.”  Furthermore, if international protection is important, the provisional must have claims to be recognized by foreign patent offices, such as the EPO.  (If foreign filing is important, the provisional should actually have “European Style” claims so that Europe will accept the filing date of the provisional.  A discussion of an “international” ready provisional is beyond the scope of this post. Just remember that if foreign filing is important, the provisional should cost more and be adapted for acceptance later by other patent offices.)

From a practical perspective, the client should think of the full provisional as a first draft of the utility application.    A “US only” provisional should have all of the required substance, but can forgo some of the formalities because the provisional will not be examined.  So, if the costs of a utility might average $1000/page of drawings, the costs of a provisional might average $700/page of drawings.

Additionally, because of the “first to file” provision of the AIA, it is important to get applications on file as soon as possible.  U.S. inventors and companies no longer have the luxury of waiting and relying on evidence such as inventor’s notebooks.  Consequently, many lawyers have been using the concept of filing at least two provisionals.  The first provisional is a “quick and dirty” filing or presentation of an idea, but may not fully describe or enable the invention in as much detail as a full provisional.  Hopefully, the first provisional might poison the waters for your competition and give you a first priority date (depending on the detail of the description).  However, because the application may not have been fully thought out, the first provisional might not convey the patent rights of a full provisional.  The theory is that it can’t hurt and might help.  So, the process is to file the “idea provisional” within days of receiving the invention disclosure, then immediately (or as soon as practical) follow up by filing a full provisional.   The costs of the these “idea provisionals” are around $1500.

In sum, the costs for filing a “US only” provisional application can be estimated to be:

First or “idea” provisional           $1500

Second or “full” provisional        $700/per page of drawings (assuming at least 5 drawings).

Patent Quality Levels

by admin - April 2nd, 2014

At the risk of over simplification, most companies employ one or more of four quality “levels” patents.  Often companies will have patents from a mixture of the levels below.  Sometimes, this mixture occurs as a result of design and prioritization.  Sometimes, it occurs as the result of political influence within the company or other factors.  Typically, the quality levels are:

Level 1 – Defensive patents.

  • Defensive patents are patents usually obtained by large companies having huge portfolios.  The large companies will typically cross license with their competitors and usually will not sue their competitors.  This strategy is conceptually similar to an arms race.
  • These patents are “defensive” in nature because if a competitor sues them for patent infringement, they will counter claim with a large number of their own patent.
  • Because the patent portfolios are so large, a defendant corporation can often find 20 to 50 patents that can be alleged in counterclaims.  Very few if anyone can defend against 20 to 50 patents (regardless of the validity of the patents), so the plaintiff companies will settle rather than face the litigation costs of defending 20 to 50 patents.
  • When using defensive patents, the object is not to protect the technology or obtaining royalties.  The object is to develop a litigation weapon which would make any suit against the company prohibitively expensive.
  • Because there are a large number of patents, cost control is important and the quality of the individual patents are often suspect.
  • Such patent applications are usually drafted on a “fixed-fee” model.  In a law firm, these patents are drafted by patent agents or very young lawyers.
  • IBM created this patent portfolio model when they determined it was too expensive to perform clearance searches on their products and/or to design around the patents of others.  Many large companies have since followed IBM’s model.

Level 2 – Mainstream Patents:

  • Although large companies can afford to develop large portfolios often involving thousands of patents, most small to mid-size companies cannot maintain a large number of portfolios.  Thus, most of these companies will opt for mainstream patents.
  • Mainstream patents are typically better quality than true “defensive” patents.  They are typically longer in length, have more claims, and more carefully drafted to withstand some scrutiny (either in acquisition or litigation).
  • They typically may be used to protect a company’s secondary products and are often used by smaller companies to protect a company’s main products.
  • Budgets still play an important role in such patents.
  • One or two continuations may be sequentially filed to expand claim protection or two keep a “child” of the patent alive (so the owner is free to file additional claims to cover competitor’s products or future products).
  • Typically, U.S. companies will not file in other countries because of the costs of such foreign filings.  If foreign filing is contemplated, PCT applications are typically filed with U.S. style claims.

Level 3 – “Bet the company” Patents

  • These patents protect a company’s key technology.
  • They tend to be longer, have more claims, and more expensive.
  • Often the inventors and others will meet to “design around” the claims of such patents.  The “design” around solutions are then either included in the patent application or in other applications.
  • Such patents often start an extensive family tree of related patents where “continuation-in-part” and continuation patents are filed and prosecuted simultaneously.
  • Office Action Rejections are typically handled by face to face interviews to reduce prosecution history estoppel arguments in litigation.
  • If foreign filing is desired, the U.S. claims and/or specification are redrafted to better conform to the patent laws of different jurisdictions.
  • Oil companies, medical device companies, and drug companies often develop patents of Level 3 quality.

Level 4 – “Non-Practicing Entity” or NPE Patents

  • NPE are licensing only entities.  The advantage of an NPE model is that the NPE cannot be counter-sued for infringing patents in a larger company because the NPE does not produce its own products or services.
  • Although some NPE’s can readily license their technology, many NPEs must use the courts to enforce their licenses.  Consequently, NPEs assume all of their patents will be litigated.
  • Because most of the portfolio may be litigated, NPEs often employ prosecution procedures designed to make defending against the patent very expensive.  For instance, rather than modify one claim, NPE’s typically delete and replace 100 claims at a time.
  • NPEs typically employ a combination of Level 1 and Level 3 patents because most of their patents will see litigation.  Thus, a large percentage of their patents must be “litigation ready.”
  • NPEs will file many more continuations and more claims.  Often one patent specification will result 10 to 50 patents involving thousands of claims.
  • NPEs usually do not file foreign because of the expense and limited recovery in foreign jurisdictions.

In recent years, NPEs have been successful at asserting “junk” patents against many businesses.  These businesses have lobbied both the White House and Congress to change the patent law.  As is usually the case, Congress will probably hurt legitimate small business owners in the process in the same way medical malpractice laws prevented patients with actual injuries from fully recovering.

It is a new Patent Game

by Bill Naifeh - September 17th, 2011

On September 16, 2011 President Obama signed into law  the Leahy-Smith Patent Reform Act, thereby ending the most favorable patent system in the world for legitimate small businesses.

The law is lengthy (169 pages) and complex.  Furthermore, the provisions of the new law have a variety of effective dates.  Some of the provisions are effective immediately.  Some of the provisions, such as increased patent office fees will be instituted on September 26, 2011.  Yet other provisions are not be implemented until 2012 and 2013.

In my opinion, this law is an example of a broken democratic system.  The backbone of economic growth in this country has been small business, yet under this law, small businesses are the losers.

The law is a compromise hammered out of by essentially three political lobbies: (1) large technology companies who would rather not have a patent system in the U.S. (because they have the resources to win in the marketplace without patents); (2) U.S. pharmaceutical companies who are very dependent on a strong patent system, and (3) large multinational companies who want a harmonization of patent laws across the world.

Although there are some good provisions in the new law, in general, the result is a law which will make patents more expensive, harder to enforce, and much more like the system in Europe (where patents are also much more expensive and harder to enforce).

Senator Leahy said that the law will create 200,000 jobs.  In my opinion, he over estimated the number of jobs by at least 200,000 (or he was talking about the creation of 200,000 jobs in China).

I am still working through the implications of the 169 pages of changes.  However, the reported changes are:

I.          Third-Party Challenges to Patent Rights:

A.        The bill includes three expanded ways that a third party can use the Patent Office to challenge a patent: Pre-Issuance Third-Party Submissions; Third-Party Requested Post-Grant Review; and Inter Partes Post Grant Review.

1.         Pre-Issuance Third-Party Submissions:

a.         Under the new law, third parties would be allowed to submit any printed publication along with a description of the relevance to the USPTO to be considered during the examination of a pending patent application.

2.         Third-Party Requested Post Grant Review:

a.         A post grant review proceeding would be created (similar to the current reexamination proceeding) that could be initiated by any party.

b.         The review would allow a third party to present essentially any legal challenge to the validity of at least one claim.

c.         A major limitation on the post grant review is the request for review must be filed within nine-months of issuance.  This is similar to Europe.

B.        Inter Partes Review Proceedings:

1.         Once the nine-month window for post grant review is expired, a party may then file for “inter parties review.” This new system would replace the current inter-parties reexamination and would be limited to consideration of novelty & obviousness issues based on prior art patents and printed publications. (It appears that the current third-party ex-parte reexamination would remain a viable option as well).

II.         Damages:

A.        Patent defendants have argued that courts often treat damages issues as afterthoughts with little procedural control. The proposed amendment would add specific procedures and checks on how a judge manages the damages portion of a case.

B.        The new law requires that a court “identify methodologies and factors that are relevant to the determination of damages” and that “only those methodologies and factors” be considered when determining the damage award.

C.        Prior to the introduction of damages evidence, the court is required to consider either party’s contentions that the others damage case lacks a legally sufficient evidentiary base.

D.        The new law requires a judge to bifurcate the damages portion of a trial if requested “absent good cause to reject the request, such as the absence of issues of significant damages or infringement and validity.”

E.        The new law appears to bar a judge from amending the discovery schedule or any “other matters” based upon the trial sequencing.

F.         Damages:

1.         The new law would codify the Federal Circuit’s holding with the words “Infringement is not willful unless the claimant proves by clear and convincing evidence that the accused infringer’s conduct with respect to the patent was objectively reckless. [i.e., that] the infringer was acting despite an objectively high likelihood that his actions constituted infringement of a valid patent, and this objectively-defined risk was either known or so obvious that it should have been known to the accused infringer.”

2.         The new law also provides:

a.         accusations of willful infringement must be pled with particularity (following FRCP 9(b));

b.         proof of knowledge of patent is insufficient to establish willful infringement;

c.         a pre-lawsuit notice of infringement cannot itself establish willfulness unless the notification is fact specific in explaining the infringement;

d.         the failure to obtain the advice of counsel (or to present that advice to the jury) “may not be used” to prove willful infringement or inducement of infringement; and

e.         damages subject to trebling are only those accrued after the infringement became willful;

f.          in a “close case” there will be no willful infringement (here, the new law requires a judge to “explain its decision” and to make a decision prior to the issue being tried by the jury).

III.        First-Inventor-to-File

A.        The new law moves the US to a first-to-file system. Each patent application would be given an “effective filing date,” and the patentability will be judged on whether any prior art was available prior to the filing date.

1.         The U.S. one-year grace period would remain in effect, but only for the inventor’s own disclosures (and disclosures derived from the inventor).

2.         Obviousness will also be judged as of the effective filing date. (Inventors will no longer be able to swear behind prior art nor will they be able to establish priority in an interference proceeding.)

3.         A new creation in the bill is a “derivation proceeding” that would operate only in times where an original inventor alleges that a patent applicant derived the invention from the original inventor’s work.

IV.       False Marking:

A.        A large number of false patent marking cases have been filed plaintiff attorneys in the past few year looking to make a quick buck.  The bill would eliminate those lawsuits except for ones filed by the US government or filed by a competitor who can prove competitive injury.  This is provision is good for any legitimate business.

V.        Oath/Declaration: The bill would make it easier for a corporation to file a substitute inventor’s oath when the inventor is non-cooperative.  This is also a good provision for legitimate businesses.

VI.       Best Mode:

A.        The best mode requirement appears to be gutted.  An inventor will still be required to “set forth” the best mode for accomplishing the invention, the new law amends the existing statute to exclude failure of disclose a best mode from being used as a basis for invalidating an issued patent.  In other words, the best mode requirement is still law, but it is unenforceable.  This is another move towards the European System (which does not have a best mode requirement).

VII.      Fee Setting Authority:

A.        The PTO would be given authority to adjust its fees, so fees will increase.

You Cannot Patent Ideas (Theoretically).

by Bill Naifeh - October 5th, 2010

The foundation of United States patent law is based on a quid pro quo between the patent applicant (or patentee) and the government.  The government grants a monopoly for the invention in exchange for a technology disclosure which should increase the public’s collective knowledge.  Once the patent expires, anyone is then free to practice the invention.  Furthermore, because the patent is “laid open” to the public, anyone is free to use the information contained in the patent to invent other inventions which further increases the public knowledge.

If there has been no increase in public knowledge, the patent is likely to be invalid.  In many patent cases, the underlying question is whether the increase in public knowledge was substantial enough to deserve a twenty year monopoly.  A patent that does not increase the public knowledge is likely to be called a “junk patent” and will probably be held to be invalid if litigated.

Contrary to popular opinion, one cannot patent an idea because an idea by itself does not provide a sufficient increase public knowledge.  You can only patent an invention and only if you describe the invention in enough detail to increase public knowledge.

For instance, in the 1960’s, Gene Roddenberry came up with the idea for matter transportation for his Star Trek series based on Einstein’s famous e=mc2 equation.  However, the idea by itself is not patentable.  In order to receive a patent, Mr. Roddenberry would be required to describe the invention in such a way as to allow others to make and use the invention.  He is not required to have actually produced a working model of the invention, but his specification would have to contain enough detail to teach others how to make and use the invention.  In other words, more is required than just the presentation of the idea.

Patents may be thought of as having two parts: (1) a specification which contains the patent holder’s contribution to the public knowledge, and (2) the claims which is the scope of the monopoly.  The claims are usually the result of a bargaining process with the United States Patent and Trademark Office (“USPTO”) during a process known as “patent prosecution.”

During patent prosecution, proposed claims are submitted by the patent applicant or patentee.  The proposed claims are examined by the USTPO and often rejected by the USPTO.  Upon rejection, the patentee proposes new claims or arguments.  This cycle repeats until both sides reach a compromise regarding the scope of the claims or the claims are ultimately abandoned or appealed.  Hopefully, junk patents are stopped by the USPTO.   However, sometimes they get through for reasons that may have very little to do with the patent itself.  So, while  ideas should not be patented, sometimes ideas are patented.

It is especially hard to distinguish software inventions from mere presentation of ideas.  Sometimes even experienced attorneys cannot tell when a disclosure is a presentation of an idea which provides no real increase in public knowledge and when the disclosure adds enough to the public knowledge to be patentable.  In my opinion, this is the crux of the patent software debate and one reason why Europe “officially” does not recognize software patents.

Of course, as attorneys we talk in terms of statutory language which includes terms such as enablement, written description, and best mode requirements.  In reality, though, the underlying question is the same:  Did the inventor increase public knowledge enough to deserve a 20 year monopoly on his invention?

Bill Naifeh is a patent attorney in Dallas, Texas.  He often works with clients on a part time “in-house”  basis to assist clients with the management of their patent portfolios and patent litigation strategies.  More information may be found at www.naifeh.com.

Interpreting Patent Claims

by Bill Naifeh - October 4th, 2010

Many businessmen and engineers evaluate patents for one reason or another.  Usually, the process boils down to an interpretation of patent claims.   As defined in other posts on this site, patent claims are the governmental monopoly granted to an inventor in exchange for the inventor’s disclosure of technology.

Unfortunately, claims are usually stated in a technical and arcane language.  Furthermore, U.S. courts have held that claims do not always mean what they say.  In other words, to interpret the scope of the claims, one must often rely on more than just the “plain meaning” of the claim language.

To further complicate matters, Federal case law has also established legal doctrines which have both expanded claim breadth and have decreased claim breadth.  So, to interpret the proper claim scope for any given claim, several sources are usually analyzed and several legal doctrines are usually applied.

To determine the meaning of a claim, the plain wording and terms of the claim are obviously consulted first.  The wording and terms are then compared to the usage of the claim terms and wording as used in the patent specification.  Often, the terms will be defined in the specification or used in ways which will limit the scope or meaning of the terms.

Next, the patent prosecution history will be consulted.  The patent prosecution history is the back and forth negotiation with the USPTO to arrive at the allowable claims.  In many situations during prosecution, the patentee will make statements or arguments which can be used later to define or limit the scope of the claims.

Other related patents or patent applications owned by the patentee may also be consulted to see if the patentee defined similar terms in these applications.

Patents are presumed to be valid.  So, if a claim element can be interpreted in two different ways and one of those ways will invalidate the claim due to prior art, the claim element will be interpreted in such a manner as to uphold the validity of the patent.

Outside sources or extrinsic evidence such as industry dictionaries or reference materials (published around the time of the patent filing) may also be consulted in certain situations.

Finally, certain judicial doctrines are applied to the claim scope.  For instance, under the doctrine of equivalents, certain patent claim terms may be broadened to include their “equivalents.”  As an example, if the claim uses a nail, it is possible than a product that uses a screw might also infringe on the claim if the screw performs the same function as the nail, in the same way to achieve the same result.

The above process is only one suggested way of determining claim scope.  When in doubt, talk to a patent lawyer.

USPTO Issues Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos

by Bill Naifeh - August 3rd, 2010

The United States Patent and Trademark Office (USPTO) has recently announced that it has prepared further interim guidance for the patent examining corps to use when determining subject matter eligibility under 35 U.S.C. § 101 in view of the recent decision by the United States Supreme Court in Bilski v. Kappos. This interim guidance is a supplement to previously issued interim instructions dated August 24, 2009, and it supersedes the interim guidance memo to the examining corps dated June 28, 2010.   The USPTO is seeking public comment on this interim guidance and intends to issue final guidance after evaluating the public comments.

According to the USPTO, the interim guidance sets forth the factors that should be considered in determining subject matter eligibility of method claims in view of the abstract idea exception.   According to the guidance, the machine-or-transformation test remains an investigative tool and is a useful starting point for determining whether a claimed invention is a process under 35 U.S.C. § 101 but, as the Supreme Court made clear, is not the sole test for determining subject matter eligibility.  The interim guidance provides additional factors to aid in the determination of whether a claimed method is an abstract idea.

“With this set of interim guidance, we are providing the patent examining corps and the IP community with additional guidance regarding factors that may be considered in determining subject matter eligibility in light of the Supreme Court’s decision in Bilski,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos.  “We now seek input from the public as we further refine and finalize this guidance.  In the meantime, this interim guidance will assist our examiners in their examination of applications where subject matter eligibility of method claims must be determined.”

For more information, see the July 27, 2010 Federal Register at: http://edocket.access.gpo.gov/2010/pdf/2010-18424.pdf.

The interim guidance was signed on July 21, 2010.   An internal memo issued to the patent examining corps on the subject can be found on the USPTO Web site:

http://www.uspto.gov/patents/law/exam/bilski_guidance_27jul2010.pdf

Bilski – Great News for Software Patent Holders

by Bill Naifeh - June 28th, 2010

The Supreme Court issued its ruling in the infamous “In re Bilski” case today.    The bottom line:  Bad news for Bilski, but probably good news for software patent holders.

Bilski attempted to claim a hedging method as his invention.  Specifically, “a method of provide one of a good or service to at least one entity at one of a payment, rate, or price that is capped at a predetermined amount, comprising.  .  .”

The Patent Office rejected this claim (along with several other claims) and the Federal Circuit upheld the rejection.  Not only did the Federal Circuit reverse its earlier “State Street” decision which allowed business method patents, it went further with a decision that could have destroyed many true software patents.

In Bilski, the Federal Circuit re-introduced an old rule called the “machine-or-transformation” test.  Specifically, the Federal Circuit held that a process is not patent eligible unless: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.  The Federal Circuit also concluded that this “machine-or-transformation test” is the sole test for determining patent eligibility of a “process” under section 101 of the patent statute.

A literal application of the “machine-or-transformation” test could have invalidated many existing software patents.

The Supreme Court held that it was wrong for the Federal Circuit to hold that the machine-or-transformation is the sole test for determining patent eligibility.  They also stated that business method patents might be patentable even if the particular claims in Bilski were not.  The Supreme Court held that the claims of Bilski were directed to abstract ideas.  Consequently, they were not patentable.

The Supreme Court, however, did not specifically address software patents and kept its discussion focused on business method patents.  Consequently, it appears that software patents are indeed safe.  Of course, the question for patent attorneys is how to distinguish an abstract idea from a process claim in a software patent.  In many instances, the fundamental steps of a software program may be characterized as abstract ideas.   So, how much detail is necessary before the claims of a patent become “concrete.”   The Supreme Court did not leave us with any distinguishing tests, but then the Court has never been known for actually developing workable rules.

One relatively safe approach might be to follow our European counterparts.  In Europe, software patents are not patentable per se. However, such restrictions are easily avoided by claiming a computer running a particular process.  It seems that such a claiming strategy might be a safe bet for the U.S. until the lower courts can add more definitive rules.

The Advantages of Narrow Patent Claiming

by Bill Naifeh - March 9th, 2010

The Legacy Approach: For decades, patent attorneys have been taught to submit claims to the USPTO that are as broad as possible.  The theory is that submission of broad claims are opening gambits in a negotiation process that will ultimately yield the correct scope of claims for the applicant.

The Current Situation: The patent prosecution situation has radically changed over the past few years.  A combination of political pressure on the USPTO and case law have made patents harder to acquire than any time in recent memory (although the Obama administration appears to increasing the allowance rates).  Furthermore, the patent office is buried in applications.  In some technical fields, it often takes several years before a first office action is even issued.  Operating under a legacy theory of broad claiming often will result in significant disadvantages to the applicant.

Some of the disadvantages with broad claiming are:

  • Loss of Equivalents – At the risk of oversimplification, when an applicant narrows his claims during prosecution, the applicant gives up any equivalence relating to the narrowing amendment.  Broad claiming usually results in claim amendments and claim amendments usually result in a significant loss of equivalence to the claim terms.
  • Loss of a Chance at Negotiation – In years past, the patent office would issue two or three non-final rejections before issuing a “final rejection.” Multiple non-final rejections gave applicants room to effectively negotiate to the correct claim scope.  Currently, examiners issue one non-final rejection and one final rejection which are usually based on the first claim set.  Because final rejections severely limit the Applicant’s ability to amend claims, Applicants essentially have one chance at negotiation.  Thus, they simply do not have the luxury of the back and forth negotiation process of times past without filing additional continuation requests.  Essentially, applicants have one shot at negotiation.  Broad claims render this negotiation chance useless because the parties will always be too far apart to effectively reach a compromise.
  • Obviousness – Recent case law has made it easier than ever for an examiner to reject an application based on “obviousness.”  Broad claiming allows the examiner to easily “knock out” the independent claims with anticipation arguments, then allows the examiner to knock out each of the dependent claims with obvious arguments.  Under current case law, these obviousness arguments can be extremely difficult to overcome.
  • Angering the Examiner – Most patent examiners are young engineers who are not familiar legal nuances nor with potential malpractice law suits.  When they receive an application with broad claims, they immediately become defensive and view the initial submittal of broad claims as a waste of their time.  They will then “knock” out the claims based on art that may not even be that relevant to the invention.

A New Approach: For many applicants, the current situation requires a fresh approach to the patenting process.  In contrast to broad claiming, it may be better to just claim the invention.  In other words, provide claims which cover an exact or nearly exact copy of the invention.  Then, once some claims are allowed and the most relevant prior art has been identified, the applicant can broaden the claims using continuation practice to claim additional patent scope.

Advantages of narrow claiming are:

  • Teaching the Examiner – most examiners no longer read the specification.  They simply turn to the claims and start conducting word searches to “knock” the claims out.  A narrow claim essentially explains the invention and forces the examiner to understand the invention.
  • Most Relevant Art is Uncovered – Narrow claiming forces the examiner to find the most relevant art rather just knocking out the broad claims based on art that may not be relevant to the actual invention.
  • Obviousness Rejections are Easier to Overcome – Narrow claiming forces the examiner to try to knock out all of the elements of a claim.  This forces them to combine multiple references.
  • Preserves Equivalents – because most of the claim elements will not be narrowed during prosecution, there is less chance that prosecution history estoppel will prevent the application of the doctrine of equivalents.
  • Faster Patent Protection – obviously, narrow claim will reduce the negotiation process which will provide for faster allowance.  Again, the scope of protection can be widened later with continuations.

Disadvantages:

  • Additional Work – under this approach, one should still draft broad claims, but place these in a “claim bank.” A “claim bank” is a section towards the end of the application which consists of claim-like sentences of varying scope.
  • Additional USPTO Fees – because additional protection will be obtained through the use of continuations, there will be additional filing fees and maintenance fees paid to the USPTO.  However, these USPTO fees are likely to be offset against much lower attorney fees.

If narrow claiming has potential advantages, why do most outside law firms actively encourage the practice of submitting broad claims?  First, one should realize that patent attorneys are creatures of habit.  Second, one should keep in mind that many law firms have been sued for legal malpractice for claiming less than the applicant thought they should have received.  Obviously, broad claiming can provide an effective defense to a law firm in future cases.  Third, broad claiming will typically lead to numerous offices actions from the USPTO which will result in a greater amount of legal fees during the course of prosecution.

Every situation is unique.  So, narrow claiming may not be right in every situation.  However, narrow claiming should at least be considered when developing an overall patent strategy.

Bill Naifeh is a patent attorney in Dallas, Texas.  He often works with clients on a part time “in-house”  basis to assist clients with the management of their patent portfolios.  More information may be found at www.naifeh.com.

Software Patents

by Bill Naifeh - February 20th, 2010

While there is no reason to go into the entire history of software patents, it is fair to say that filings of software patents increased exponentially during the 1990s.  In 1998, in a case called State Street Bank & Trust Co. v. Signature Financial Group, Inc., the Federal Circuit held business methods were eligible for patent protection if they involved some practical application and, in the words of the State Street opinion, “it produces a useful, concrete and tangible result.”  This decision opened the door for an avalanche of Internet, software, and business method patents.

In 2008, the Federal Circuit in In re Bilski seemingly reversed itself in a sweeping ruling by imposing a “machine or transformation” test to patentable methods.  This ruling could destroy many existing software and business method patents.  At the risk of oversimplification, the Federal Circuit held that software method patents are not “patentable subject matter” unless the method runs on a special purpose machine or computer, or the method transforms or changes physical matter.  The decision in Bilski was appealed to the Supreme Court.  They accepted cert – which means that they will probably change the machine or transformation test.  Until the Supreme Court rules, the future of software patents is in doubt.

Regardless of the outcome of Bilski, the Federal Circuit seems to be remain skeptical of software patents.  Over the past few years, we have seen more holdings of invalidity due to reasons such as lack of enablement.   If the Supreme Court overturns Bilski, it is also likely that the Federal Circuit will continue to invalidate software patents for other reasons, such as  failure to meet the best mode requirement.

Patents are essentially a quid pro quo with the government.  The inventor discloses the invention (which increases the general public knowledge) in exchange for a 20 year monopoly on the idea.  However, in order for this trade to be fair, there must be a true increase in the public knowledge.  There are many requirements designed to determine if there has been a true increase in public knowledge.  One requirement in the U.S. is the “best mode” requirement.  In other words, in order to receive the monopoly, the inventor must disclose the best way (or mode) he knows of to enable others to make and use the invention ON THE DAY  he files the patent application.  The inventor does not, however, have to update the application after the patent application is filed.

If a software patent application is filed early (e.g., during “design requirements” stage), the description in the patent can be limited to the basic processes of the application and/or the design requirements document.  In fact, a description of the flow charts describing the functionality of the computer program will usually suffice.

However, if the inventor waits until the software is ready for market or beta testing, the description in the patent may have to be more detailed because the “best mode” requirement now requires a description of the completed product and not just a flow chart.  Consequently, screen shots and other functionality may have to be put into the description of the patent in addition to the flow charts.  This additional detail will significantly increase the cost of a patent application.

In conclusion, file software patent applications early – at the design requirements or flow chart stage.

Bill Naifeh

www.naifeh.com