USPTO Issues New Guidelines on Patentable Subject Matter

The USPTO recently issued new guidelines for patent examiners to use in determining whether a claimed invention meets the baseline criteria to be eligible for patent protection. Recent Supreme Court cases have significantly altered these criteria. Section 101 of the Patent Code says:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

Supreme Court to Decide Standard of Review for Patent Claim Interpretation Rule

The Supreme Court on Monday granted a petition for review of the Federal Circuit's en banc decision upholding its practice of applying de novo review of patent claim construction decisions. Rule 52 states that "findings of fact ... must not be set aside unless clearly erroneous.” The petitioner stated the question on appeal as:

Whether a district court’s factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires (and as the panel explicitly did in this case), or only for clear error, as Federal Rule of Civil Procedure 52(a) requires.

I'll go out on a thick limb and predict that the Supreme Court will unanimously reverse the Federal Circuit and require some degree of deference to findings of fact in District Court decisions while still allowing de novo review of the legal conclusion. The only question is how the Court will attempt to draw a line between factual and legal conclusions in claim construction.

Supreme Court Preserves District Court Challenges to USPTO Decisions

In a recent decision, the Supreme Court unanimously decided that the ability of a patent applicant to present evidence to a District Court regarding a decision of the U.S. Patent and Trademark Office (USPTO) is limited only by the general rules regarding admissibility of evidence. The Court also ruled that a District Court should review USPTO decisions where new evidence is presented de novo. A contrary view was advanced by the USPTO.

Supreme Court to Decide if Isolated Human Genes Are Patentable

The U.S. Supreme Court recently granted review of a decision by the Court of Appeals for the Federal Circuit affirming that isolated human genes are eligible for patent protection. The Court granted review of a single question:

Are human genes patentable?

USPTO Proposes Increased Patent Fees

The USPTO released their proposed fee increases for the next fiscal year. Though most of the increases are moderate, there are some significant increases:

USPTO Announces Pilot for Responses After Final Rejection

The United States Patent & Trademark Office (USPTO) announced a new test program for handling applicant response filed after a final rejection. Under current law, an applicant does not have the right to amend a patent application, including the claims, after a final rejection. Under current practice, an amendment submitted after final rejection will not be entered unless the Examiner determines that the amendment puts all claims in condition for allowance or places the claims in better condition for appeal. Despite the fact that an amendment after final could be entered, the fact is that almost all such amendments are not entered with the most common reason being that the amendment cannot be examined without further searching. For that reason, an applicant wanting to amend an application in order to obtain allowance from the Examiner without the delay and expense of an appeal must file a Request for Continued Examination (RCE).

The End of False-Marking Trolls

The recent passage of the America Invents Act (AIA) has taken the steam out of the recent frenzy of patent false-marking suits by eliminating any risk for leaving expired patent numbers on covered products. (See the text of 35 USC § 292 below). It is still a violation to falsely mark a product as patented, but the high standard for proving intent to deceive the public remains. Furthermore, so-called false-marking trolls cannot take advantage of the statute because only the United States or a party that has suffered "competitive injury" as a result of false marking can bring suit.

U.S. District Court Declares False Marking Statute Unconstitutional

Unique Product Solutions, Ltd. v. Hy-Grade Valve, Inc. (N.D. Ohio Feb. 23, 2011)

U.S. District Court Judge Dan Polster ruled that the qui tam provision of the patent false marking statute (Title 35 U.S.C. § 292) unconstitutional under the Take Care Clause of Article II. The Court concluded, in pertinent part:

Applying the Morrison “sufficient control” analysis to the False Marking statute, it is clear the government lacks sufficient control to enable the President to “take Care that the Laws be faithfully executed.” As discussed, supra, unlike the FCA, the False Marking statute lacks any of the statutory controls necessary to pass Article II Take Care Clause muster. The False Marking statute essentially represents a wholesale delegation of criminal law enforcement power to private entities with no control exercised by the Department of Justice. See Pequignot, 608 F.3d at 1363 (False Marking statute is criminal). It is unlike any statute in the Federal Code with which this Court is familiar. Any private entity that believes someone is using an expired or invalid patent can file a criminal lawsuit in the name of the United States, without getting approval from or even notifying the Department of Justice. The case can be litigated without any control or oversight by the Department of Justice. The government has no statutory right to intervene nor does it have a right to limit the participation of the relator. The government does not have the right to stay discovery which may interfere with the government’s criminal or civil investigations. The government may not dismiss the action. Finally, the relator may settle the case and bind the government without any involvement or approval by the Department of Justice.

Examiners' Union Approves Changes to Patent Examination

One of the first actions taken by USPTO Director David Kappos was to propose reforms to the system used to allocate time for the examination of patents and grade a patent examiner's productivity. The count system probably has a greater impact on how patent examiners do their work than even the patent laws and regulations. In a nutshell, the proposed reforms give more credit for the first action taken on a patent application and give less credit for examining patents after the filing of a request for continued examination. The new system also gives more time for examination, including an emphasis on early communication between examiners and applicants. The Washington Post recently reported that the examiner's union (POPA) recently voted to approve the changes to the count system. This is encouraging progress in breaking with the previous PTO's leadership stance equating higher quality with higher rejection rates and changing the patent office culture from fear of allowing patents to encouraging quick identification and allowance of patentable claims.

Federal Circuit Bar Association Model Patent Jury Instructions

The Federal Circuit Bar Association (“FCBA”) has recently released their latest draft of model patent jury instructions and is asking for comments. Comments may be sent by email to juryinstructions@fedcirbar.org. The FCBA announcement can be found here.

Director Kappos to patent examiners: Higher rejection rates does not equal higher quality

Professor Dennis Crouch of Patently O has reported that new USPTO Director Kappos sent an email to patent examiners rejecting the past leadership's attitude that higher rejections rates in recent years was a sign of increased patent quality. As discussed in a previous post, the USPTO needs a dramatic change in institutional culture and attitude if it is to restore its damaged relationship with the patent community and meaningfully address problems such as application backlog and declining revenues. The trend for several years has been for rejections to be more arbitrary and subjective, in part due to recent court decisions, but Director Kappos' message may be a sign that improvement is coming. They say "the proof of the pudding is in the eating." In the this case, the proof that the Examiners are listening will be if and when the examiner's corp improves the quality of its examination.

New PTO Director Must Change the Agency’s Culture

David Kappos’ biggest challenge as the new Director of the United States Patent and Trademark Office may be to change what has been called a “culture of fear” among patent examiners into a “culture of cooperation” with the patent community.

Supreme Court to Review Scope of Patentable Subject Matter

The U.S. Supreme Court agreed to review the en banc decision of the Court of Appeals for the Federal Circuit in In re Bilski (545 F.3d 943). In that decision, the Federal Circuit rejected its previous “useful, concrete and tangible result” test for patentable subject matter articulated in State Street (149 F.3d 1368). Finding that test inadequate or inappropriate, the court articulated two tests for patentability that are commonly referred to as the “machine-or-transformation” test. Under the new test, a claimed process is patentable if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”