Patent Docs

New Website Creates Place to Examine the Examiners

    By Donald Zuhn --

USPTO Examiners, a website that bills itself as a place to "examine the examiners," recently opened its (virtual) doors for business.  While the site's creator (or creators) have yet to be identified, the same may no longer be true for some examiners at the U.S. Patent and Trademark Office.  According to the site's "About Us" page, USPTO Examiners was created so that patent practitioners and inventors would have a place where they could review, rank, and investigate USPTO examiners.  The site encourages practitioners and inventors who have interacted with an examiner to report on their experiences with that examiner, including their opinions about the examiner's knowledge of the law and technology and the examiner's accessibility.  The website contends that the website's "online collaborative environment" will eventually prove to be a valuable resource in crafting prosecution strategy for particular applications.  As of Thursday evening, two comments (one good and one bad) had been posted regarding two different examiners (one allegedly good and one allegedly "downright cruel").

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House Subcommittee Holds USPTO Oversight Hearing

    By Donald Zuhn --

On Wednesday, the House Subcommittee on Courts, the Internet, and Intellectual Property held an oversight hearing on the U.S. Patent and Trademark Office.  The Subcommittee heard statements from Jon Dudas, the Undersecretary of Commerce for Intellectual Property and Director of U.S. Patent and Trademark Office; Robin Nazzaro, the Director of National Resources and Environment for the U.S. General Accountability Office; Robert Budens, the President of the Patent Office Professional Association (POPA); and Alan Kasper, the First Vice President of the American Intellectual Property Law Association (AIPLA) and a partner with Sughrue, Mion, PLLC.  Copies of each witness' statement can be found at the following links: Mr. Dudas' statement, Ms. Nazzaro's statement, Mr. Budens' statement, and Mr. Kasper's statement.  Over the next week, Patent Docs will be reporting on the testimony that was provided to the Subcommittee by each of the above witnesses; today, we begin with Director Dudas' statement.

With respect to patent initiatives, Director Dudas (at left) divided his discussion into three parts:  human capital initiatives (i.e., those affecting the examining corps), administrative and regulatory initiatives, and legislative initiatives.  The Director's testimony also touched on trademark initiatives and the Patent Office's attempts to strengthen IP rights protection and enforcement worldwide.  Before addressing the patent initiatives, the Director noted that the Office had examined more than 362,000 patent applications in 2007, its largest number ever, and had maintained an examination compliance rate of 96.5% for the second year in a row (the examination compliance rate is the percentage of allowed applications that the Office determined had been allowed without examination error).  The Director also noted that the patent allowance rate for 2007 was 44%, which constituted a drop of more than 26 points from the allowance rate eight years earlier.

On the topic of human capital initiatives, Director Dudas discussed the Office's efforts to hire more examiners (the PTO hired 1,215 new examiners in FY 2007 and plans to hire 1,200 more in FY 2008); the Office's telework programs (the PTO plans to add 500 more examiners to the hoteling program in FY 2008); examiner pay; examiner attrition (the PTO's 8.5% attrition rate is lower than the 11.2% rate for all federal workers, and interestingly, the attrition rate for examiners with less than three years of experience is almost four times higher than that for examiners with over three years of experience, i.e., 15.5% versus 3.95%); examiner training, certification, and recertification; and the Office's review of the examination process (applicant and practitioner input in FY 2007 indicated that final rejection practice, Request for Continued Examination (RCE) practice, search quality, and restriction practice are in need of review).

Addressing the subject of administrative and regulatory initiatives, Director Dudas stated that the Office "believes that improvements in patent quality are dependent, to a significant degree, on providing examiners access to more and better-focused information relevant to their decision making," and thus had "promulgated and proposed, and will develop and propose, regulations and administrative changes governing submission and examination of patent applications that will enable our examiners to make more efficient and informed patentability determinations."  The Director then discussed a number of these regulations and administrative changes, including accelerated examination, the peer review pilot program, the new Markush rules package, the new Information Disclosure Statement (IDS) rules package, electronic filing and processing improvements (electronic filing of patent applications rose from 2% in FY 2006 to 49.3% in FY 2007), pre-appeal conferences, pre-first Office action and first action examiner interviews, and work-sharing programs with foreign patent offices.

Noting that "'multi-invention alternative' claims are especially prevalent in the pharmaceutical, chemical, and biotechnology fields," Director Dudas contended that the new Markush rules package "would permit the examiner to focus examination to a single invention [and] encourage applicants to identify, with more specificity, the claimed invention to be examined, thus promoting examination quality."  In defending the new IDS rules package, the Director was quick to indict the practices of applicants and practitioners, stating that:

The USPTO has observed that applicants sometimes provide information in a way that hinders, rather than helps, timely and accurate examination.  For example, some applicants send a very large number of documents to the examiner, without identifying why they have been submitted, thus tending to obscure the most relevant information.  Additionally, some applicants send very long documents without pointing out what part of the document makes it relevant to the claimed invention.  Sometimes applicants delay sending key information to the examiner.  These practices make it extremely difficult for the patent examiner to find and properly consider the most relevant information in the limited time available for examination of an application.

To those who might criticize the new IDS rules package, the Director explained that under the proposed rules, applicants could still submit as many documents as they choose or very long documents, provided that they satisfied "more stringent requirements" for doing so.  The Director concluded his discussion of the Office's administrative initiatives by noting that the PTO was "looking at a wide variety of alternative examination procedures including those that can be implemented under existing authorities as well as those requiring statutory changes."

With respect to legislative initiatives, Director Dudas discussed patent reform provisions concerning Applicant Quality Submissions (AQS), public quality submissions, and post-grant review.  The Director reiterated that the Office "fully endorses the proposed AQS legislative language in the Senate bill, which is consistent with language originally recommended by the Office," explaining that patent applicants have "the most knowledge, the most opportunity, and the most to gain by providing the USPTO with the best possible information" about their inventions.  Offsetting (somewhat) his earlier criticism of applicant and practitioner practices with respect to the submission of references, the Director conceded that "[p]olicymakers would also need to consider how the current doctrine of inequitable conduct may discourage applicants from fully and fairly sharing relevant information with the USPTO," and noted that the Office was working with Congress on language that "would encourage applicants to share more information with the Office."  On the topic of post-grant review, the Director stated that the PTO supported a first window of 12 months within which any person could seek to cancel as unpatentable any claim of a patent, and a second window of 6 months after a petitioner receives notice from a patent holder alleging infringement and is able to show substantial economic impact.

As It Turns Out, It Doesn't Have to Be a Rose to Smell as Sweet

    By Kevin E. Noonan --

Insidious (adj.): operating or proceeding in an inconspicuous or seemingly harmless way but actually with grave effect.

On Saturday, The New York Times published an article analogizing two industries most readers would not have thought to be similar:  the perfume industry and innovator pharmaceutical companies (see "Ahh, the Seductive Fragrance of Molecules under Patent").  But the similarities are manifold, and upon reflection are not that surprising.

Like the pharmaceutical industry, perfumeries are constantly in need of new molecules, not to treat diseases of course but to provide the source material for new fragrances.  For example, the article cites Kate Greene, vice president for marketing at Swiss scent maker Givaudan, as saying the company makes more than 2,000 new scent molecules every year, but develops only 3 or 4 of them as commercial products.  Development costs are high:  although Givaudan has annual profits of 2.9 billion Swiss francs, it also invests almost 400 million francs in research each year and employs more than 50 scientists in these efforts.  Similar efforts are reported in the article for Japanese scent company Takasago International Corporation; Symrise of Holzminden, Germany; and International Flavors and Fragrances of New York, who collectively spend "billions" in research.

The return on investment is high, with individual scents (used as components for popular perfumes and other fragrances) so dear, their producers decline to specify their cost (other than saying they were "not cheap).  These new scent molecules provide the raw material for the up to 600 new fragrances introduced each year.  They also have advantages over naturally-occurring scents, such as lacking allergenicity present in natural products such as rose ketones, the amount of which is restricted due to their propensity to provoke allergic reactions.  Other advantages include the capacity to cling to fabrics, to be used in scented laundry products and soaps, while at the same time being more potent so that less scent must be used (and less water used to wash the scent away).

Importantly, there are also ecological advantages:  for example, the article cites the price of natural sandalwood as reaching $1,700 per kilogram, due to severe over-foresting of Indian sandalwood that forced the Indian government to ban further harvesting.  Additionally, using synthetic rather than naturally-occurring scents avoids the ancillary economic and ecological costs of fertilizers, soil erosion, and diverting cropland to non-agricultural uses.

Some of the most expensive of the scents, described as "captives" in the industry, are those that are under patent, the most potent analogy made by the article to the pharmaceutical industry.  In addition to the analogies noted above to the high development costs and low probability of success, the article also notes the importance of toxicology and the effects of the scope of available patent protection in different countries (while getting the current extent of U.S. patent term wrong, citing a figure not used for the past thirteen years).

But the analogies to patenting and its importance to the industry are where an otherwise informative article goes a little wrong.  Maybe it's because the Times published it, or maybe it's the title ("Ahh, the Seductive Fragrance of Molecules under Patent") (something that could be the product of a copy editor well aware of the Times patent animus).  Whatever the reason, rather than being enlightening, the patent angle seems gratuitous.  The antiparallels to pharmaceuticals are never mentioned:  the much higher regulatory costs and barriers for drugs, the factors other than toxicity that can make even fewer potential drug leads suitable for commercialization, and of course the unstated difference between "luxury" items like perfumes and life-saving drugs.  And the overall effect is insidious:  another Times article where patents are not described as helping companies protect hard-earned investment but rather just make things cost too much.  The unspoken assumptions have substantive consequences:  in discussing Takasago's patent strategy for it synthetic must product, l-muscone (the company patented the synthetic methods rather than the scent itself), the effect, that these methods will be dedicated to the public when Takasago's patents expire goes unmentioned.  It seems a shame that such important considerations are left to innuendo or discussed obliquely, even by the Times.  You might even say it stinks.

Dr. Robert Shapiro Discusses Follow-on Biologics Report

    By Donald Zuhn --

Last week, we reported on a campaign being initiated by Insmed Inc. to raise public awareness regarding the importance of establishing a regulatory pathway in the U.S. for follow-on biologics.  As part of the campaign, Insmed commissioned a study by economist Dr. Robert J. Shapiro (at right) to determine the cost benefits to patients and healthcare providers from the establishment of a follow-on biologics market in the U.S.  Earlier today, Dr. Shapiro held a conference call with a handful of biotech and pharma bloggers to provide a briefing on his report, entitled "The Potential American Market for Generic Biological Treatments and the Associated Cost Savings."

Dr. Shapiro, who served as Under Secretary of Commerce in the Clinton Administration and who is the current chairman of Sonecon, LLC, a private firm advising U.S. and foreign businesses, governments, and non-profit organizations, concludes in his report that "generic versions of the top 12 categories of biologic treatments with patent protections that have expired or that are due to expire in the near future could save Americans $67 billion to $108 billion over 10 years and $236 billion to $378 billion over 20 years."  During the conference call, Dr. Shapiro reiterated that the cost savings to patients and health care providers from a European-style follow-on biologics regulatory pathway would be "very, very large."

While acknowledging that Congress could craft a regulatory pathway that places many barriers in the way of the biogenerics, he did not think Congress would do so in view of the healthcare financing burdens it was facing.  Moreover, in order for the cost savings detailed in Dr. Shapiro's report to be realized, it was imperative that Congress create an "expedited" pathway in which biogeneric companies would not be required to conduct full clinical trials, but rather would only have to show that a follow-on biologic meets the standard of "profound" or "effective similarity" with respect to the corresponding brand name biologic.  According to Dr. Shapiro, if biogenerics were required to perform full clinical trials, fewer biogenerics would attempt to enter the market, and the reduced competition would result in far less cost savings.  However, with a fairly expedited regulatory pathway in place, Dr. Shapiro predicted cost savings of at least 35%, if not more.

Dr. Shapiro dismissed a conclusion reached by other researchers that the barriers to entering the biologics market would be large for biogenerics, since biologics are much more expensive to manufacture than small molecule therapeutics.  Instead, Dr. Shapiro contended that the barriers would actually be smaller than others predict since biogenerics have alternatives to erecting costly biologics manufacturing facilities, including outsourcing to foreign producers, partnering with European biogenerics, or using now idle U.S. plants.  However, when reminded about the problems Chinese companies have been having in providing safe chemicals, Dr. Shapiro conceded that "whatever the price savings are, they're not enough if the [foreign-produced] product is not safe."

Although Dr. Shapiro recognized that data exclusivity was an "important issue" and noted that he had written about this issue in the past, he stated that he did not take any data exclusivity provisions into consideration in preparing his report.  Interestingly, when asked to identify the largest obstacle that Congress would face in creating a regulatory pathway for follow-on biologics, Dr. Shapiro responded that it would be designing a pathway that establishes both the safety and effectiveness of follow-on biologics, and not selecting an acceptable data exclusivity period.  Nevertheless, Dr. Shapiro was confident that Congress would be able to overcome the "fairly unique challenges" that creating a follow-on biologics -- as opposed to small molecule -- regulatory pathway presented.

For additional information on this and other related topics, please see

• "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation - Part II," February 14, 2008
• "Insmed Announces National Awareness Campaign Regarding Follow-on Biologics," February 13, 2008
• "Millennium Pharmaceuticals Spent $1.28 Million on Lobbying in 2007," February 8, 2008
• "Biologics Legislation Faces Unresolved Issues," December 28, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Biotechs Facing New Challenges," August 13, 2007
• "Three New Biosimilars Pass EMEA Test," July 26, 2007
• "European Medicines Agency Releases Paper on Biosmiliar Medicines," July 23, 2007
• "Senate Committee Passes Biologics Legislation," July 5, 2007

Top Stories of 2007: #5 to #1

    By Donald Zuhn --

Yesterday, we counted down stories #10 to #6 of the top stories covered at Patent Docs in 2007, and on Sunday, we listed stories #11 to #15.  Today, we conclude the series by counting down the top five stories.  In case you missed the articles the first time around or wish to go back and review them at your convenience, links to our coverage of these stories (as well as a few links to articles on related topics) have been provided.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with our ranking, please let us know.

#5 - USPTO Issues Obviousness Guidelines

It took the U.S. Patent and Trademark Office only three days following the Supreme Court's decision in KSR International Co. v. Teleflex Inc. to issue a "statement" regarding the decision (in the form of a memo from Margaret Focarino, Deputy Commissioner for Patent Operations, to PTO Technology Center Directors) and less than six months for the Office to issue full guidelines for making obviousness determinations.  As with the utility examination guidelines promulgated in January 2001, however, it will take some time for patent practitioners to discover the extent to which the new obviousness guidelines will impact patent prosecution.  For information regarding this topic, please see:

• "DNA Non-obviousness under Ex parte Kubin (It Gets Worse)," October 18, 2007
• "Patent Office Issues Examination Guidelines Regarding Obviousness after KSR," October 10, 2007
• "Patent Office Sends KSR Training Guidelines to OMB," July 25, 2007
• "Tidbits from the USPTO: KSR and More," May 14, 2007
• "The Patent Office Reacts to KSR: A First Look," May 3, 2007

#4 - Supreme Court Issues Decision in KSR Case

If the Patent Office's issuance of new obviousness guidelines takes the fifth spot on our list of top stories, it makes sense that the Supreme Court decision prompting the new guidelines would grab one of the top four spots.  The Supreme Court's decision in KSR International Co. v. Teleflex Inc. on April 30, 2007 was easily one of the most eagerly awaited patent law-related decisions in recent memory.  In reversing the Federal Circuit's determination of validity, the Supreme Court dealt a blow to the CAFC's "teaching, suggestion, or motivation" (TSM) test for analyzing obviousness by rejecting a "rigid" application of the TSM test.  Not unexpectedly, the Supreme Court pointed to its 1966 decision in Graham v. John Deere Co. as providing the proper analytical framework.  For information regarding this and other related topics, please see:

• "IPLAC Panel Discussion of KSR v. Teleflex," May 18, 2007
• "Trying to Understand What's Not Obvious about What's 'Obvious to Try,'" May 16, 2007
• "Like a Penny Saved for a Rainy Day (Albeit, Unintentionally): The Renewed Relevance of 35 U.S.C. § 103(b)," May 13, 2007
• "BIO's Reaction to KSR v. Teleflex," May 8, 2007
• "Implications of the Supreme Court's KSR v. Teleflex Decision for Biotechnology," May 4, 2007
• "KSR Int'l Co. v. Teleflex Inc. (2007)," April 30, 2007
• "The Federal Circuit Backpedals on Obviousness," March 27, 2007

#3 - USPTO Promulgates New Continuation and Claims Rules

What could knock an important patent law-related Supreme Court decision out of our top three?  How about the most substantial revision to the patent rules that patent practitioners have seen in quite some time?  By now, patent practitioners are certainly well acquainted with the new continuation and claims rules and the impact these rules could have (if allowed to go into force by the Court or Congress) on the number of continuation applications, RCEs, and claims an applicant could file.  However, it is yet to be determined whether any (and if so, which) of the new rules will survive a recent court challenge.  For information regarding this and other related topics, please see:

• "A Call to Arms," October 22, 2007
• "Will Compliance with the New Rules Be Enforced by the Patent Office through the Office of Enrollment and Discipline?" October 17, 2007
• "USPTO News Briefs," October 18, 2007
• "PTO 'Flagging' Pending Applications that Exceed 5/25 Claim Limits," October 17, 2007
• "'Impact' of New Continuation and Claims Rules," October 8, 2007
• "Is the Patent Office Starting to Blink," October 5, 2007
• "Breaking A Very Long Silence," October 1, 2007
• "It Ain't Necessarily So," September 28, 2007
• "Commissioner Doll Addresses ACI Biotech Patents Conference," September 26, 2007
• "NAPP Opposes New Continuation and Claims Rules," September 7, 2007
• "Patent Office Provides Recorded Web-Based Discussion of New Rules," August 30, 2007
• "New PTO Continuation Rules: Unfair to Biotech?" August 29, 2007
• "Proposed Agenda for September 12, 2007 Biotechnology/ Chemical/Pharmaceutical Art Group Meeting," August 24, 2007
• "The 'Word' on the New Continuation Rules (from the USPTO Webcast) - Part II," August 24, 2007
• "The 'Word' on the New Continuation Rules (from the USPTO Webcast) - Part I," August 23, 2007
• "New Continuation and Claims Rules Published," August 22, 2007
• "More on M.P.E.P. § 710.06," August 20, 2007
• "Patent Office to Hold Webcast on New Claim and Continuation Rules on August 23, 2007," August 20, 2007
• "Patent Office Announces that New Continuation and Claims Rules Will Be Published . . . Tomorrow," August 20, 2007
• "Procuring Patent Protection from the Present USPTO," August 15, 2007
• "New Continuation and Claims Rules to Be Published in Late Summer," July 25, 2007
• "Lies, Damn Lies, and Statistics," July 10, 2007
• "They Just Don't Get It - 'Patent Reform' at the USPTO," April 11, 2007

#2 - USPTO "Clarifies" New Continuation and Claims Rules

We placed this story ahead of the publication of the new continuation and claims rules because it suggests that the Patent Office perhaps did not gauge the impact of the new rules as carefully as it would have liked us to believe.  No "clarification" provides a better example of this than the one that finally laid to rest the "divisional dilemma" we discussed here.  When a simple question about the impact of filing a Demand in an International application stumps the Commissioner of Patents, that should be a hint that the new continuation and claims rules require a little more work.  For information regarding this topic, please see:

• "Changes to New Rules to Be Published in Early November," October 11, 2007
• "USPTO Issues Notice to "Clarify" Certain Provisions of the New Rules," October 10, 2007

#1 - District Court Enjoins New Continuation and Claims Rules

Topping our list of top stories for 2007 is the court challenge to the new continuation and claims rules brought initially by Dr. Triantafyllos Tafas, which was then consolidated with the action filed by GlaxoSmithKline.  On Halloween, the Eastern District of Virginia granted a preliminary injunction in the consolidated actions, preventing the USPTO from implementing the new rules.  This case is likely to crack the top five again in 2008, however, since the Court will be determining whether to permanently enjoin the new rules in February.  For information regarding this and other related topics, please see:

• "New Briefing Deadline Set In PTO Rules Case," December 18, 2007
• "Court Sets Summary Judgment Schedule in New Rules Case," December 3, 2007
• "No Discovery in New Rules Case," November 27, 2007
• "Tafas v. Dudas; SmithKline Beecham Corp. v. Dudas (E.D. Va. 2007)," October 31, 2007
• "USPTO Late to Its Own Party," October 31, 2007
• "GSK Secures Injunction," October 31, 2007 (includes links to Court's Order and Opinion)
• "Senator Schumer Sends a Signal," October 30, 2007
• "GSK TRO/Preliminary Injunction Hearing," October 29, 2007
• "AIPLA Supports GSK's Lawsuit Against the Patent Office's New Rules," October 25, 2007
• "GSK Brings Out the Big Guns Opposing the New Continuation and Claims Rules," October 24, 2007
• "Hooray! - (Finally) the Big Dogs Have Joined the Hunt," October 11, 2007
• "Rules Challenger Amends Complaint and Withdraws PI Motion," September 11, 2007
• "Inventor Sues PTO to Prevent New Continuation and Claims Rules from Taking Effect," August 30, 2007

Top Stories of 2007: #10 to #6

    By Donald Zuhn --

Yesterday, we counted down the first third of the top fifteen stories that were covered on Patent Docs in 2007 (see "Top Stories of 2007: #15 to #11").  Today, we count down stories #10 to #6, and tomorrow, we will count down the top five stories.  In case you missed the articles the first time around or wish to go back and review them at your convenience, we have also provided links to our coverage of these stories (as well as a few links to articles on related topics).  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with our ranking, please let us know.

#10 - Drug Pricing and Compulsory Drug Licensing in the Developing World

Developing countries have begun to deal with the high price of patented drugs by using -- or threatening to use -- tools provided by international agreements such as GATT, TRIPS, and the Doha Declaration (e.g., compulsory licensing and parallel importing).  However, in 2007, the developing world started to apply these tools to more than just patented anti-AIDS drugs, drawing criticism from and raising the concern of Western drug companies.  For information regarding this and other related topics, please see:

• "Neocolonialism in the Current Global Drug Pricing Regime?" August 19, 2007
• "More on the Global Drug Patenting Crisis," August 14, 2007
• "EU Trade Commissioner Sends Warning Letter to Thailand," August 13, 2007
• "Trying to Find a Solution to the Global Drug Pricing Crisis," July 16, 2007
• "Pharma Sanity Lacks Global Reach," July 13, 2007
• "Brasil Prevails in Dispute with Abbott over AIDS Drug Pricing," July 9, 2007
• "Africa (Still) Depending on the Kindness of Strangers in Anti-AIDS Drug Pricing," May 29, 2007
• "U.S. Trade Policy Becoming Less Pharma-Friendly," May 18, 2007
• "The "Unfairness" of World Intellectual Property Protection According to The New Yorker," May 17, 2007
• "Worldwide Drug Pricing Regime in Chaos," May 9, 2007
• "Not Getting It about Patented Drug Prices at The Wall Street Journal," May 6, 2007
• "A Modest Proposal Regarding Drug Pricing in Developing Countries," May 2, 2007
• "The Law of Unintended Consequences Arises in Applying TRIPS to Patented Drug Protection in Developing Countries," May 1, 2007
• "Abbott Agrees to Offer AIDS Drug at Reduced Price," April 12, 2007
• "No New Abbott Medicines for Thailand," March 14, 2007
• "More Compulsory Licensing in Thailand," February 1, 2007

#9 - Regulation of Foreign Drugs Found to be Lacking

The past year saw reports of the appearance of contaminated excipients obtained from overseas manufacturers in a variety of pharmaceutical products.  In addition, the FDA's role in this story -- through its less than adequate inspection of overseas generic drug manufacturers -- came to light.  For information regarding this topic, please see:

• "The Effect of Foreign Generics on the U.S. Drug Supply - Part III," July 17, 2007
• "The Effect of Foreign Generics on the U.S. Drug Supply - Part II," June 20, 2007
• "The Effect of Foreign Generics on the U.S. Drug Supply - Part I," June 19, 2007

#8 - Senate Passes Biologics Bill

In July, the U.S. Senate Committee on Health, Education, Labor & Pensions passed the Biologics Price Competition and Innovation Act, which would provide an FDA approval pathway for biosimilars (interchangeable biological products) that relies in part on the prior approval of the corresponding brand product.  Congress is expected to take up biologics legislation again in 2008.  For information regarding this and other related topics, please see:

• "Biologics Legislation Faces Unresolved Issues," December 28, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Biotechs Facing New Challenges," August 13, 2007
• "Three New Biosimilars Pass EMEA Test," July 26, 2007
• "European Medicines Agency Releases Paper on Biosmiliar Medicines," July 23, 2007
• "Senate Committee Passes Biologics Legislation," July 5, 2007

#7 - OMB Approves New IDS Rules Despite Criticism

In July 2006, the USPTO published new Information Disclosure Statement (IDS) rules for comment.  Last July, the Patent Office submitted the new IDS rules to the OMB for approval.  Not wanting to see a repeat of what happened with the new continuation and claims rules, two groups sent letters to the OMB taking the Office to task for its "analysis" regarding the effects of the new IDS rules on applicants.  Earlier this month, the OMB announced -- despite harsh criticism and evidence to the contrary -- that there would be no significant economic impact from the new IDS rules.  While the Patent Office has indicated that the new IDS rules will take effect in early 2008, the Office has not indicated to what extent the new IDS rules have changed since they were first published (even the new continuation and claims rules were modified between initial publication and promulgation).  Considering the comprehensive analysis provided in the two letters sent to the OMB, the Patent Office could soon be facing another court challenge of a new rules package.  For information regarding this topic, please see:

• "The OMB Isn't Listening, Either", December 11, 2007
• "More on Second Letter to OMB Criticizing the IDS Rule," October 24, 2007
• "OMB Receives Second Letter Criticizing Proposed IDS Rule," October 23, 2007
• "Cantor Fitzgerald VP Criticizes IDS Rule in Letter to OMB," October 18, 2007

#6 - Congress Working on Patent Reform

In September, the House of Representatives passed its own version of patent reform legislation.  Senator Patrick Leahy, the Chairman of the Senate Judiciary Committee, recently indicated that the Senate's own patent reform bill would continue to be refined and that the Senate would act on the bill "as early as the floor schedule permits" in 2008.  Thus, patent reform will continue to be a major story in the coming year.  For information regarding this and other related topics, please see:

• "Patent Reform Discussed on Senate Floor," December 21, 2007
• "Enjoined New Rules and Patent Reform Finally Appearing on Biotech Industry's Radar," December 20, 2007
• "Chinese IP Judge Discusses Implications of U.S. Patent Reform Bill and Two Congressmen Heed Warning," December 17, 2007
• "IPO President Seeks Deletion of Patent Reform Provision," December 12, 2007
• "Senate May Act on Patent 'Reform' Bill in the New Year," December 2, 2007
• "The Wall Street Journal Gets It Half Right," November 5, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Patent 'Reform' Bill Passes House of Representatives," September 9, 2007
• "Reversal in Microsoft Case Weakens Patent Reform Argument," August 7, 2007
• "San Francisco Chronicle Opines on Patent Reform," August 6, 2007
• "Patent Reform Bill to Be Delayed?" June 12, 2007
• "Senate Judiciary Committee Holds Hearing on Patent Reform," June 10, 2007
• "Could Creating a U.S. 'Utility Model' Patent Fulfill the 'Need' for Patent Law Reform?" May 21, 2007

Top Stories of 2007: #15 to #11

    By Donald Zuhn --

It is natural at this time of year to reflect upon the events of the past twelve months in the hope that such a review might provide some indication of what to expect in the coming year.  In order to help focus on possible developments in biotech and pharma patent law in 2008, over the next three days, we will count down the top fifteen stories that we covered at Patent Docs in 2007.  In addition, we will provide links to our coverage of these stories (as well as a few links to articles on related topics) in case you missed the articles the first time around or wish to go back and have another look during the New Year's holiday.  Today, we count down stories #15 to #11.  Tomorrow, we will count down stories #10 to #6, and on New Year's Day, we will count down the top five stories.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with our ranking, please let us know.

#15 - Genentech's Avastin®/Lucentis® Controversy

Genentech makes two drugs that can be used to treat neovascular or "wet" age-related macular degeneration (AMD):  Avastin®, which costs $20-60 per dose, and Lucentis®, which costs $2,000 per dose.  Unfortunately, the use of Avastin® to treat AMD is an off-label use.  In the fall, Genentech actively tried to prevent such off-label use, relenting (somewhat) only days ago.  For information regarding this topic, please see:

• "Compromise Resolves Avastin® Dispute," December 26, 2007
• "Genentech Beset with Avastin® Woes," December 6, 2007
• "Age-related Macular Degeneration Patients Get a (Limited) Reprieve," November 7, 2007
• "Genentech Acts to Halt Off-label Use of Avastin® for Age-related Macular Degeneration," October 21, 2007
• "Genentech CEO Defends Differential Cost for Avastin®/Lucentis® Treatment of Macular Degeneration," June 6, 2007
• "Retinal Specialist on the Avastin®/Lucentis® Controversy," February 23, 2007
• "Lower Doses of Genentech's Avastin® Effective in Treating Lung Cancer," February 23, 2007

#14 - Venter Tries to Create First Synthetic Organism

In an attempt to identify a minimal gene set for the purpose of creating the first synthetic organism, a group of researchers led by Dr. J. Craig Venter has been working to define a core set of essential genes in the Mycoplasma genitalium genome.  For information regarding this and other related topics, please see:

• "Playing the Bioterror Card in the Synthetic Biology Debate," December 19, 2007
• "The Synthetic Biology Sky Is Not Falling," December 16, 2007
• "Patenting Life (Part II)," June 29, 2007
• "Patenting Life (Really)," June 11, 2007

#13 - WARF Stem Cell Patents under Re-examination

Stem cell patents owned by the Wisconsin Alumni Research Foundation (WARF), which have been involved in re-examination proceedings in the U.S. Patent and Trademark Office, have come under attack from a number of groups that may have "hidden" motives for trying to knock out these patents.  For information regarding this and other related topics, please see:

• "It's Time to Stop the Hypocrisy over Stem Cell Patents - Part III," July 4, 2007
• "WARF Responds to the Patent Office on Its Re-examined Stem Cell Patents," June 26, 2007
• "The Potential Usefulness of Adult Stem Cells Reaffirmed," June 25, 2007
• "Can Fibroblasts Solve The Problems with Human Embryonic Stem Cells?" June 15, 2007
• "Massachusetts to Invest $1 Billion on Medical and Science Research," May 10, 2007
• "It's Time to Stop the Hypocrisy over Stem Cell Patents - Part II," April 26, 2007
• "It's Time to Stop the Hypocrisy over Stem Cell Patents - Part I," April 17, 2007
• "WARF Stem Cell Patent Claims Rejected in Re-examination," April 3, 2007
• "NIH Chief Dissents on Federal Stem Cell Funding Ban," March 20, 2007
• "Stem Cells a Go! in California," February 28, 2007
• "Limitations on the Usefulness of Adult Stem Cells," February, 28, 2007

#12 - Gene Patenting Debate

Following a year-long attack on gene patents by a number of individuals and groups, the House Subcommittee on Courts, the Internet and Intellectual Property held a hearing entitled "Stifling or Stimulating - The Role of Gene Patents in Research and Genetic Testing."  Will this hearing result in a bill to eliminate gene patents?  We will have to wait until 2008 to see.  For information regarding this and other related topics, please see:

• "House Subcommittee Schedules DNA Patenting Hearing," October 26, 2007
• "The Continuing Threat to Human Gene Patenting," October 16, 2007
• "The Anti-Patent Beat Goes on at The New York Times," July 1, 2007
• "The Future of DNA Patenting," February 20, 2007
• "A DNA Patenting Thought Experiment," February 16, 2007
• "Science Fiction in The New York Times," February 13, 2007
• "The Continuing Value of Biotech Patenting," February 4, 2007
• "Anti-Patent (Sullivan?) Malice by The New York Times," January 29, 2007

#11 - District Court Dismisses Suit Challenging USPTO Deputy Director's Appointment

If the Patent Office had to win something, most patent practitioners would probably agree to let the Office have this suit.  Nevertheless, the appointment of Margaret Peterlin, a former Capitol Hill staffer having no "professional background and experience in patent or trademark law," did nothing to lessen the outcry of the Office's critics.  For information regarding this topic, please see:

• "Margaret Peterlin Gets to Keep Her Job," December 10, 2007

Happy Holidays from Patent Docs

The authors and contributors of Patent Docs wish their readers a Happy Holidays.  Publication of Patent Docs will resume on December 26th.

Senate May Act on Patent "Reform" Bill in the New Year

    By Kevin E. Noonan --

Breda Lund, writing in the November 28th edition of The Generic Line, reports that the Senate may consider its version of the patent "reform" bill, S. 1145, during the next session of the 110th Congress when it convenes next January.  According to Ms. Lund, Matthew Sandgren, counsel to Senator Orrin Hatch (R-Utah), spoke on the likelihood of Senate consideration at the Center for Business Intelligence (CBI) "Forum on Effective Patent, Intellectual Property and Trademark Strategies" earlier this month.

Ranking members of both parties, including Senator Hatch and Senator Patrick Leahy (D-Vt.) are "intent" on bringing the bill to a vote, Mr. Sandgren (at left) said.  Although the bill has been successfully voted out of the Judiciary Committee, it will not come to the floor for a vote until several "outstanding issues" have been addressed.  These include post-grant review, inequitable conduct, changes in how damages are calculated, elimination of the "best mode" requirement, and granting the U.S. Patent and Trademark Office substantive rulemaking authority (lack of the power to be granted by the latter provision is one basis for Judge Cacheris' injunction imposed on October 31st blocking implementation of the "new rules" concerning continuations and claim limits promulgated by the Office on August 21st; see Patent Docs report).  Each of these provisions is also a part of the corresponding bill already passed by the House (H.R. 1908) (see "Patent 'Reform' Bill Passes House of Representatives").

There are several differences between the House and Senate bills.  For example, the Senate bill grants a "second window" of post-grant review, while the House version does not.  The House bill eliminates "best mode" while the Senate version does not, and there are differences, and disagreements, between how the House and Senate bills change apportionment of damages.  Mr. Sandgren asserts that Senator Hatch is "the champion on inequitable conduct reform," and that differences between the House and Senate versions of the bill with regard to inequitable conduct must be resolved.

Most heartening to patent applicants is the prediction by Mr. Sandgren that the provisions expanding the Office's substantive rulemaking powers will likely be removed from the final version of the bill.  If true, Office management will have one less avenue for imposing its misguided "new rules" in whatever form they may take after Judge Cacheris makes his final determination.  And removal of these provisions will make it more difficult (if not impossible) for the Office to prevail, either before Judge Cacheris or the Federal Circuit, with its argument that it has such substantive rulemaking authority already.

A useful comparison between the House and Senate bills can be found at the Intellectual Property Owners Association (IPO) website.

For additional information on this topic, please see:

• "The Wall Street Journal Gets It Half Right," November 5, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Patent 'Reform' Bill Passes House of Representatives," September 9, 2007
• "San Francisco Chronicle Opines on Patent Reform," August 6, 2007
• "Patent Reform Bill to Be Delayed?" June 12, 2007
• "Senate Judiciary Committee Holds Hearing on Patent Reform," June 10, 2007

Happy Thanksgiving from Patent Docs

The authors and contributors of Patent Docs wish their readers a Happy Thanksgiving.  Publication of Patent Docs will resume on November 25th.

Patent Docs Celebrates One Year of Operation

One year ago today, the authors listed on the sidebar to the left -- Donald Zuhn, Kevin Noonan, Jason Derry, Chris Singer, and Sherri Oslick -- began publishing Patent Docs, a weblog focusing on recent developments in biotech and pharma patent law.  Chris Singer penned the first new Patent Docs article, which discussed the electronic submission of Sequence Listings via the EFS-Web.

In the year since our first new post, we have published over 600 more articles covering changes in Patent Office rules and procedures affecting biotech and pharma patent prosecution, summarizing court decisions impacting biotech and pharma patent litigation and prosecution, reporting on biotech and pharma news, and highlighting newly issued biotech and pharma patents.  Over the past year, Patent Docs has provided in-depth coverage of the new continuation and claims rules and the GSK case, the KSR decision and the Patent Office's response to KSR, proposals for improving the U.S. patent system, patent reform, the gene patenting and stem cell debates, biologics legislation and biosimilars, and compulsory drug licensing.  We have also reported on every biotech or pharma patent lawsuit filed in the past year.

We would like to thank Dennis Crouch of Patently-O for all of his help in getting this project off the ground.  We would also like to thank Mark Chael, Rob Dailey, Baltazar Gomez, Kwame Mensah, Suresh Pillai, and Brad Crawford for their contributions.  More importantly, however, we would like to thank all of you for reading Patent Docs, as well as everyone who has taken the time to submit comments and those who have subscribed to the Patent Docs e-mail newsletter (if you haven't yet subscribed, you can do so by entering your e-mail address in the box to the left).  We enjoy hearing from readers, so if there's anything you want to tell us or if there's a topic or issue that you think we should be writing about, please feel free to contact us at: PatentDocs@gmail.com.

"Impact" of New Continuation and Claims Rules

Patent Docs received an e-mail today that contained some interesting information about the impact the new continuation and claims rules might have had if only the Patent Office had promulgated the new rules a "little earlier."  We were unable to identify the author online, so if you know who originally penned these two paragraphs, please let us know [UPDATE: We have been informed that the authors of this piece are Gregory E. Upchurch of LegalMetric, LLC and Bryan K. Wheelock of Harness, Dickey & Pierce, PLC; Additional UPDATE: We just received a copy of LegalMetric's e-mail, which can be obtained here].  In addition, due to the number and age of the patents described in the piece, we were unable to confirm the accuracy of the figures presented [UPDATE: A table of the authors' analysis is available for download at the LegalMetric's webpage or here].

As most of you know the new Patent Office rules will take effect November 1st.  Before the new rules, one New Jersey inventor amassed 394 patents with more than 5 independent claims, 21 of which had more than 25 total claims.  This will be prohibited by new 37 CFR 1.75(b)(1).  Furthermore, this same inventor slid by without filing any of the 7,326 separate statements about co-pending applications that will now be required by 37 CFR 1.78(f)(1)(i), or any of the 243 terminal disclaimers under 37 CFR 1.78(f)(2)(ii)(A) or explanations under 37 CFR 1.78(f)(2)(ii)(B) for the applications filed on the same day with the exact same title.  This inventor obtained more than three patents with identical titles 67 times - once obtaining 37 different patents with the exact same title, with a total of 188 claims.  286 times he obtained patents with the same titles with more than 15 total independent claims, and 53 times he obtained patents with the same titles with more than 75 total claims, which would now be nearly impossible under 37 CFR 1.75(b)(1).

THANK GOODNESS that the Patent Office has put a stop to the likes of Thomas Alva Edison.  What would become of us if we had more like him?

These figures don't include applications Edison filed that did not issue, or the rejected claims in the patents that did issue.  Even with a lot more work, Edison probably could not have obtained equivalent protection.  Because he violated the 5/25 rule on at least 394 occasions, he would have had to file and prosecute at least that many more applications.  He also would have had to file 7,326 statements under 1.78(f)(1), as many as 72 on a single day, and 243 terminal disclaimers under 37 CFR 1.78(f)(2)(ii)(A) or explanations under 37 CFR 1.78(f)(2)(ii)(B).  He doubtless would have lost at least some of his protection in the 67 instances where he had four or more patents with the same title, and in the 286 patents in patent families where the total number of independent claims exceeded 15, and in the 53 patents in patent families where the total number of claims exceeded 75.  Destroying the incentive to invent such trifles as the electric lamp, the stock ticker, the phonograph, movies is a small price to pay for the convenience of the Patent and Trademark Office.

Undoubtedly the Patent and Trademark Office will now remove the 2,108 references on its web site to Edison, now that it has identified him as a serial patent abuser.

For a copy of the spreadsheet from which these figures were obtained, go to www.legalmetric.com and click on Edison Patent Spreadsheet under Resources.

The True Tragedy of the Anti-Commons

    By Kevin E. Noonan --

The term "the tragedy of the anti-commons" assumed a cache of avant-garde radicalism since its coining by Heller and Eisenberg in 1998.  That cache was less alluring the more the listener knew of either patent law or academic science practices, but it certainly attracted "progressive" pundits and policymakers and supported the idea that the U.S. patent system was somehow "broken."

There has been precious little evidence for any tragedy, as evidenced by a report in Nature Biotechnology last year (see "The 'Anti-Commons' Aren't So Tragic, After All").  More recently, Ronald Bailey of Reason magazine posted an article updating the evidentiary status of the tragedy (see "The Tragedy of the Anticommons: Do Patents Actually Impede Innovation?").  And as Patent Docs reported last year, there isn't much of a tragedy after all.  Mr. Bailey cites the Nature Biotechnology report, as well as other studies by the National Academy of Science.  In a 2003 study, the Academy found that drug discovery had not been "substantially impeded" by patent proliferation in the area (see "Effects of Research Tool Patents and Licensing on Biomedical Innovation").  Moreover, the report found little evidence that use of research tools had been negatively affected.  A more recent Academy study found that the number of projects abandoned or delayed was "extremely small" (see "Reaping the Benefits of Genomic and Proteomic Research: Intellectual Property Rights, Innovation, and Public Health").  Indeed, the more common reasons for project abandonment or delay included "lack of funding, conflict with other priorities, a judgment that the project was not feasible, not scientifically important, or not that interesting, and the perception that the field was too crowded with competing investigators," i.e., the traditional concerns of the academic scientist (not the unrealistically altruistic scientific shaman conjured by those trying to use such a chimera to support their efforts to restrict patenting).

This year, a report by the Association for the Advancement of Science (AAAS), entitled "International Intellectual Property Experiences: A Report of Four Countries" provided a survey of the experiences of thousands of scientists in the U.S., Europe (Germany and the U.K.), and Japan with regard to "acquiring, using, or creating" intellectual property.  Again, little evidence of anticommons tragedies were reported, and according to Stephen Hansen, the director of the AAAS study, "[a]ll four studies suggest that intellectual property rights had little negative impact on the practice of science."

Researchers into the anticommons tragedy are catching on.  As Mr. Bailey reports, "[i]t is interesting that we rarely, if ever, hear from the researchers themselves about these issues.  The issues have been brought to public attention instead by academic lawyers, sociologists and economists," noted Hansen.  What has happened is that a handful of cases - including Myriad Genetics BRCA1/BRCA2 breast cancer diagnostic test and the Cavanan lawsuit brought by Chicago attorney Lori Andrews - have been used extensively in the popular press to create a false impression that the anticommons problem is systemic and widespread, when in fact it is not.  Mr. Bailey's report notes that the impetus for patent "reform" stems mostly from the information technology sector, as a consequence of the differences in investment costs, obsolescence timing, and "patent thicket" propensities of that industry.  Even in this arena the evidence is that there is no anticommons tragedy, as reported by workers at the London School of Economics (see "Strategic Patenting and Software Innovation").  Citing the study, these authors report that "expansion of patentability over software during the 1980s and early 1990s was not associated with any major changes in R&D investment" by software innovator firms.  This evidence has not prevented other authors, notably Boston University visiting law professor James Bessen and the Federal Reserve Bank of Philadelphia's Robert Hunt, from suggesting that "the over-proliferation of software patents was reducing software research and development and slowing down innovation" (see "An Empirical Look at Software Patents").

Thus, the empirical evidence establishes that there is no tragedy in the IT or biotechnology anticommons.  The real tragedy, of course, is the uncritical acceptance of such theoretical contingencies by politicians and policy-makers.  Perhaps stated more directly, it is the use of the work of these academic theoreticians by anyone with a political agenda to support, regardless of whether there is any evidence that the risk is real.  As Patent Docs noted in reporting on the Nature Biotechnology report a year ago, the principal proponents of the anti-commons theory had no evident experience or expertise in either patent law or academic science.  This should have engendered caution if not open skepticism to their ideas, but instead they were used by novelists, bureaucrats, and pundits to support the notion that the patent system in the U.S. was broken.  As has been evidenced by the recent rule-making activities of the U.S. Patent and Trademark Office, as well as the witness lists of Congressional hearings regarding patent "reform," the one group consistently ignored (except those who sing from the anti-patent hymn book such as Dan Ravicher) are patent attorneys, who at a minimum are conversant with the competing interests and practices as they exist before "reform," and who have a much better understanding of what works and what is "broken" in U.S. patent law and practice.  The evident disdain for patent attorneys exhibited by the Patent Office and others actively working to retract the protections of U.S. patent law suggests the reason for ignoring patent lawyers:  their plans are not supported by the facts, and so those who know the facts cannot be permitted to be heard.  This by itself should be a clarion call for patent attorneys to make themselves heard in this debate, by all means necessary.

BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform

    By Donald Zuhn --

Earlier today, Patent Docs participated in a conference call with Jim Greenwood, the President and CEO of the Biotechnology Industry Organization (BIO).  Mr. Greenwood, who represented Pennsylvania's Eighth District in the U.S. House of Representatives from January 1993 through January 2005 prior to his BIO appointment, had invited a handful of biotech and pharma bloggers to participate in the conference call, where he provided a briefing on the Biologics Price Competition and Innovation Act of 2007 (see "Senate Committee Passes Biologics Legislation"), which the Senate Committee on Health, Education, Labor & Pensions passed on June 27, 2007, and the Patent Reform Act of 2007 (see "Patent "Reform" Bill Passes House of Representatives"), which the House of Representatives passed on September 7, 2007.

On the issue of patent reform, Mr. Greenwood (at left) stated that the House bill was "largely inspired" by the information technology industry, which relies on a business model that is quite different from that of the biotech/pharma sector.  Mr. Greenwood predicted that if the House bill were passed into law, it would be "easier and less costly to infringe patents."  While noting that the bill which the House approved by a 220-175 margin was better than the legislation the House had started out with, Mr. Greenwood believed the House bill was "still bad."  As a result, Mr. Greenwood said that BIO would continue to oppose the House bill and work with the Senate to pass a bill more favorable to the 1,100 biotechnology companies, academic institutions, state biotechnology centers, and related organizations comprising BIO.

With regard to those portions of the House bill that BIO finds to be most problematic, Mr. Greenwood began by criticizing the bill's apportionment of damages provision, which allows a court in an infringement action to calculate a reasonable royalty based on the "economic value attributable to patent's specific contribution over prior art."  When asked if BIO could offer an acceptable middle ground between the current system and the House's apportionment of damages provision, Mr. Greenwood replied that the current system "beats anything we have seen in the legislation."

Mr. Greenwood also found the inequitable conduct and enhanced rulemaking authority provisions of the House bill to be lacking.  With respect to the latter provision, Mr. Greenwood expressed dissatisfaction with the differences between the House and Senate bills (the House bill would retroactively authorize the Patent Office's new continuation and claims rules and the Senate bill would only grant the Office some fee-setting authority).  While acknowledging that USPTO officials may have been "well intentioned" in passing the new continuation and claims rules, Mr. Greenwood believed that such decisions "should be left to Congress, and not to administrators."  Nevertheless, Mr. Greenwood stressed that BIO was "trying to work amicably with the PTO" with respect to the new rules, and observed that a number of BIO-supported changes to the proposed continuation and claims rules had made their way into the final rule.  Mr. Greenwood concluded by stating that BIO had not taken a position with respect to any legal challenges to the new rules, such as Dr. Tafas' action (see "Rules Challenger Amends Complaint and Withdraws PI Motion").

Orange Book Blog, which also participated in the conference call, has reported on Mr. Greenwood's comments concerning the Biologics Price Competition and Innovation Act of 2007.

Patent "Reform" Bill Passes House of Representatives

    By Kevin E. Noonan --

On Friday, the U.S. House of Representatives passed H.R. 1908, a bill intended to "reform" U.S. patent law.  Pushed by special interests (mostly in the IT arena) frustrated by the proliferation of patent rights over the past twenty-five years, the bill would fundamentally change U.S. patent law.  Whether "reform" is needed or not, this bill constitutes more overhaul than reform, and is unlikely to better improve U.S. technology or inventors; sole inventors and universities are the parties most likely to be harmed.

The scope of the bill is sufficiently all-encompassing that a thorough analysis must wait until Patent Docs has had a chance to review it more completely.  However, there are a few highlights (or lowlights) that can be immediately gleaned from a cursory review.  These include:

1.  Section 102 has been replaced by a novelty section providing for a first-to-file system, where a patent filing can more easily be made in the name of the "real party in interest" (i.e., an assignee or someone that the inventor owes a duty to disclose).  First-to-file does not include acts of derivation, where the first to file derives the invention from the true inventor.  The provisions also retain the one-year grace period for disclosure, publication, public use, or sale by the inventor.  Section 103 is changed to specify the effective filing date, rather than the date of invention, for determining obviousness.  Section 104, relating to inventions made abroad, is repealed in its entirety.  These provisions will not be implemented, however, until the President provides an Executive Order finding that Europe and Japan have enacted a one-year grace period for disclosure, public use, or sale of an invention by the inventor or real party in interest.

2.  Interference proceedings are abolished, replaced by actions to show derivation of an invention from the "true" inventor.  A floor amendment to the bill by Congressman Conyers of Michigan preserved the right to an interference for any patent application filed before the effective date of the amendment.

3.  A post-grant opposition proceeding is created, requiring that a petition to cancel claims of a granted patent be filed within one year of the patent grant date.  The Director is also given the power to sua sponte institute a cancellation proceeding.  As with current re-examination practice, the Director's decision to grant or refuse a cancellation proceeding cannot be appealed.  Moreover, a third party who fails to invalidate a patent in a civil action cannot provoke a cancellation proceeding against that patent, and repetitive petitions by the same party against the same patent are also prohibited.  Sanctions are available for abuses of these provisions.  A cancellation proceeding can be initiated on the basis of art that had been cited or considered during prosecution (i.e., eliminating the current reexamination standard that a new question of patentability be supported by the assertion of new art not considered during prosecution).  A floor amendment to the bill by Congressman Conyers of Michigan preserved the right of a patentee to pursue infringement actions despite concurrent cancellation proceedings, and precludes the use of the existence of a cancellation proceeding as evidence of invalidity or unenforceability in any civil action or before the ITC.  These provisions take effect one year after the bill becomes law.

4.  Derivation proceedings, appeals, and cancellation proceedings are to be held before the Patent Trial and Appeal Board, which replaces the Board of Patent Appeals and Interferences.

5.  Available damages (where actual damages are not established) are limited to a reasonable royalty depending on the "economic value properly attributable to the patent's specific contribution over the prior art."  Damages are not to be determined from the "entire market value" of sales of the infringing article, but a court (or jury) can consider the terms of any non-exclusive licensing of the patents.  A patentee can provide evidence of additional value for combination inventions where the components of the combination are in the prior art.

6.  Willful infringement can be found only when the infringer was put on notice in writing by the patentee.  The notice must raise a reasonable apprehension of suit in the accused infringer, and set forth with specificity how the allegedly infringing article infringes each claim of the patent asserted by the patentee.  Frank copying, or persisting in the infringing activity after a court determines infringement, are also grounds for finding willful infringement. Willful infringement cannot be found where the infringer has "an informed good faith belief that the patent was invalid or unenforceable, or would not be infringed by the conduct later shown to constitute infringement of the patent."  Such a belief can be established by an opinion of counsel or behavior directed at avoiding infringement.  Willfulness cannot be plead (and presumably, not expressed to a jury) until after the court finds infringement.

7.  The opportunity for third parties to submit art and other information during ex parte examination is expanded.

8.  The prior inventor defense is expanded to no longer be limited to business method patents.

9.  Methods for avoiding taxes are expressly excluded from patentable subject matter under Section 101.

10.  Venue rules are made more limited, requiring venue to be where the defendant is incorporated or has its principle place of business, or has committed "a substantial portion of the acts of infringement" and has "an established physical facility."

11.  Interlocutory appeals regarding claim construction are created, at the discretion of the trial court but not the Federal Circuit.

12.  The provisions of the bill also authorize the Patent and Trademark Office to require information from applicants including search reports and other information relating to patentability searches.  These requirements do not apply to "microentities," which encompass traditional small entities but do not include parties named on more than 5 patents or applications, or that have more than 2.5 times the median household taxable income.

13.  Inequitable conduct is defined by statute and requires findings of materiality and intent, but the provisions of this section do not immunize applicants or their attorneys from liability attendant to filing search reports or patentability reports.

14.  The bill also authorizes retroactively the actions recently taken by the Patent Office with regard to the continuation rules by expanding the Director's rulemaking authority under Section 2. However, a floor amendment by Mr. Issa of California provided for a stay of any such regulations for 60 days to permit Congress time to disapprove such regulations.

15.  Violation of the best mode requirement is no longer grounds for invalidating a patent.

The vote in the House was 220-175, with Democrats voting 160-58 and Republicans voting 60-117.  There are significant differences with the Senate version of the bill, which may come to a vote in the next few weeks.  The Bush administration opposes certain provisions of the House version as well, and the political considerations make it unlikely that the bill as passed in the House will be the final version of any bill signed into law by the President.  Those considerations are but cold comfort to those who view many of these provisions with disapproval or despair, since they appear to significantly decrease the advantages U.S. patent law has provided for over a generation, to solve alleged problems many believe exist only for certain special interest groups.

Patent Docs will provide a more detailed analysis of the rules over the next several days.

Federal Circuit to Change URL

    By Sherri Oslick --

Set your bookmarks; the CAFC will be changing its web site address to conform to the naming convention used by the other U.S. appellate courts.  Effective October 1, 2007, the CAFC web site will be available at www.cafc.uscourts.gov.  In order to assist with the transition, the old web site address (www.fedcir.gov) will remain active through the end of this year.

In addition to publishing newly issued opinions and opinions from the last few years, the CAFC website provides a number of valuable resources, including The Federal Circuit Rules of Practice, helpful "Top Ten" lists and guides for practicing in front of the CAFC; audio recordings of oral arguments; CAFC case statistics; and a set of FAQs.

Reversal in Microsoft Case Weakens Patent Reform Argument

    By Donald Zuhn --

As we reported yesterday, the San Francisco Chronicle waded into the patent reform debate over the weekend, appearing to have aligned itself with the "laptop" (or tech) group over the "pill bottle" (or biotech/pharma) group.  In making a case for the tech firms' position that patent reform is "badly needed," the newspaper's editorial observed that "[i]n a much-mentioned case, Microsoft was hit with a $1.5 billion penalty when it violated a relatively small patent used in its MP3 software."  However, on Monday, a District Court judge in the Southern District of California put a dent in the Chronicle's argument by vacating the jury's record-setting patent infringement award (see Reuters report).

San Francisco Chronicle Opines on Patent Reform

    By Donald Zuhn --

In an editorial appearing in Sunday's edition of the San Francisco Chronicle, the Bay area newspaper appears to have, perhaps not surprisingly, taken sides with tech companies on the issue of patent reform.  In an editorial entitled "The laptop vs. the pill bottle," the Chronicle acknowledges the ongoing battle between biotech/pharma companies and tech firms over an "obscure, but crucial" area of the law that the newspaper contends hasn't undergone major revision since the 1950's (dismissing or simply forgetting about significant revisions to U.S. patent law that took effect in 1995 and 2000).  However, despite labeling the battle between these two groups "a neighborhood quarrel," the Chronicle seems to find favor with the tech firms' argument that current U.S. patent law has created "a legal battleground where scattershot court decisions and murky rules are hindering innovation and clogging courts," and therefore, ultimately calls for "badly needed" changes.  With respect to the Patent Office's role in improving the system, the editorial concludes, without offering much support, that "[a]ll sides in the debate acknowledge that applications should be harder to win, thus cutting down on later conflicts."

For additional information on this topic, please see:

• "Senate Judiciary Committee Holds Hearing on Patent Reform," June 10