Standard for Granting an Inter Partes Reexamination Request

The USPTO announced new rules governing the provisions of the America Invents Act ("AIA") relating to inter partes reexamination that went into effect on September 16, 2011.

Inter partes reexamination requests submitted:

• Prior to September 16, 2011:  The SNQ standard is applicable in determining whether the request for inter partes reexamination will be granted. If reexamination is ordered based on the SNQ standard, then the SNQ standard will apply throughout the reexamination proceeding.

• On or after September 16,2011,  but before September 16, 2012:  The "reasonable likelihood" standard is applicable in determining whether the request for inter partes reexamination will be granted. If  reexamination is ordered based on the "reasonable likelihood" standard, then this standard will apply throughout the reexamination proceeding.

• On or after September 16, 2012:  The Office cannot grant, or even accord a filing date to, the request, because the inter partes reexamination provisions of  35 U.S.C. chapter 31 are not available for any request for inter partes reexamination submitted on or after September 16, 2012.  The Office will only accept petitions to conduct inter partes review.  (*** The Office will implement the new inter partes review proceedings in a separate rule making.)

As you can see, the Office will no longer apply the "substantial new question of patentability" ("SNQ") standard to inter partes reexaminations filed after September 16, 2011.  (The SNQ standard for granting ex parte reexamination has not been revised by the AIA.)  Instead, the Office will apply the "reasonable likelihood" standard, requiring the information presented in a request for inter partes reexamination to show that there is a "reasonable likelihood" that the requester will prevail with respect to at least one of the claims challenged in the request.

With respect to the "reasonable likelihood" standard, House Rep. 112-98 (Part 1), at 47, 112th Cong., 1st Sess., provides, in connection with inter partes review, the following:

The threshold for initiating an inter partes review is elevated from "significant new question of patentability" --a standard that currently allows 95% of  all requests to be granted--to a standard requiring petitioners to present information showing that their challenge has a reasonable likelihood of success.

(emphasis added.)

So, what is the "reasonable likelihood" standard?  

A statement pointing out, based on the cited patents and printed publications, each showing of  a reasonable likelihood that the requester will prevail with respect to at least one of the claims challenged in the request, and a detailed explanation of the pertinency and manner of applying the patents and printed publications to every claim for which reexamination is requested.

Section 1.915(b)(3)

Thoughts:

• It is almost impossible to predict - at this stage - the effect of going away from the SNQ test.  However, based on the "elevated" language in the Congressional record, it appears that the new standard may result in a lower percentage of requests being granted.

• Unlike an inter partes review, an inter partes reexamination cannot be terminated by settlement between the parties.  Plus, following an inter partes review, the petitioner will be estopped (in a later civil, PTO, or ITC proceeding), from challenging the patent on any ground that was raised or "reasonably could have been raised" during the proceeding.  Whereas, following an inter partes reexamination, the petitioner is only estopped from challenging the patent on any ground that was raised or "could have been raised."  These procedural issues should be taken into consideration - as we approach September 2012 - when deciding whether to request an inter partes reexamination or wait to request inter partes review.

America Invents Act - Post-Issuance Proceedings

Ex Parte Reexam

Use:  Anyone can challenge based on patents or printed pubs.
Availability:  September 16, 2011
Timing Req:  Anytime after a patent issues
Threshold:  Substantial New Question of Patentability ("SNQ")
Decision Maker:  Examiners in Central Reexam Unit ("CRU")

Inter Partes Reexam

Use:  Third-Party can challenge based on patents or printed pubs.
Availability:  September 16, 2011 - September 15, 2012
Timing Req:  Anytime for any patent filed after November 29, 1999
Threshold:  A reasonable likelihood to prevail ("RLP") with respect to at least one claim
Decision Maker:  Examiners in CRU

Inter Partes Review

Use:  Third-Party can challenge based on patents or printed pubs.
Availability:  September 16, 2012 (*** this proceeding available for all pending patents)
Timing Req:  (1)  Filed 9-months after the grant of patent or reissue, or after termination of a post grant review, whichever is later.  (2)  Filed within 1-year after service of Complaint.  (3) Not available if DJ is filed.
Threshold:  RLP with respect to at least one claim
Decision Maker:  Patent Trial & Appeals Board ("PTAB")

Post-Grant Review ("PGR")

Use:  Third-Party can challenge based on broad grounds (*** not just patents and printed pubs)

Availability:  Patents with an effective filing date on/after March 16, 2013.

Timing Req:  Must file within 9-months of the issue date of a patent or reissue patent (only if broadening)

Threshold:  "More likely than not" that a claim is unpatentable

Decision Maker:  PTAB

Supplemental Review

Use:  Patent owner can address inequitable conduct issue proactively

Availability:  September 16, 2012

Timing Req:  Anytime after patent issues; however, not available when in litigation if inequitable conduct is asserted with particularity

Threshold:  SNQ

Decision Maker:  Examiners in CRU

Transitional PGR for business method patents

Use:  Third-Party can challenge based on patents or printed pubs.

Availability:  September 16, 2012 - September 15, 2020

Threshold: "More likely than not" that a claim is unpatentable

Decision Maker:  PTAB

America Invents Act

Patent Reform – Changes that take effect immediately


Effective DateS

September 15, 2011

The U.S. Senate last week passed the House version of the Leahy-Smith America Invents Act (H.R. 1249) (“Act”).  The Act will become law once signed by President Obama.    

The Act will significantly change the American patent system.  Some of the more highly publicized provisions will not take effect for 12 to 18 months after signing.  These provisions include moving from the current “first to invent” system to a “first to file” system and additional mechanisms for post issuance review.   With the “first to file” provision, priority will be given to the first inventor to file a patent application, which will bring U.S. law into harmony with the patent laws of most other countries around the world.  The additional mechanisms for post issuance review  – post grant review, inter partes review, and supplemental examination – create new administrative procedures for challenging or amending a patent after issuance and are intended to reduce litigation.

Certain important provisions will be effective immediately or soon after signing, including:

USPTO PROCEDURES:

Surprise - PTO Fees on the rise.  The Act imposes a 15% surcharge on most PTO fees.  The Act includes a financial incentive to electronically file patent applications.  Applicants not filing electronically will be charged an additional $400 fee (effective 60 days from signing).

Higher Threshold for Inter Partes Reexamination.  The Act imposes a higher threshold for requesting inter partes reexamination.  In order to be granted, the requester will be required to show a reasonable likelihood that the requester will prevail with respect to at least one claim (current law requires a showing of substantial new question of patentability with respect to at least one claim).  This is an interim provision (to be replaced by inter partes review) and will be effective until the implementation of the new administrative post grant review procedures, scheduled to become effective 12 months from signing.  Plus, you can now request an inter partes reexamination for pre-1999 patent.

Limitation on Issuance of Patents.  The Act prohibits a patent claim directed to or encompassing a human organism.  This will apply to all pending applications, not issued patents.

LITIGATION:

Shorter List of Defendants.  The Act limits joinder of unrelated accused infringers in actions commenced on and after signing.  Joinder will be prohibited if solely based on allegations that a defendant has infringed a patent.  The Act also will limit the ability to join together parties in a patent infringement litigation, if the parties only have tenuous connections to the underlying dispute in the litigation.  The most obvious impact of this limitation will be on multi-defendant actions brought by non-practicing entities (NPE's).

Goodbye "Best Mode" Defense.  The Act eliminates failure to disclose best mode as a basis for adjudging a patent invalid or unenforceable.  This provision will only apply to lawsuits filed on or after the signing.

Hello "Infringement Based on Prior Commercial Use" Defense.  The Act expands the prior use defense under § 273 to include all patents, whereas it is currently only available for business method patents.  However, the defense cannot be asserted against universities or technology-transfer companies.

Big Changes Re: False Marking.  The Act amends § 292 to effectively eliminate all pending and future false marking lawsuits.  First, the Act provides that only those plaintiffs who have suffered “competitive” injury as a result of the false marking have standing to sue for compensatory damages.  Second, only the United States government has standing to sue for the fine of “not more than $500 for every such offense.”  Third, no civil or criminal liability arises if one marks a product with an expired patent number, provided that the expired patent actually covered the product. 

Getting with the times - Virtual Marking.  The Act amends § 287 to allow for virtual marking if the word “patent” or “pat.” is marked on a product, along with a reference to an internet website that the public can access free of charge to learn more about the specific patent. 

Venue.  Appeals of decisions issued by the U.S. Patent & Trademark Office (e.g., suspensions of attorneys or agents to practice before the PTO, actions to obtain a patent, derivation proceedings, etc.) will be heard by the U.S. District Court for the Eastern District of Virginia instead of the U.S. District Court for the District of Columbia.

EIT Holdings Goes After LinkedIn ... AGAIN.

We reported last December that EIT Holdings, LLC ("EIT") sued several Web 2.0 companies, including Yelp! and LinkedIn for infringing the seemingly broadest claims (40 and 41) of US Pat. No. 5,828,837.  The lawsuit was derailed earlier this month when Judge Alsup (N.D. Cal) dismissed the case against all defendants except the first named defendant and invited EIT to refile against each Defendant in a separate action.  EIT accepted the  invitation and refiled separate complaints against each of the defendants, including the one that made a lot of people rich last week, LinkedIn.

Our analysis of claims 40 and 41 remains the same as discussed in our earlier report.  However, in addition to the difficulties raised by the "user report" limitation,  EIT may have other problems.  Here's a comment from one of our readers:

[T]he weakness in claim 40 is the use of means-plus-function elements.
Since those steps are performed by a computer, the spec must describe an *algorithm* for each of the functions, under Aristocrat/WMS Gaming. 

For example, take just one of the elements of claim 40:  means for registering a first-time user of the computer network;
The spec must describe *how* to register the user.  A restatement of the function will not do. Nor will a single step in a flow chart labeled "register".  You need some *details* about how the registering is performed. The argument that a POSITA understands how to perform the registering will not do.  I took a brief look at the spec, and didn't see anything that looks like an algorithm for registering. 

Plus, there are *11* means-plus-function elements. All 11 must have an algorithm in the spec.

To date, it appears that a reexamination request has not been filed against the '837 patent.  However, this might change depending on the results of the Article One Partners  hunt.  Check it out.  I guess that we'll just have to wait and see.

Don’t Upset the Apple Cart …

Apple Inc. ("Apple") sued Samsung Electronics Co. ("Samsung") on April 15, 2011 in U.S. District Court for the Northern District of California alleging that Samsung's line of smart phones and tablet computers (referred to as "Galaxy products") copy Apple's iPhone, iPod touch, and iPad line of products as well as product packaging.  (Interestingly, Apple was Samsung’s second-largest client in 2010 after Japan’s Sony Corp, accounting for four percent of the South Korean firm’s 155 trillion won ($142 billion) annual revenues.)

The lawsuit makes wide-ranging charges against Samsung which puts the industry on notice not to copy Apple's “look and feel.”  Apple alleges that everything from the product shape and the icons on the screen of the Galaxy products …

to the way the Galaxy products are packaged infringe Apple's trade dress and trademarks.

Of significance to Apple’s “look and feel” claims is that both companies prominently display their respective trademarks on their products - "Samsung" house mark (on the front) and Apple's logo (on the back.)  In 2007, the Third Circuit held (Splenda® case) that the prominent presence of another well-known word or design mark may cause enough difference in the overall commercial impressions to weigh similarity in the defendant’s favor.  McNeil Nutritionals, LLC v. Heartland Sweateners, LLC, 511 F.3d 350 (3d Cir. 2007) (In this case, both packages had a number of similar elements, including the orientation, overall yellow background color, blue lettering, and photographs of uses for the sweetener, but the defendant’s package prominently displayed the Food Lion name, therefore no infringement was found.)  Samsung will likely rely on this reasoning in its defense.  Apple may counter that the addition of a trade name does not necessarily alleviate the problem of confusion of marks, and indeed, can aggravate it, as a purchaser could well think Apple had licensed Samsung as a second user.  It will help if Apple can prove that Samsung has a history of cross-branding its products with other well-known consumer electronic companies (e.g., Apple, Sony, or LG.)

To establish trade dress infringement, Apple must prove that the allegedly infringing design is (1) non-functional, (2) inherently distinctive (or has acquired secondary meaning), and (3) consumers are likely to confuse the source of Samsung’s product with that of Apple.  Samsung will likely argue (probably early on in the case) that the features that Apple is trying to protect are primarily functional, e.g., rectangular shape is easier to grasp than other shapes, rounded corners are easier to grasp than sharp corners, black screen is easier on the eye than a white screen, etc.   Even if Apple overcomes the functionality attack, it still must prove that there is a likelihood of confusion.  Samsung will likely make some of the following arguments.  One, similar to the Splenda® case, the accused products have the name "Samsung" prominently displayed on front; therefore, it is unlikely consumers would rely on the potentially distinctive configuration of the products to identify the source.  Likewise, the name "Samsung" is prominently displayed on the product packaging; therefore, it is unlikely consumers would rely on the potentially distinctive packaging configuration to identify the source. Two, a new smart phone or tablet purchasing experience is a major decision for most consumers – leading them to thoroughly check out the Galaxy products and comparison shop before spending hundreds of dollars and signing a long-term contract.  The law recognizes that the attention given by purchasers increases with the cost of an item, so more care is given to higher priced items, which may lead to a lower likelihood of confusion.  For example, in the Splenda® case, the Third Circuit found that the consumer’s degree of care in making purchasing decisions was greater than normal because a lot of consumers purchase/choose artificial sweeteners for health reasons, which lessens the likelihood of confusion because consumers would likely pay greater attention to product packaging.  However, Apple can strengthen its case by submitting evidence of “actual confusion” (e.g., misdirected inquiries related to sales or support) which is often considered the most persuasive evidence of likelihood of confusion because it is a good indicator of future confusion.  Accordingly, although the overall product shape and packaging of the Galaxy products may closely resemble Apple's trade dress, Apple may have a hard time actually proving that consumers are likely to be confused as to the source of the Galaxy products.

Similarly, to establish trademark infringement, Apple must at least demonstrate that an appreciable number of ordinarily prudent consumers of the type of product in question are likely to be confused as to the source of the Samsung’s device.  On its face, Apple’s claim appears fairly strong because the Apple trademarks are well-known and some of the application icons on the Galaxy products closely resemble Apple's registered trademarks on several iOS system icons.  However, Samsung will likely argue that the icons are not likely to lead consumers to believe that Apple made or is associated with its products.  One, the icons are not consistently available and visible to the consumer. They are only visible when the product is turned on.  Even then, the icons are typically not available when the consumer navigates applications.  Two, many of the icons are different enough that the consumer will likely not be confused, e.g., phone icon, speech bubble icon, and gears icon.  Three, the "Samsung" house mark is prominently displayed above the icons.  As is standard, this claim will likely turn on which party presents more compelling survey evidence regarding whether the icons are likely to lead consumers to believe that Apple made or is associated with the Galaxy products.

There is enough gray area regarding functionality and actual/likelihood of confusion that both sides are going to have their work cut out for them.  At this point, however, it seems that Samsung may be in a slightly better position.

REEXAMINATION REQUEST - GET IT RIGHT THE FIRST TIME!

I've reviewed many requests for reexamination filed over the past few years and found that a large number were not granted in the first action because of one deficiency or another.  Getting it right the first time is important to all requesters ... especially start-ups that might be tight on capital.

So, to help avoid such a result (e.g., notice from the PTO that your request is incomplete, or even, that your request is denied), I've prepared a couple of checklists.  The first includes a set of requirements under the PTO rules.  The second identifies some practical suggestions for improving the likelihood that your initial request will be granted.

Checklist I - PTO Requirements

37 CFR §1.510 (“Rule 510”)

1)  Point out each substantial new question of patentability (“SNPQ”) based on prior patents and printed publications.  (An SNPQ can be based on a reference that was already considered during prosecution of the application ... so do not disregard these references!

2)  Identify every claim for which reexamination is requested, and provide a detailed explanation of the pertinency and manner of applying the cited prior art to every claim for which reexamination is requested.  (If you don't identify the claim, then don't be surprised if the Examiner doesn't address it!)  If appropriate the party requesting reexamination may also point out how claims distinguish over cited prior art.

3)  Include a copy of every patent or printed publication relied upon or referred to above (first two bullet points) accompanied by an English language translation of all the necessary and pertinent parts of any non-English language patent or printed publication.

4)  Include a copy of the entire patent (in double column format) for which reexamination is requested, and a copy of any disclaimer, certificate of correction, or reexamination certificate issued in the patent. All copies must have each page plainly written on only one side of a sheet of paper.

5)  Provide a certification that a copy of the request filed by a person other than the patent owner has been served in its entirety on the patent owner at the address provided for in Rule 1.33(c).  The name and address of the party must be indicated.

37 CFR §1.915 (“Rule 915“)  - the following apply to inter partes requests:

6)  Certify that the estoppel provisions of 1.907 do not prohibit the inter partes reexamination.

7)  Identify the real party in interest for an inter partes reexamination request.  Such identification is not needed for ex parte requests.

Checklist II - Practical Suggestions

1)  Include a table of contents identifying sections complying with the Rules and each of the arguments

2)  As a preliminary matter, compare the primary references in the request to the primary reference from the original prosecution of the patent.  This will emphasize that the new art (or the art viewed in a new way) is different than the original art, i.e., not cumulative.

3)  Point to KSR Int’l Co. v. Teleflex Inc., 127 S. Ct. 1727 (2007), but describe previously submitted prior art in “a new light” from a technical point of view (especially when the prosecution history reveals that the applicant overcame an obviousness rejection using the old teaching-suggestion-motivation (“TSM”) analysis.)

4)  Limit the cited prior art to relevant references so that the patentee can’t later argue that certain references are not relevant to the case because the PTO did not rely on them.  In other words, do not identify hundreds of cumulative references when the likelihood is that the PTO is not going to rely on them.

5)  Apply the prior art references, one at a time, to each claim.  For example, explain that claim 1 is made obvious by Reference A in view of Reference B and that claim 1 is made obvious by Reference A in view of Reference C.  Do not explain that claim 1 is made obvious by Reference A in view of Reference B or C.

6)  Reduce the burden on the PTO by providing a detailed claim chart (similar to an invalidity chart used in litigation) that compares, limitation by limitation, each claim for which reexamination is requested with the relevant teachings of each reference cited in the request.

7)  Quote the pertinent teachings of the cited references, referencing each quote by page, column and line number and any relevant figure numbers.  However, do NOT lump together the proposed rejections.

8)  If the meaning of the prior art is in any way unclear, include a demonstrative and/or attach a declaration by an expert in the technology explaining the disclosure and its applicability to the patent claims.  The demonstrative and/or declaration should be consistent with the requestor’s claim construction and infringement/validity positions in any pending or anticipated litigation.

I hope that this helps.  Drop a comment or send me an email if you have any follow-up questions or suggestions.  Good luck!

Reference Numerals in Claims Have No Effect on Claim Scope ... Really?

There is a preference in the European Patent Office (“EPO”) that elements identified in the claims “be followed by reference signs relating to these features and placed between parentheses.”  Rule 29(7).  To reduce costs and streamline prosecution, an applicant filing an application in the EPO and PTO may decide to file the identical set of claims to both patent offices.

The good news is that the Manual of Patent Examining Procedures (“MPEP”) states that the use of reference characters in the claims corresponding to elements recited in the specification and drawings is to have no effect on the scope of the claim(s).   

Reference characters corresponding to elements recited in the detailed description and the drawings may be used in conjunction with the recitation of the same element or group of elements in the claims. The reference characters, however, should be enclosed within parentheses so as to avoid confusion with other numbers or characters which may appear in the claims. The use of reference characters is to be considered as having no effect on the scope of the claims.

MPEP 608.01(m) (emphasis added.)

Unfortunately, the issue hasn't come up much in litigation (e.g., claims are construed differently in the courts and the PTO.)  However, the emphasized language in MPEP 608.01(m) was cited in Hochstein v. Microsoft Corp., 2009 U.S. Dist. LEXIS 128544:

While elements L1 and L2 are the specific "communication couplers" parenthetically cross-referenced in claim 39, that optional use of reference characters in the claims has "no effect on the scope of the claims:"

(emphasis added.)

Although the MPEP and the Hochstein decision support the proposition that adding reference numerals to claims has no effect on the scope of the claims at the PTO – I think that doing so might have a negative effect on the scope of the claims.  For example, the reference numeral may quietly serve to guide the judge (deciding claim construction) from a claim limitation (e.g., fastener) to a single structure (e.g., screw) described in the specification and then construe the term (e.g., fastener) as that single structure (e.g., screw), instead of giving it a broader construction (e.g., screw, nail, adhesive, pin, etc.),

I’d like to hear your thoughts on whether applicants should remove reference numerals from claims prosecuted at the PTO.