« Fair Value | Main | On the Verizon »

October 25, 2007

Battle Stations

Reports flow in of siege at the USPTO fortress over examination limits. Casualties have already occurred: the twin angels of human relationships, Equity & Comity, appear seriously wounded. The large caliber catapult known as IBM has rolled into position, lobbing projectiles at the fortress. Now we hear that a defector is whispering dissent, that the cause may not be just, aghast at the thought of innocent lives, infant inventions strangled as they lie in their cradles.

Hal Wegner reports:

Astonishingly, an upper level PTO management member has broken ranks to distribute an article by the European reporter, Joff Wild, as excerpted below, that speaks for itself.

Joff Wild, IAM Magazine (October 20, 2007):

"I have been coming to Washington DC for AIPLA meetings since the mid-1990s and I do not think I have ever known an atmosphere like it. It¹s not just the shrug your shoulders, here we go again, kind of reaction to a new USPTO rule or guideline that you normally get. Instead, patent practitioners are angry, they are frustrated and they are perplexed [by the new "Continuation Rules" effective November 1, 2007]. …

Practitioners believe that these changes will have a major and damaging impact on many applicants' ability to obtain patent protection, especially those operating in areas such as the life sciences. Not only will the whole process become much more expensive, it will also be much more difficult. As a consequence, they say, it will affect company market values particularly of early stages businesses looking to secure funding or seeking merger with larger concerns. What is worse, critics say, is that there is a retrospective element to the rules in that they will apply to all pending applications. The practitioners I have spoken to believe that the changes have been made by a USPTO that has refused to listen to their concerns because it is hell bent on cutting the backlog and pendency times whatever it takes. ……

[P]ractitioners will find a way to live with them - they will have no other choice. This is, no doubt, what the USPTO expects to happen. Indeed, some in the office say in private that they believe the rules will very soon be turned into an opportunity by firms, which will develop specific continuations expertise that can be sold at a premium to clients. Of course, whether this is desirable or not is another matter entirely.

Only time will tell whether Dudas and the senior USPTO staff members that advise him have made the right call here. If they have, then they will have freed examiners up to spend more time looking at other types of patent application. This will not only improve quality, but will also mean most applicants securing protection more quickly a double whammy, as we say in the UK, that will be welcomed by all stakeholders in the US patent system. On the other hand, if they are wrong and applicants who genuinely want protection are put off from seeking it, then the implications could be very serious indeed. Companies may feel less inclined to invest in R&D - with all the damage that could do to the US economy; or they may turn to trade secret protection - so reducing the spread of knowledge the patent system is designed to facilitate. It is on such decisions, I suppose, that political careers are won or lost.

But whatever happens, it seems to me that the relationship between the USPTO and practitioners is profoundly unhealthy at the moment. That cannot be good for anyone who is interested in the future of the US patent system. There is real venom sometimes even contempt in the language I have been hearing from members of the US patent bar over the past few days when they speak about the office. It is actually quite shocking. Fences need mending and they need mending fast.

Gene Quinn reports:

The American Intellectual Property Lawyers Association (AIPLA) earlier today filed a motion for leave to file an amicus brief, which was granted by District Court Judge James C. Cacheris. It appears as if simultaneously with filing the motion for leave to file the AIPLA filed its amicus brief in support of GlaxoSmithKline's challenge to the Patent Office rules on claims and continuations that are to go into effect on November 1, 2007. Judge Cacheris granted the AIPLA motion to file an amicus and also accepted the filing of the brief without need to refile.

Of particular importance is that not only did the AIPLA step up to the plate, but so did several giants of U.S. industry. The leading user of the U.S. patent system, IBM, has come out and said that:

The expenses IBM incurs in responding to the retroactivity requirements of the new rules will divert resources that otherwise would be direct to the protection of the new IBM intellectual property. This diversion will result in irreparable loss to IBM of intellectual property rights.

So how did IBM step up to the plate? David J. Kappos, the Vice President and Assistant General Counsel for Intellectual Property Law at IBM filed a declaration in support of the AIPLA amicus brief and "on behalf of IBM." As already seen in part, the Kappos declaration focuses on the enormous burden IBM will be under if the new rules are enacted because of the need to identify related cases. Specifically, Kappos says:

Due to the retroactivity requirements imposed by the new USPTO continuation and claims rules published August 21, 2007, IBM will be required to review its entire portfolio of over 25, 000 pending U.S. patent applications filed before November 1, 2007 (the effective date of the new USPTO rules) to identify each of its pending patnet applications which, even by chance, has a common inventor and the same filing date (or claims the same benefit or priority date) as another pending IBM U.S. patent application or issued patent, since IBM must identify all such "related cases to the USPTO under new USPTO Rule 78(f)(1).

IBM was not the only corporation stepping up to the plate either. ScanDisk Corporation also seems to be supporting the challenge, although not as directly as IBM. Attorneys Joseph F. Hetz, a shareholder at Brinks Hoffer Gilson & Lione, also filed a declaration in support of the AIPLA amicus, as did attorney Burt Magen, a partner at the law firm of Vierra Magen Marcus & DeNiro LLP. Both the Hetz declaration and the Magen declaration (also a PLI faculty member) discussed ScanDisk throughout their declaration, but do not appear to have officially filed the declarations on behalf of the company. Of course, it would be naive to believe ScanDisk, a client of both firms, would be used as an example company throughout the declarations unless they approved. Finally, also filed with the AIPLA submitted the declaration of Samson Helfgott, former head of the General Electric Company International Patent Operation and current Director of Patents at the law firm of Katten Muchin Rosenman, LLP.

Posted by Patent Hawk at October 25, 2007 1:28 PM | The Patent Office


This reminds me of the last Senators game here in DC. We were all waiting to storm the field, pressed against the little retaining fence, but everyone was scared to make their move. Once a few made it past the cops, the game was history (btw, it was a drunk who first made it onto the field after falling over the fence).

Posted by: johng at October 25, 2007 2:21 PM

I think IBM should consider changing their logo. (Nice graphic, Patent Hawk.) Nicely done, Mr. Kappos.

Posted by: NIPRA anonymous at October 25, 2007 2:57 PM

Somebody's gotta' tell these IP SEALS attacking the PTO that there's more than two beachheads here. In addition to the 5/25 and the continuation rules (or more precisely "anti-continuation" rules) there is the Rule 104(a)(1) issue, which is a land mine. If that rule is not also attacked and eventually vaporized by the courts, then the PTO can make all the rule changes they want to simply by amending the MPEP.

Rule 104(a)(1) was amended to say that examination will be complete with respect to statutes, rules and "other requirements" -- the "other requirements" was added and, according to the FR, refers to the MPEP. This raises the MPEP to the status of the patent code and rules.

You can imagine the rejections: "Claims 3-10 are rejected on the grounds that they are not properly grouped pursuant to MPEP 608.01(m)." And wait until Ed 9 of the MPEP changes the 5/25 rule to the 2/10 rule without the need of complying with any rule-making safeguards.

GSK could win the 5/25 and continuation battles and still lose the war.

Posted by: BabelBoy at October 26, 2007 9:23 AM

Nice use of war terms to liven up your post. I'm guessing that this ill-fated change in the USPTO's mode of doing business will no doubt a new class of experts who can sell their skills to the sad little broke inventor who can not longer navigate the process without a see-eye lawyer. I cross-posted on your piece to http://blog.innovators-network.org The Innovators Network is a non-profit dedicated to bringing technology to startups, small businesses, non-profits, venture capitalists and intellectual property experts. Please visit us and help grow our community!

Best wishes for continued success,

Anthony Kuhn
Innovators Network

Posted by: Anthony Kuhn at October 26, 2007 3:14 PM