Star Athletica v. Varsity Brands – Supreme Court Ruling’s Impact

By Michael Small

 

In a recent Supreme Court case regarding the compatibility between clothes and copyright, Star Athletica v. Varsity Brands, the justices ruled in favor of Varsity Brands in a 6-2 decision, holding that the Defendant’s cheerleading uniform designs are protectable under copyright because they were deemed conceptually separable[1] from the uniform.  This decision answered the question brought to them by Star Athletica’s petition,[2] to which they state the following regarding the compatibility of copyright on clothes using the conceptual separability test:

A feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work—either on its own or fixed in some other tangible medium of expression—if it were imagined separately from the useful article into which it is incorporated.[3]

When placed into the context of the cheerleading uniforms, the justices noted that the surface decoration of the cheerleading uniforms are separable and when alone, allows them to appear as a pictorial, graphic, or sculptural work.  When the separated decorations are applied to any other medium, they would be considered a two-dimensional work of art.  Therefore, Varsity’s designs on their cheerleader uniform are protectable under copyright.

The initial case began in 2015 when Varsity Brands sued Star Athletica under copyright infringement of their cheerleader uniform designs, which are registered in the Copyright Office from the drawings and photographs taken of the outfits.  The district court ruled in favor of Star Athletica, agreeing with their argument that copyright could not be applied to the utilitarian nature of the uniform, regardless of how unique the patterns are on the uniform.  Varsity Brands successfully filed for appeal in the Sixth Circuit and the lower court’s decision was reversed.  The Sixth Circuit ruled in favor of Varsity Brands, holding that the design patterns are copyrightable as the photography made the designs into “pictorial, graphic, or sculptural works,”[4] which is protectable under the Copyright Act.  Star filed for a writ of certiorari in 2016, arguing that the Sixth Circuit’s decision “allows roundabout copyrighting of garment designs masquerading as separable decorative features, preventing competition and inviting new copyright claims for all manner of garments … based solely on the arrangement of stripes and color blocks.”[5]  Ultimately Star Athletica’s argument aimed to dismiss Varsity Brand’s copyright hold on their outfits.  The writ was approved and the case ascended to the U.S. Supreme Court.  The final decision was made in March 2017, in which the U.S. Supreme Court ruled in favor of Varsity Brands, thus concluding the issue.

Prior to the U.S. Supreme Court’s ruling, clothing design is not protectable by copyright law because clothes serve a utilitarian purpose and are identified as useful articles;[6] they keep the customer warm, covered, and protected from the elements.  The functionality of clothing outweighed the creative intent of any design added to the garment, and are therefore not applicable for copyright.  This is the same reason why most clothes cannot be protected by utility patents, although design patents and trademarks may apply on a case-by-case basis (e.g., purses and shoes, large logo T-shirts).  This lack of intellectual property (IP) protection meant that new, creative designs for clothes released in businesses such as the fashion industry, are prone to receiving knockoff versions being sold afterwards, often flooding the market with multiple copies of similar, but lower quality goods.  These knockoffs enter the market after or even before the original design is ready for sale, stealing profits from the original designer.

The U.S. Supreme Court’s ruling on this case will likely have a major impact on the fashion industry.  Fashion designers have been given a tool supported by the U.S. Supreme Court that can be used to argue that the conceptual nature of a design in their product can be protected under copyright by using the conceptual separability test.  This logic can give fashion designers an incentive to clamp down on the copycat/knockoff industry that manifested in the fashion industry due to being a copyright-free environment.  This would make it more difficult for copycat/knockoff designers to make and sell products in a market where copyright is enforced, thus returning profits to the original designers.  Although there is no bill that guarantees protection of clothing design, the conceptual separability test approved by the U.S. Supreme Court could be used to help grant designers the copyright protection they want for their works.  If the design concept can be separated from the clothing design and appear as a two-dimensional work, a copyright can be applied to a clothing design.

While the ruling may provide copyright benefits for the fashion industry, not all are in support of the potential impact.  Up until this ruling, the fashion industry maintained itself somewhat efficiently without the protection required from copyright.  In fact, there are arguments that support the lack thereof for copyright, stating that such an implementation would damage innovation for designers.  Previous attempts to make fashion design copyrightable through legislative bills such as the Innovative Design Protection Act (2012) and the Design Piracy Prohibition Act (2007) have been met with opposition from independent fashion designers and businesses alike, making them fail to pass in Congress.  Some argue that it would be impossible to make an original design from scratch because designers learn and become influenced from other creations.  Therefore, copying is essential in fashion design to promote innovation and new takes on fashion under Raustiala and Sprigman’s Piracy Paradox argument.[7]  Others are more concerned that designers would focus more on the risk of copyright litigation rather than making interesting designs, reducing innovation and creativity in the fashion design industry.  In addition, legal costs for fashion designers can rise should they consult with a lawyer regarding fashion design and copyright, which could indirectly lead to a rise in prices of clothes and designs for the consumer overall.  Finally, enforcement of copyright protection may not be a viable option due to the fast-paced nature of fashion design, where the ‘next big thing’ is only from months to less than a year away, as opposed to the length and complexity of filing a copyright litigation and going to court.  With an industry that has adapted to having limited IP protection since the Copyright Act’s implementation, arguments against copyright in the fashion industry center around the problem that its incorporation could severely damage the industry’s economic and creative value now and in the future.

Despite the opposition against implementing copyright into the fashion industry, the U.S. government has shown interest in the past to make such an introduction.  It could be argued that the Star Athletica v. Varsity Brands U.S. Supreme Court ruling is a representation of this interest, giving designers a tool to use should they feel that their design is being infringed.  The effort to include fashion design for copyright protection would also strengthen the U.S.’s global market to attract foreign direct investment, as several countries in Europe have their own copyright laws for fashion design, such as France and Germany.  This is further reinforced by the presence of the European Union (EU), which grants 25 years of design copyright protection for all its 28 member states.  The protection granted by the EU makes it viable for fashion design companies concerned about copycat/knockoff designs to doing business overseas in the EU’s member states than in the U.S.  The outcome of Star Athletica v. Varsity Brands could garner interest from politicians and businesses to try and compile another bill to include fashion as copyrightable, allowing the U.S. to garner interest in some fashion designers that were wary of the previous copyright-free area of clothing design.  At the same time, however, companies that relied on the copyright free environment for designing outfits, such as certain sports teams or other artists, would have to put resources into redesigning the product so that their goods do not infringe on the original copyright.  An introduction of a bill that would enforce an immediate change without a smooth transition could have a drastic effect on the fashion design industry, for better or worse.  The impact of the Star Athletica v. Varsity Brands ruling has yet to be fully measured as the decision was just made and there are not many cases that have tested the U.S. Supreme Court’s conceptual separability test.   It is very likely that a rise of copyright litigations will occur that will test the extent of the copyright protection granted to clothes by the conceptual separability test from both individual fashion designers and businesses.  Once its protection range has been analyzed, it will become easier to analyze the aftermath of the Star Athletica v. Varsity Brands ruling.

[1] “In its statutory form, the separability inquiry asks whether the aesthetic features of a useful article can be identified separately from, and can exist independently.”  See Barton Keyes, Alive and Well: The (Still) Ongoing Debate Surrounding Conceptual Separability in American Copyright Law, Ohio State Law Journal, 69 (109), (2012), http://moritzlaw.osu.edu/students/groups/oslj/files/2012/04/69.1.keyes_.pdf.

[2] “What is the appropriate test to determine when a feature of the design of a useful article is protectable under § 101 of the Copyright Act?”  See Star Athletica, L.L.C., v. Varsity Brands, Inc., Varsity Spirit Corporation, and Varsity Spirit Fashions & Supplies, Inc., On Petition for a Writ of Certiorari to the United States Court of Appeals for the Sixth Circuit, (2016).

[3] See Star Athletica, L.L.C. v. Varsity Brands, Inc., et al., 580 (U. S. Supreme Court, 2017), https://www.supremecourt.gov/opinions/16pdf/15-866_0971.pdf.

[4] See Varsity Brands, Inc. v. Star Athletica, LLC, 799 F.3d 468, 471 (6th Cir. 2015).

[5] See Petition for a Writ of Certiorari at 31, Star Athletica, LLC v. Varsity Brands, Inc. (Jan. 5, 2016) (No. 15-866), http://www.scotusblog.com/wp-content/uploads/2016/05/SACP.pdf.

[6] “A ‘useful article’ is an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information. An article that is normally a part of a useful article is considered a ‘useful article’.”  See 17 U.S.C. § 101.

[7] The Piracy Paradox argument revolves around the idea that the nonstop changing trends of fashion in the fashion industry is made aware of by the consumer, such as not wearing what everyone else is wearing, or the constant demand for new products even after acquiring new products.  This awareness makes copying a viable option that helps drive faster innovation in design, sales, and competition more than enforcing copyright or other forms of IP protection. See Kal Raustiala and Christopher Sprigman, The Piracy Paradox: Innovation and Intellectual Property in Fashion Design., Virginia Law Review, 92, (Nov. 13 2006), p. 1687-1777.

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Trader Joe’s Co. v. Hallatt, 981 Fed. Supp. 2d 972 (W.D. Wash. 2013).

This case is currently awaiting a decision from the Ninth Circuit.  Case No. 14-35035.

Facts and Procedural History:

Trader Joe’s, a specialty United States (“U.S.”) grocery store, filed a Lanham Act trademark infringement and dilution action against Canadian grocery store owner, Michael Hallatt.  To stand apart from its competition in the U.S., “Trader Joe’s developed a rustic South Pacific-inspired theme.”  Brief for Appellant at 6, Trader Joe’s Co. v. Hallatt, (No. 14-35035).  Although Trader Joe’s has a website that displays its products, Trader Joe’s only sells its products at its retail grocery stores in order “[t]o maintain the exclusivity of its branded products.”  Brief for Appellant at 7, Trader Joe’s Co. v. Hallatt, (No. 14-35035).  Trader Joe’s has received several U.S. trademark registrations for its marks, including “the word TRADER JOE’S for retail store services in the field of specialty foods and beverages (Trademark Reg. No. 2,171,157); for processed foods (Trademark Reg. No. 1,424,176); and for beverages (Trademark Reg. No. 2,158,990).”  Brief for Appellant at 10, Trader Joe’s Co. v. Hallatt, (No. 14-35035).  Moreover, Trader Joe’s owns a registration for its stylized word mark TRADER JOE’S for retail services.  Id.  Trader Joe’s operates more than 390 retail grocery stores in “30 states and the District of Columbia, including 14 stores in the state of Washington.”  Trader Joes Co. v. Hallatt, 981 Fed. Supp. 2d at 974.

Appellee, Michael Norman Hallatt, is a U.S. resident alien and a Canadian citizen. Trader Joes Co. v. Hallatt, 981 Fed. Supp. 2d at 976.  Hallatt “owns and operates a grocery store in Vancouver, British Columbia, Canada, operating under the name Pirate Joe’s.”  Id. at 975.  Hallatt’s store previously operated under the name “Transilvania Trading.”  Id.  Hallatt concedes that “he and others at his direction have purchased products at Trader Joe’s paying full retail prices in the state of Washington.”  Id.  Hallatt then transported the products across state borders to Canada and sold the goods unmodified in Pirate Joe’s.  Id.  Hallatt also “publically acknowledges the products he sells were purchased from Trader Joe’s.”  Id.

According to Trader Joe’s Opening Brief, Pirate Joe’s displays an identical South Pacific themed trade dress.  Brief for Appellant at 11, Trader Joe’s Co. v. Hallatt, (No. 14-35035) (“Pirate Joe’s is decorated in a manner evocative of Trader Joe’s famous and distinctive trade dress, including a colorful mural depicting a ship at sea, products sold on wooden shelves and in baskets, and hand-drawn signage.”).  Hallatt admitted that Pirate Joe’s used Trade Joe’s paper grocery bags in the past, but alleges that such practice has ceased. Trader Joes Co. v. Hallatt, 981 Fed. Supp. 2d at 975.  Unpleased by Hallatt’s actions, Trader Joe’s alleged that Pirate Joe’s used its marks to pass as an approved Trader Joe’s retailer.  Id.  As such, Trader Joe’s filed its Complaint in federal court against Hallatt, alleging trademark infringement, unfair competition, and federal trademark dilution.  Id.  Trader Joe’s also brought claims under state court.  Subsequently, Hallatt moved to dismiss for lack of subject matter jurisdiction, arguing that the Lanham Act should not apply extraterritorially in this case.  Id.

Reasoning and Holding:

Upon Hallatt’s motion to dismiss for lack of subject matter jurisdiction, the Washington District Court engaged in a lengthy analysis of the extraterritorial application of the Lanham Act.  See Trader Joes Co. v. Hallatt, 981 Fed. Supp. 2d at 976-81.  The court recited the Ninth Circuit’s three Timberlane factors that the Circuit uses to determine whether extraterritorial application is appropriate: “(1) the defendant’s actions creates some effect on American foreign commerce, (2) the effect is sufficiently great to present a cognizable injury to plaintiff under the Lanham Act, and (3) ‘the interests of and links to American foreign commerce [are] sufficiently strong in relation to those of other nations to justify an assertion of extraterritorial authority.’”  Trader Joes Co. v. Hallatt, 981 Fed. Supp. 2d at 976 (citing Reebok Int’l v. Marnatch Enters., 970 F.2d 552, 554 (9th Cir. 1992)).

The court found that all three factors disfavored extraterritorial application.  In its analysis, the court combined the first two factors of the Timberlane test, stating that a plaintiff need only demonstrate that there is “some” effect on U.S. foreign commerce.  Trader Joes Co. v. Hallatt, 981 Fed. Supp. 2d at 977 (citing to Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 428 (9th Cir. 1977)).  The court reasoned that “all alleged infringement takes place in Canada and Trader Joe’s cannot show economic harm,” so “there is no economic harm to Trader Joe’s because the products were purchased at Trader Joe’s at retail price.”  Id. at 977.  Comparing this case to Love v. Associated Newspapers, Ltd., 611 F.3d 601 (9th Cir. 2010), the court found the chance of confusion in Canada is likewise too great a stretch to claim harm in the U.S.  Id. (“Like in Love, any ‘goodwill’ related harm is too tenuous to support a cognizable Lanham Act claim when all infringing conduct is abroad.”).

The court balanced seven other relevant factors in analyzing the third factor of the Timberlane test.  Trader Joes Co. v. Hallatt, 981 Fed. Supp. 2d at 978.  Those seven relevant factors include: “The degree of conflict with foreign law or policy, the nationality or allegiance of the parties and the locations or principal places of business of corporations, the extent to which enforcement by either state can be expected to achieve compliance, the relative significance of effects on the United States as compared with those elsewhere, the extent to which there is explicit purpose to harm or affect American commerce, the foreseeability of such effect, and the relative importance to the violations charged of conduct within the United States as compared with conduct abroad.” Id. at 978 (citing Reebok, 970 F.2d at 555).  The only one of the seven relevant factors that the court found in favor of Trader Joe’s was nationality or allegiance of parties and locations of corporations.  Specifically, the court concluded that “Hallatt’s connections with the U.S. are likely sufficient to support extraterritorial jurisdiction.”  Id. at 979.  The court, nevertheless, decided that application of the Lanham Act could potentially conflict with Canada’s trademark law (and Trader Joe’s had two pending trademark applications in Canada).  Id.  After an evaluation of the Timberlane factors, the court found that it does not have subject matter jurisdiction in this case.  Id. at 980.

Two months after the decision, Judge Marsha J. Pechman dismissed Trader Joe’s remaining state law claims, finding that no party in the lawsuit was a Washington resident, all of the alleged wrongful conduct occurred out of state, and any harm to Washington residents was “extremely tangential.”  Order Granting Motion to Dismiss Amended Complaint at 10-11.  As such, Judge Pechman dismissed the case with prejudice. Trader Joes Co. v. Hallatt, 981 Fed. Supp. 2d at 981; Order Granting Motion to Dismiss Amended Complaint at 11.

Appeal:

Trader Joe’s appealed the district court decision.  In its Opening Brief, Trader Joe’s argues that the Lanham Act “is one of the few statues that Congress specifically extended beyond the borders of [the U.S.]”  Brief for Appellant at 27 (citing Steele v. Bulova Watch Co., 344 U.S. 280, 283, 286 (1952)), Trader Joe’s Co. v. Hallatt, (No. 14-35035).  Trader Joe’s asserts that Pirate Joe’s conduct is analogous to the defendant’s conduct in SteeleId. at 30-31.  Specifically, Trader Joe’s contends that “Hallatt’s activities in the United States – most notably obtaining goods from Trader Joe’s stores – were ‘essential steps in the course of business consummated abroad,’” and therefore, the U.S. purchases were part of Hallatt’s “unlawful scheme.”  Id. at 31 (citing Steele, 344 U.S. at 287).  Accordingly, Trader Joe’s submits that “[b]ecause the scheme directly involves U.S. domestic commerce, there is no need to consider whether Hallatt’s activity has ‘some effect’ on U.S. foreign commerce.”  Id. at 34 (citing Reebok Int’l Ltd. V. Marnatech Enters., Inc., 737 F. Supp. 1515, 1518 (S.D. Cal. 1989)).

Nevertheless, Trader Joe’s asserts that the Timberlane factors are satisfied in this case.  Brief for Appellant at 35, Trader Joe’s Co. v. Hallatt, (No. 14-35035).  Addressing the first two Timberlane factors jointly, Trader Joe’s argues that a customer who purchases a defective product – a product that does not adhere to Trader Joe’s quality control procedures – from Pirate Joe’s “would not be able to tell whether the defect is the fault of Trader Joe’s,” and thus “the customer would likely view Trader Joe’s less favorably, causing harm to the reputation and goodwill that Trader Joe’s has carefully cultivated over the past 40 years.”  Id. at 36-37.  Trader Joe’s contends that any issues with TRADER JOE’S branded products sold at Pirate Joe’s “would inevitably travel back to the United States, where it would injure Trader Joe’s reputation and goodwill.”  Id. at 37.

Trader Joe argues that the third Timberlane factor also favors a finding of subject matter jurisdiction. Id. at 42.  Likewise, Trader Joe’s accesses all seven sub-factors.  For the third sub-factor, Trader Joe’s asserts that because “Hallatt . . . admitted to hiring people in the state of Washington to purchase TRADER JOE’S-branded products for him,” he has “an even stronger ‘presence’ in the United States.”  Id. at 47 (citation omitted).  As such, Trader Joe’s asserts that Hallatt orchestrated the activities in the U.S. and is a permanent U.S. alien, his presence in the U.S. is strong, despite his Canadian citizenship.  Id.  Further, Trader Joe’s argues that the sixth sub-factor weighs in its favor because “[i]t was entirely foreseeable that by selling TRADER JOE’S-branded goods outside Trader Joe’s quality control structure, the goodwill and reputation of a U.S. company would be hurt in the United States.”  Id. at 49 (citing to Reebok, 970 F.2d at 557 (finding it “undeniabl[y]” foreseeable that defendant’s products sold in Mexico border towns would damage plaintiff’s brand in the United States).

Finally, Trader Joe’s claims that the district court erred in dismissing Trader Joe’s state law dilution claim and its CPA claim.  Id. at 50-57.  Focusing on the fact that Trader Joe’s operates 18 stores in Washington, Trader Joe’s asserts that a large portion of the resulting dilution from sick Vancouver residents will be felt in Washington.  Id. at 54.  Also, Trader Joe’s argues that the defendant’s conduct in “trade or commerce” is satisfied because “Hallatt engages in a persistent pattern of ‘trade or commerce’ by traveling into Washington, purchasing products from Trader Joe’s stores. . ., exporting the goods to Canada, and reselling them.”  Id. at 57.  Accordingly, Trader Joe’s urges the Ninth Circuit to reverse the district court’s decision.

Hallatt, on the other hand, argues that the district court properly dismissed Trader Joe’s Lanham Act claims for lack of subject matter jurisdiction, reiterating the district court’s reasoning.  Brief for Appellee at 10-20.  Hallatt analyzes the seven sub-factors of the Timberlane test and echoes the district court’s reasoning with all but one factor – the only factor found against him.  Id. at 32.  Finally, Hallatt argues that the district court properly dismissed Trader Joe’s state law claims and Washington Consumer Protection Act claims.  Id. at 39-54.

India Patent Act Changes

By Julie Shursky

Behind South Africa, India is managing the world’s second largest HIV treatment program.  In 2015, more than 900,000 patients received antiretroviral treatment in India.[1]  Despite the enactment of various government-funded health insurance programs and organizations to combat infectious and chronic diseases such as HIV/AIDS, the Indian government continues to struggle in financing adequate healthcare facilities for its citizens, causing a significant number of Indian citizens to “fund their health needs through out-of-pocket expenses.”[2]  In an effort to protect and manage its market, India enacted Section 3(d) and established patent laws that allow its government to grant compulsory licenses for pharmaceutical products.

In an effort to increase the availability of low-cost drugs, the Indian Patent Act of 1970 (“1970 Act”) prohibited the patentability of pharmaceutical products.[3]  The 1970 Act, however, permitted patents on the manufacturing process of said products,[4] which led to the booming of India’s generic drug sector through capitalizing on innovation by multinational companies that were unable to obtain patents under Indian law.  As a direct result of this legislation, India earned the nickname “pharmacy of the world” for its burgeoning production and exportation of generic pharmaceutical products.[5]

India’s fast-emerging pharmaceutical sector is broadly divided into two major groups: multinational pharmaceutical corporations or pharmaceutical MNCs, and domestic pharmaceutical corporations.[6]  The rivalry between brand-name drug makers, who seek patent protection and generic manufacturers, who sell lower-cost, copycat versions of medicines, has grown over the years.

The United States, for example, has expressed its concern with recent developments in India’s patentability standards and grants for compulsory licenses.[7]  In a report by the United States Trade Representative, the United States expressed particular concern with “[t]he unpredictable application of Section 3(d)” and “the lack of clarity on standards for Sections 85 and 92 compulsory licenses.”[8]  Unlike the United States, India’s patent laws limit evergreening[9] strategies and ensure that companies are receiving only a one-time price premium for their innovative products, rather than extending patent protection for minor enhancements.  As such, India’s patent laws do not support the extension of patent terms on current products, but rather require “enhancement of the known efficacy” for protection.[10]  Section 3(d), therefore, is only intended to prevent evergreening – it does not prevent the patenting of new, innovative drugs within the pharmaceutical industry.[11]

 

[1] SPOTLIGHT: Catalysing change for an AIDS-free generation in India, World Health Organization (July 25, 2016, 11:58 AM), http://www.who.int/hiv/pub/newsletter/hiv-hep_newsletter_mar2016/en/index7.html.

[2] Madhavi Chopra, Of the Big Daddy, the Underdog, the Mother Hen, and the Scapegoats: Balancing Pharmaceutical Innovation and Access to Healthcare in the Enforcement of Compulsory Patent Licensing in India, its Compliance with TRIPS, and Bayer v. Natco, 13 Santa Clara J. Int’l L. 333, 335 (2015).

[3] The Patents Act, No. 39 of 1970, INDIA CODE §5(a)-5 (2005), vol. 15, available at http://indiacode.nic.in.

[4] Id. at §53.

[5] Janice M. Mueller, The Tiger Awakens: The Tumultuous Transformation of India’s Patent System and the Rise of Indian Pharmaceutical Innovation, 68 U. Pitt. L. Rev. 491, 536-37 (2007) (“India has been a net exporter of drugs since 1988-89 . . . .”).

[6] Id. at 532-42.

[7] Office of the U.S. Trade Rep., 2016 Special 301 Report 38-39 (2016).

[8] Id. at 39.

[9] Evergreening “is when a company manufactures a product for which it secures a patent.  Shortly before the expiration of that patent, the company files a new patent that revises or extends the terms of protection . . . . [Evergreening] is a method by which technology producers keep their products updated, with the intent of maintaining patent protection for longer periods of time than would normally be permissible under the law.”  Uttam K. Shukla, ‘Ever Greening’ Patents, SCI. REP., Aug. 2011, at 31.

[10] Patents Act, 1970, § 3(d), amended by Patents (Amendment) Act, 2005.

[11] Javier Esparza, Indian Patent Law: Working Within the TRIPS Agreement Flexibilities to Provide Pharmaceutical Patent Protection While Protecting Public Health, 24 J. Transnat’l L. & Pol’y 205, 221 (2014-15).

Prior Use Rights v. Patent Protection

By Julie Shursky

Before the enactment of the Leahy-Smith America Invents Act (“AIA”), the prior user rights defense was limited to business method patents.  35 U.S.C. § 273 (2006) (restricting the defense to patent claims for “a method of doing or conducting business”), amended by Leahy-Smith America Invents Act, Pub. L. No. 112-29, sec. 5(a), 125 Stat. at 297.  The AIA, however, amended the language of Section 273, such that the defense is now applicable to any “process” or any “machine, manufacture, or composition of matter used in manufacturing or other commercial process.”  35 U.S.C. § 273(a) (2011).  Further, Section 273 states that an accused infringer must prove, by clear and convincing evidence, that the patented subject matter was “commercially used” in the United States at least a year prior to the effective filing date of the claimed invention.  35 U.S.C. § 273(a)(2).  This expanded prior user rights defense under the AIA applies to any patent issued on or after September 16, 2011.  Pub. L. No. 112-29, sec. 5(c), 125 Stat. 284, 299 (2011).  To qualify for the defense, the accused infringer must establish strict requirements that limit the defense’s applicability to very rare situations:

  • The use must be a good faith commercial use in the United States. Since the commercial use must be in the United States, some foreign commercial activity will not qualify.
  • The use must occur at least one year before the earlier of (1) the effective filing date of the asserted patent; or (2) the date on which the claimed invention was disclosed to the public in a manner that qualified for the prior art exception from under AIA. 35 U.S.C. 102(b); 35 U.S.C. 273(a), (e)(2) & (4).
  • The use must be in connection with (i) an “internal commercial use” or (ii) an arm’s length sale or transfer of a useful end result of the internal commercial use. 35 U.S.C. § 273(a)(1).

The AIA also sets forth several important limitations to the defense:

  • The prior commercial use defense is “personal,” which means it cannot be separately licensed, transferred, or assigned to a third party, except that the defense can be transferred as part of a good faith transfer of an entire business or relevant line of business.
  • In the event that the defense is transferred as part of such a good faith transfer, the defense may only be asserted for use at sites where the use occurred prior to the later of the date of the transfer or the effective filing date of the claimed invention. If the purchaser begins practicing the commercial use at the new sites after the effective filing date and after the transfer takes place, those uses will not qualify for the defense.
  • The defense is not a “general license,” which means that it does not provide a general license to all the claims of the asserted patent. For example, if a party qualifies for the defense, but only has practiced claims 1-5 of a patent, that does not mean the party can also practice claims 6-10 of the same patent without being liable for infringement.
  • The defense is not available if the commercial use is derived from the patentee or persons in privity with the patentee.
  • If the commercial use is abandoned, the defense may not be relied upon with respect to activities that occur before the abandonment. Certain legislative history, however, suggests that processes that are used periodically or seasonally may still qualify for the defense (i.e., the periodic or seasonal use does not render them abandoned), even though they are not continuous.

Although the prior user rights defense under the AIA is a powerful tool to defend against patent infringement claims, there is a caveat to the defense, which is that the accused infringer must maintain sufficient records of its prior use.  The records should be detailed enough to preserve the defense with respect to each claim that may be asserted.

 

Since the law is new, there is a lack of clarity on limitations, such as the ability of the prior user to expand the capacity of the use, the ability to implement improvements, the requirements of the continuousness of the use, and what constitutes a “commercial use” as required under the statute.  The intention behind the prior user defense, however, is not only to provide for fairness to a prior inventor, but also to boost the rights of a trade secret holder against the rights of a later patent holder.  See 157 Cong. Rec. S5319 (daily ed. Sept. 16, 2011) (statement of Rep. Smith).  Specifically, the sponsors of the AIA intended to broaden the amendment in order to insulate businesses from having to disclose their internal processes or manufacturing materials.  See, e.g., 157 Cong. Rec. H4483 (daily ed. June 23, 2011) (statement of Rep. Smith) (“The prior-use defense is not overly expansive and will protect American manufacturers from having to patent the hundreds or thousands of processes they already use in their plants.”); 157 Cong. Rec. S5426 (daily ed. Sept. 8, 2011) (statements of Sen. Blunt and Sen. Leahy) (discussing that “the prior user rights provided under section 5 of H.R. 1249 will allow developers of innovative technologies to keep internally used technologies in-house without publication in a patent”).  Therefore, a major driving factor behind broadening the prior-user defense was to shield manufacturers who owned trade secrets from subsequent patent-infringement claims.

 

 

New Post-Registration Pilot Program (P3)

By Samantha Leiner

Purpose and Implementation of Post-Prosecution Pilot Program (P3):

The USPTO created the new pilot program, Post-Prosecution Pilot Program (P3), in response to stakeholder input gathered during various public forums to support the USPTO’s Enhanced Patent Quality Initiative.  The purpose of the new P3 Pilot Program is to see if the USPTO can improve patent practice between a final rejection from the USPTO and a notice of appeal by the applicant.

Under the P3, a panel of examiners, including the examiner on record for the application, will hold a conference with the applicant to review the applicant’s response of the final rejection given by the USPTO.  According to the Federal Register’s summary of the new P3 program, the purpose of the program was to “increase the value of after final practice by (1) leveraging applicant input obtained through an oral presentation during a conference with a panel of examiners, and (2) also providing written explanation for the panel decision.”  United States Patent and Trademark Office; Post Prosecution Pilot Program, 81 Fed. Reg. 44,845 (July 11, 2016).   The applicant will also “have the option of including in the response a proposed non-broadening amendment to a claim(s).” Id.

The program is also designed to help ease the load of appeals cases the Patent Trial and Appeals Board (PTAB) hears and to “reduce the number of Requests for Continued Examination (RCE).”  Id.

The P3 program will begin accepting applications on July 11, 2016, until the first of two dates has occurred: (1) January 12, 2017 or (2) when the Office has accepted a total of 1,600 complaint requests to participate under the P3.  Id.  Each technology center may accept no more than 200 complaint requests, which means that one technology center may stop accepting requests before another technology center.   Id. at 44,846.

Background of Pilot Programs:

There has been two other Pilot Programs administered at the USPTO within the last 11 years: the Pre-Appeal Brief Conference Pilot Program (Pre-Appeal program), which was first administered in 2005, and the After Final Consideration Pilot Program 2.0 (AFCP 2.0), which was first administered in 2013.

The Pre-Appeal program “provides an avenue for a patent applicant to request a review of the basis of a rejection(s) in a patent application prior to the filing of an appeal brief.”  Id.  A difference between the Pre-Appeal program and the P3 is that the Pre-Appeal program allows for the request to be filed in conjunction with a notice of appeal, while the P3 program requires the request be submitted before a notice of appeal.  When the request for the Pre-Appeal program is filed with a notice of appeal, “a panel of examiners (including the examiner of record) formally reviewed the rejections of record in light of the remarks provided in the request.”

The AFCP 2.0 allows “examiners [to] consider a response filed after a final rejection pursuant to 37 CFR 1.116 that includes remarks and amendments that may require further search and consideration, provided that at least one independent claim includes a nonbroadening amendment.”  Id.  Additionally, “the examiner also may conduct an interview with the applicant when the response does not place the application in condition for allowance.”  Id.

The P3 combines the effective features of both the Pre-Appeal program and the AFCP 2.0, while adding new features as well.  The P3 takes the consideration of an after final response by a panel from the Pre-Appeal program, takes the optional proposed amendment included in the after final response, and adds “an opportunity for the applicant to make an oral presentation to the panel of examiners.”  Id.

Requirements for New Pilot Program:

For an applicant to be eligible to participate in P3, “an application must contain an outstanding final rejection and be (i) an original utility non-provisional application filed under 35 U.S.C. 111(a), or (ii) an international utility application that has entered the national stage in compliance with 35 U.S.C. 371 (see 37 CFR 1.491).”  Id.   A continuing application is filed under 35 U.S.C. § 111(a) and is allowed to participate in the P3.  “Reissue, design, and plant applications, as well as reexamination proceedings, are not eligible to participate in the P3.”  Id.  A request for response under 37 C.F.R. § 1.116 for consideration under the P3 must include:

  1. Transmittal Form. While an applicant may submit their own transmittal form, the USPTO suggest using its provided transmittal form, PTO/SB/444, because it will help the PTO to “quickly identify P3 requests and facilitate timely processing.” at 44,847.
  2. The response required for the P3 must be separate from the transmittal form and cannot be more than 5 pages of arguments.  Additionally, the arguments are limited to appealable, not petitionable, matters.  The PTO considers conclusions, definitions, claim charts, and diagrams as part of the argument in the response.  Therefore, those elements are limited to the 5-page limit as well.  Arguments in the response may be directed to the patentability of the proposed amendment if one is included.  The pages containing the actual proposed amendment will not count towards the 5-page limit.  If the applicant submits an affidavit or other evidence, that affidavit or other evidence will be counted towards the 5-page limit.  The transmittal form, if it does not include any arguments, will not count towards the 5-page limit.  If a page of the response consists solely of a signature, then that page will not count towards the 5-page limit.  The applicant will not be able to circumvent the 5-page limit by including arguments in different documents.  The response may be single-spaced, but must comply with the requirements under 37 C.F.R. § 1.52(a).  In order to stay within the 5-page limit, the response can refer to an argument already on the record rather than repeating the argument “by referring to the location of the argument in a prior submission and identifying the prior submission by title and/or date.”  Id.  Simply stating “the arguments of record” or “the paper dated X” without a pinpoint citation, will not be accepted for consideration of the P3.
  3. Statement that Applicant is Willing and Available to Participate in the Conference with the Panel of Examiners. The applicant must submit a statement verifying that he/she is “willing and available to participate in the conference with the panel of examiners.”  This can be done simply if the applicant uses the for PTO/SB/444 for the transmittal form as well.  Once the PTO has determined the request for the P3 is timely and compliant, the PTO will contact the applicant about scheduling the conference.  If after 10 days, the PTO and the applicant cannot agree on a scheduled conference or the applicant declines to participate in the conference, the request for the P3 will be deemed improper and declined.  The applicant can participate in the conference in person, by telephone, or by video conferencing tool set up by the PTO.  The applicant is able to present to the panel in the conference “in a manner similar to how an applicant presents an argument in an ex parte appeal before the PTAB.” Id.  the applicant’s presentation may take up to 20 minutes.
  4. Proposed Amendment (Optional). Any entry of a proposed amendment is governed by 37 C.F.R. § 1.116. See MPEP 714.12.  The biggest concern with the proposed amendment is that they may not broaden the scope of a claim in any aspect.  The analysis for whether a propose amendment broadens a claim impermissibly is similar to the guidance set forth ins MPEP § 1412.03 for determining whether a reissue claim has been broadened.  Proposed amendments that focuses on a single independent claims are the amendments more likely place the application into condition for allowance.  If a proposed amendment contains extensive amendments (either in terms o the nature of the amendment or to the claims to be amended), it will require a more extensive consideration and would likely not place the application in condition for allowance.

Only one P3 request will be filed per final rejection by the USPTO.   Additionally, there is no fee required to request consideration under the P3 and all papers to be filed for the P3 must be filed using the USPTO’s Electronic Filing System-Web (EFS-Web).  Further, to be eligible for the P3, an applicant must not have previously filed for the Pre-Appeal program or the AFCP 2.0.

An applicant must have filed a P3 request “within two months from the mailing date of a final rejection and prior to filing a notice of appeal.”  Id.  A request for P3 will be seen as untimely “if it is filed (i) more than two months from the mailing date of the final rejection, (ii) in an application that does not contain an outstanding final rejection (e.g., a P3 request will not be accepted in response to a second action non-final rejection), (iii) in response to a final rejection for which a proper AFCP 2.0 request has been filed, (iv) on or after the date a RCE or notice of appeal is filed in response to the same outstanding rejection, or (v) on or after the date an express abandonment is filed.”  Id. at 44,846-44,847.

USPTO’s Procedures on Requests for New Pilot Program:

After a request is submitted to the PTO for the P3, the PTO determines if the request if timely and compliant with the requirements.  If the request is timely and compliant, the PTO will contact the applicant to schedule the conference.  If the request is untimely and/or non-compliant, a conference will not be held.  If untimely and non-compliant, the PTO will communicate the reason the request was found to be untimely or non-compliant. If the request is timely and compliant, but the technology center has reached its 200 request limits, a conference will not be held.

An important note is that the filing of a P3 request will not toll the six-month statute of limitations on replying to the final rejection.  To avoid abandonment of appealing the final rejection, further action, such as a notice of appeal or RCE, will have to be done within the six-month statutory period.

The panel of examiners will most likely consist of the examiner of record, the SPE, and a primary examiner, who is usually the signing primary examiner for the examiner of record fi the examiner of record is a junior examiner.

Any materials used in the presentation by the applicant “will be placed in the file and will not count against the 5-page limit on arguments.” Id. at 44,848.

After the conference, the applicant will be informed of the panel’s decision.  The decision may indicate one of the following:

  • Final Rejection Upheld. The notice if the final rejection is upheld “will not contain any additional grounds for rejection or any restatement of previously made rejection.”  The notice will simply summarize the status of the claim and will communicate any reasoning for rejection of the proposed amendments.  …  The time period for any other action on the final rejection expires on “(1) the mailing date of the notice of decision; or (2) the date set forth in the final rejection, whichever is later.” Id. at 44,849.   A notice of decision indicating “final rejection upheld” is not petitionable, but is subject to appeal.
  • Allowable Application. The notice of decision will be mailed with a notice of allowance, and the notice will state that the rejection(s) is/are withdrawn.
  • Reopen Prosecution. The notice of decision will state the rejection(s) are withdrawn, and a new Office Action is sent to the applicant.  It will also state that no further action is required by the applicant until notified.

If the applicant files any of the following after the date of filing a P3, but prior to a notice of decision from the panel, the request for the P3 will be terminated on the merits: “a notice of appeal, a RCE, an express abandonment under 37 C.F.R. § 1.138, a request for the declaration of interference; or a petition requesting the institution of a derivation proceeding.” Id.   The office will communicate with the applicant the reason for the termination of the P3 proceeding, “the result of the treatment under 37 CFR 1.116 of the response and any proposed amendment filed with the request, and the time period for the applicant to take any further action that may be required as dictated by the facts.

 

Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292 (Fed. Cir. 2015)

By Julie Shursky

Facts:

  • Proxyconn, Inc. (“Proxyconn”) filed suit against Microsoft Corporation (“Microsoft”), accusing Microsoft of infringing its U.S. Patent No. 6,757,717 (“the ’717 patent.”) Microsoft, 789 F.3d at 1295.  This appeal arises from the inter partes review (“IPR”) of the ’717 patent.  Id.
    • The ’717 patent “relates to a system for increasing the speed of data access in a packet switched network.” at 1295.
  • The United States Patent and Trademark Office, Patent Trial and Appeal Board (“Board”) issued a final written decision, finding all but one of the instituted claims (claim 24) to be unpatentable under 35 U.S.C. § 102 and additionally under 35 U.S.C. § 103.  Id. (citing to Microsoft Corp. v. Proxyconn, Inc., IPR2012-00026 and IPR2013-00109, Paper No. 73 (PTAB Feb. 19, 2014).  The Board further denied Proxyconn’s motion to amend.  Id.
  • Microsoft appeals the Board’s determination that claim 24 is patentable. Proxyconn cross-appeals, “challenging the Board’s use of the broadest reasonable interpretation (“BRI”) standard of claim construction during IPRs, its unpatentability determinations, and its denial of Proxyconn’s motion to amend.”  Id.

BRI Standard for Claim Construction:

  • At issue was the Board’s construction of the phrase “a gateway . . . connected to said packet-switched network in such a way that network packets sent between at least two other computers” recited in claim 6. Id. at 1298 (citing to ’717 patent, col. 10 l. 64-col. 11. l. 12) (emphasis in original).
  • Before the Board, Proxyconn argued that the term “two other computers” referred only to the sender and receiver computers, while Microsoft contended that the term “two other computers” could represent any two computers that are connected on the network to a gateway, including a caching computer. Id. at 1298.  The Board agreed with Microsoft’s interpretation, finding that “the ‘two other computers’ were not limited just to the sender/computer and the receiver/computer,” and therefore concluded that the reviewed claims were not patentable.  Id.
  • Upon review, the Federal Circuit disagreed with the Board’s conclusion, finding that the phrase “two other computers” could not include the caching computer. Id. at 1299.  First, the panel noted that claim 6 of the ’717 patent separately recited the “two other computers” and the caching computer.  Id. (citing to ’717 patent, col. 10 l.54- col. 11 l. 12).  Specifically, the panel reasoned that, “[n]ot only are the ‘two other computers’ recited independently from, and in addition to, the gateway and caching computers, the word ‘other’ denotes a further level of distinction between those two computers and the specific gateway and caching computers recited separately in the claim.”  Id.  The Federal Circuit further found that “in each instance where [two other computers] is used, the phrase . . . describes components that are separate and distinct from the gateway and the caching computer.”  Id.
  • Accordingly, the court found that the specification clearly identified that caching computer and the “two other computers” to be “separate and distinct components of the overall system.” Id.  To expand “two other computers” to include the separately identified caching computer unreasonably broadens the language in the claims and specification.  Id.  Therefore, the Court “vacate[d] the Board’s findings of unpatentability of claims 6, 7, and 9 and remand[ed] for proceedings consistent with [the] opinion.”  Id.
  • For similar reasons, the panel disagreed with the Board’s conclusion “that the terms ‘sender/computer’ and receiver/computer’ were broad enough to include the intermediary gateway and caching computers.” Id. at 1300.  Rather, the Court concluded that such an interpretation “does not reasonably reflect the language and disclosure of the ’717 patent.”  Id.  Accordingly, the Court also vacated the Board’s findings of unpatentability of claims 1, 3, 10, 22, and 23 and remanded back to the district court.

Claim 24 is Patentable:

  • Ultimately at issue in claim 24 is whether the term “comparing” is the same as the term “searching. Id. at 1301-02.  The Federal Circuit concluded that the two terms were not identical, and thus agreed with the Board.  Id. at 1302 (“Based on the clear language of the specification, the Board was correct in concluding that the broadest reasonable interpretation of ‘searching for data with the same digital in said network cache memory’ includes searching in a set of potentially many data objects.”).

Anticipation:

  • The Court also agreed with the Board that “the download requests that DRP’s client sends to the server after receiving the index from the server and comparing it to the local index meets the ‘receiving a response signal’ limitation of claim 11,” and thus concluded that DRP anticipates claims 11, 12, and 14 of the ’717 patent. Id. at 1303.

Board’s Denial of Proxyconn’s Motion to Amend Claims 1 and 3:

  • Proxyconn also challenged “the Board’s denial of its motion to amend claims 1 and 3.” Id. at 1303.  Proxyconn argued that the Board exceeded its own authority “by imposing the additional requirements of [a prior Board opinion] and by relying on the DRP reference” rather than exclusively relying on statutes and regulations governing motions to amend.  Id. at 1305-06.
  • Proxyconn sought to substitute claims 35 and 36 with claims 1 and 3 respectively. Microsoft argued that the substituted claims were not patentable for anticipation by the DRP reference.  Id. at 1305.  Proxyconn made several other arguments, but failed to argue that substitute claims 35 and 36 were patentable over the DRP reference.  Id.
  • Prior to addressing the arguments on either side, the Federal Circuit reviewed the legal framework governing amendments during IPR proceedings. Id. at 1303.
    • Under the America Invents Act (“AIA”), Congress granted specific authority to the Board in relation to IPR proceedings. Id. 1303-04.  Specifically, the Board promulgated two regulations under the AIA that are relevant to this case: (1) “37 C.F.R. § 42.20, which applies generally to motions practice,” and (2) “37 C.F.R. § 42.121, which imposes specific requirements on the amendment process.”  Id. at 1304.
    • In addition to the two regulations, the Board also issued a six-member panel decision in Idle Free Systems, Inc. v. Bergstrom, Inc., IPR012-00027, 2013 WL 5947697 (PTAB June 11, 2013), where it provided further recitation of several important requirements for a patent owner’s motion to amend. Id. at 1304.  According to Idle Free, the Board requires a patentee to show that the substitute claim is patentable over prior art that is “known to the patent holder.”  Id.  Although the Idle Free decision is not binding, the Board frequently relies on that decision in denying motion to amend.  Id.
  • First, the Federal Circuit agreed with the Board that “§ 42.121(a)(2) is not an exhaustive list of grounds upon which the Board can deny a motion to amend.” Id. at 1306.  Next, the Court determined that it is in the Board’s discretion to choose between rulemaking and adjudication.  Id. at 1307.  Given the Board’s lack of experience with motions to amend, the Federal Circuit agreed that the Board should retain the ability to deal with such motions on a case-by-case basis to ensure an effective administrative process.  Id.   As such, the Court recognized that “there is merit to [the Board’s] arguments,” in not creating a black letter rule on motions to amend, and thus held that the Board has not “abused its discretion in choosing adjudication over rulemaking.”  Id. at 1307.
  • Finally, since the Board’s reliance on the DRP reference “was front and center throughout the course of the proceedings” and Proxyconn “was [not] taken by surprise,” the Federal Circuit found that “the Board acted permissibly in requiring Proxyconn to establish the patentability of substitute claims 35 and 36 over the DRP reference.” Id. at 1308.

Lessons Learned:

  • In this decision, the Federal Circuit provides guidance on how the BRI standard should apply during IPR proceedings. Further, by affirming the Board’s denial of a patentee’s motion to amend, the Federal Circuit resolved the issue of whether the patentee bears the burden of proving patentability of proposed claim amendments during an IPR proceeding.  Specifically, the Federal Circuit determined that the Board has discretion in adjudicating that a patentee must show that its proposed substitute claims are patentable over prior art.

Are 102, 6th Paragraph and 102, 2nd Paragraph the New 101 in Patent Eligibility? Williamson v. Citrix Online Makes One Wonder: Part 2 of a 2 Part Series – Possible Strategies

Are 102, 6th Paragraph and 102, 2nd Paragraph the New 101 in Patent Eligibility?  Williamson v. Citrix Online Makes One Wonder:  Part 2 of a 2 Part Series – Possible Strategies

By Michael Stein, Stein IP LLC

September 2, 2015

 

This is part 2 of a 2 part series addressing the growing use of 112, 6th and 2nd paragraphs to invalidate claims in the USPTO and the courts, and what the standards are for implementation and application of these sections of 35 USC.  Part 2 explores possible strategies to minimize the impact of 112, 6th and 2nd paragraph, and likely assist in avoiding 101 rejections as well.

 

So, what is a patent attorney to do when faced with the difficult task of preparing a new patent application, whether from scratch or based upon foreign priority, and hopes to avoid either having limitations interpreted as being means plus function limitations under 112, 6th paragraph or being declared indefinite under 112, 2nd paragraph (remember, for the purposes of this article, the pre-AIA references to the 35 USC are being used for the sake of simplicity, but the same holds true under post-AIA situations since the language of the relevant sections has not changed)?

 

The following are some tips which I believe will increase the chances of running into problems with 112, 6th paragraph and 112, 2nd paragraph, and also hopefully 101 as well.  One important consideration is that the specification as originally filed be as detailed, complete and definite as possible, since one cannot amend the specification significantly after filing to overcome any claims rejections.  There is no magic language that can be used as a safe harbor, as the USPTO has clearly indicated in their webinars on 101 (and thus by extension to 112).  So here it goes, in no particular order.

  1. In describing the invention, try to avoid using words like “device,” “computing element,” “unit,” “portion,” or even “for …ing”  as examiners and courts are increasingly unpredictable in their applications of § 112, 6th paragraph analysis, more frequently treating such words as “nonce” words.  Instead of saying “processing unit” or “processing module,” simple recite a “processor,” for example
  2. Use “configured to” or “adapted to” if the structure is questionable.  Such language assists in making an argument that the limitation has structure and is not purely functional.
  3. Integrate structural limitations with the functional limitations in the claims.  Sometimes a little more in the claim, to provide some real structure will actually broaden the scope of your claim since the people performing claim construction will not have to go to the specification to determine the breadth and scope of the disclosed structure and its equivalents.  Once a claim constructor goes to the specification, it is very difficult to limit the extent to which the specification is relied upon and the owner of the patent does not want to be limited to only the specific embodiments disclosed in the specification when asserting infringement.
  4. Be careful about language like “determining,” “calculating,” “comparing,” etc., with no explanation as to what parameters are being used and how these activities are being accomplished. Provide specific examples in the specification where possible and practicable to clearly explain the algorithm being used.  See, for example, Ibormeith IP v. Mercedes-Benz,  732 F.3d 1376 (Fed. Cir. 2013) where the court held that there was not sufficient structure for “computational means for weighting the operational model according to the time of deay.. and for deriving, from the weighted mode, driver or operator sleepiness condition and producing an output determined thereby”, when a description of an algorithm that places no limitations on how values are calculated, combined, or weighted is insufficient to make the bounds of the claim understandable.
  5. For the drawings, do not use simplistic line charts (e.g., a box with a few smaller boxes inside to represent a computer) or flow charts, but use complex and layered charts.  Provide a detailed hardware diagram, and flowcharts showing the specifics of what is happening. Relate the hardware to the functionality, such as what gets passed and from where to where.  For algorithms, consider having separate diagrams showing the distinct operations of each step in the most general flowchart(s), so that even if the most basic algorithm is determined to be a means plus function limitation, one can argue that the more detailed diagrams and corresponding description provide sufficient structure, and one can also argue that the more detailed diagrams and corresponding description are not merely abstract ideas with nothing more should a 101 rejection be raised.

 

I have no doubt that there are many other techniques to address the growing use of 112, 6ht and 2nd paragraphs, and different people have different viewpoints.  Not even the judges on the en banc Federal Circuit all agreed when 112, 6th should be used, and in what manner, with the dissent indicating that it will be very difficult in the future to assess the scope of claims in the future based upon the majority’s reasoning.  If they cannot agree, then it cannot be so simple for us practitioners.  We can only do what we feel is best for our clients.

If you have any other techniques to avoid limitations being interpreted as means plus function under 112, 6th paragraph, or to ensure that there is sufficient structure in the specification under 112, 2nd paragraph, please let us know.

Hague Agreement Regarding Industrial Designs (Design Patents) Taking Effect in US on May 13, 2015

Written by Tom Matikainen

The United States has deposited its instrument of ratification to the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs on February 13, 2015 with the WIPO.  The Hague Agreement took effect on May 13, 2015, and enables inventors of industrial designs to file a single standardized application with the USPTO to apply for a design patent in each of 62 territories that are members of the Agreement.  Such an Agreement will make it so much easier for inventors to seek design patent protection in many countries outside the US, thereby reducing costs and time to acquire foreign protection.  Plus, international design patent applications filed on or after May 13, 2015 will have a term of 15 years, instead of the current 14 year term

Does Innovation lead to Prosperity for All?

By Evan Jensen

The modern industrialized economy is a fascinating experiment because never before in history have so many people been so productive. The scientific method, objective metrics of efficiency, mass production, information technology, flight, the list goes on of new capabilities and methods that have arisen fairly recently on the timescale of human civilization.

But today’s economy is so productive that it suffers from a surplus of workers, making it difficult for many people to earn a living. Which means we have to ask the question- does innovation lead to prosperity for everyone,[1] or does innovation cause centralization of wealth because of automation and offshoring?

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Game Theory and Patent Enforcement

By Evan Jensen

The patent system is a complex and sometimes controversial aspect of the American economic, technological, and legal systems. I will attempt to explain why both sides of the controversy; both the ‘pro-patent’ and many of the so-called ‘anti-patent’ advocates are actually substantially in agreement, but prefer different strategies for dealing with collective action problems.

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