Archive for the ‘Featured’ Category

The ignored duty to disseminate patent- and trademark-related information to the public

Tuesday, December 22nd, 2009

Despite its massive size, budget and complex regulatory framework, the Patent and Trademark Office has only two statutorily defined duties. According to 35 U.S.C. §2, the Office:

“(1) shall be responsible for the granting and issuing of patents and the registration of trademarks; and

(2) shall be responsible for disseminating to the public information with respect to patents and trademarks.”

That’s it. Grant, issue, register; disseminate information. Simple and straightforward.

While some may argue that the “issuing” aspect has been forgotten in recent years, its difficult to argue that the Office doesn’t pay sufficient attention to the first responsibility. The granting and issuing of patents and the registration of trademarks is the business of the Office, and the Office treats these responsibilities with the appropriate attention.

The same cannot be said, however, for the second responsibility. The duty to disseminate information to the public seems to be forgotten and, at times, flat ignored.

Yesterday was one of those times.

A storm had dumped a mountain of snow on the D.C. area over the weekend, causing the Office of Personnel Management to advise on its website that all federal agencies in the Washington, D.C. area would be closed the next day, December 21.

Many patent practitioners immediately wondered whether the Office was officially closed…thereby triggering “the rollover rule” that would effectively extend Monday due dates to Tuesday.

Unfortunately, the Office never told the patent community whether it was “officially closed,” leaving more than a few of us with less than a clear picture of whether the rollover rule was in play. Morning came and went without any word…as did the afternoon. Nothing. I’m writing this post at 11:38 PM and the Office website still doesn’t say anything about the closure (or the non-closure).

A simple message on the website would have eliminated all confusion. “The Patent and Trademark Office is open (or closed) for purposes of filing papers and paying fees….”

If you think this is trivial, roll back the clock to Halloween, 2007. As many practitioners were preparing last minute continuation applications in an effort to beat the November 1 effective date of the controversial continuation rules, the United States District Court for the Eastern District of Virginia issued a preliminary injunction that temporarily blocked the implementation of the rules. With the stroke of a pen, the urgency associated with those last minute continuation applications disappeared.

While word of the injunction circulated quickly through the blogosphere, the Office remained silent. In fact, at the close of business that day, the Office still had not directly notified the patent community about the injunction that negated the need to file last minute continuations.

Fail.

Sure the Office has successes in the dissemination arena – the ability to search patents and published applications on the website comes to mind. But there are other glaring failures as well – you still cannot, for example, download a .pdf of an issued patent from the uspto.gov website. Seriously….how amazing is that?

With these failures in the “information dissemination” systems, policies and procedures of the Office, can it be said that the Office is satisfying its duty to disseminate information to the public?

Clearly I think not. The Office can, and must, do better. The uspto.gov website should be viewed as the authoritative source of such information, not the butt of jokes and snarky blog posts. This won’t happen, though, until the Office stops ignoring its responsibility to disseminate information.

Director Kappos is bringing welcome change to many areas of the Office. I’m hopeful that a refresh of the duty to disseminate is somewhere on the punch list.

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Friday food for thought: Did the Patent and Trademark Office leave $118 million on the table?

Friday, December 18th, 2009

We’re all familiar with the so-called cash crunch that the Patent and Trademark Office faced during fiscal 2009. Patent-based revenue was hit from several angles during the year, resulting in a dramatic reduction in the fees that support operations. A drop in the number of new applications meant applicants were paying fewer filing fees, and the historically low allowance rate translated to fewer issue fees being paid.

Acting Director John Doll reported the lower filing rate in March…and indicated that the Office had stopped hiring Patent Examiners as a result.

The impact of the shortfall didn’t stop at a hiring freeze, though. The Office warned of furloughs and lowered bonuses, reportedly eliminating some. A source has even indicated that the Office adjusted air conditioning schedules in an attempt to save money.

At the end of the summer, the situation appeared so grim that the Office went to Congress and asked permission to move a$60-70M surplus from the trademark side over to the patent side (yes, an act of Congress is needed).  Congress acted swiftly, and President Obama signed the transfer into law on August 7, 2009.

The urgency of the situation seemed to pass, and operations continued at new ‘adjusted’ levels.

Then, shortly after closing the books on fiscal year 2009, the Office issued its 2009 Performance and Accountability Report. In it, the Office notes that actual fee collections for 2009 totaled $1.874B. As a result, the Office was left with a final appropriation level of $1.874B despite having an approved budget of $2.010B.

So there’s the shortfall. The crunch.

In these circumstances, I would have expected the Office to have spent every penny available to it, making difficult choices along the way. I’m not entirely sure that this happened, though. The following table, reproduced from page 45 of the Report, seems to indicate that $118M was left on the table.

pto_table

I don’t see that management specifically addressed these monies in the Report, and do not know the status of these funds. I suspect they may be lost to fee diversion – a very odd result considering the overall budget shortfall –  since they were not spent during the year in which they were collected. The status indicator “Unobligated Balance, Available” might suggest that the Office will have access to these funds in 2010…but it’s not entirely clear.

FY2009 was certainly full of challenges and I think it’s a bit much to expect the Office to have incurred expenses that neatly matched fee collections, particularly considering the drastic cost-cutting measures that had to be implemented in the final months of the year.  That said, missing it “by that much” would be acceptable. Missing the mark by $118M, though, isn’t.

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FTC sues patent reformer Intel for damage done to innovation and consumers

Wednesday, December 16th, 2009

Microchip ProductionThe Federal Trade Commission sued Intel today, accusing the company of using its dominant market position to stifle competition. The agency’s complaint alleges that Intel used a variety of anticompetitive tactics “to put the brakes on superior competitive products that threatened its monopoly….”

Specifically, the Commission claims that Intel used threats to coerce computer manufacturers into buying Intel chips instead of those of rival manufacturers, and to block the marketing of machines that contained non-Intel chips.

What has been the impact of Intel’s behavior? According to the Commission, the company’s actions over the last decade have damaged “competition, innovation, and, ultimately, the American consumer.”

Intel, of course, has been a vocal leader in the patent reform debate over recent years. The company is a member of the computer/software industry’s Coalition for Patent Fairness and has publicly called  for changes that would curb litigation it views as “abusive.” A Promote the Progress reader has even speculated that Intel was the invisible hand behind several letters offering support for the failed rules package that would have placed arbitrary limits on an applicant’s ability to file continuation applications.

The company’s policy blog assures us that its efforts to change the patent laws are aimed at encouraging innovation and helping consumers:

…we believe that good faith manufacturers should be able to innovate and develop new products for consumers without having to worry whether they are going to lose the “patent lottery”, where speculative companies that do not produce or sell anything are able to reap large rewards in court for small sums invested in buying up patents and suing on them.

Today’s lawsuit reveals an interesting dichotomy. On one hand, the company appears willing to use its own monopoly power to block competition and protect its position. On the other hand, as its patent reform efforts show us, the company objects when others assert against it the monopoly power provided by patents.

The first half of that dichotomy is illegal, which explains the Commission’s lawsuit against the company. The second half, however, is not. A patent owner, whether she be the original inventor, a speculator, or even the fabled patent troll, has an exclusive right to practice the claimed invention. And, yes, she can sue a company, even a “good faith manufacturer,” that she believes is infringing her patent. Perhaps this explains the company’s efforts to change the patent laws.

That dichotomy also leaves Intel in a difficult position. The company must now reconcile its assurances that it seeks patent reform in order to foster innovation and to protect consumers with its alleged anti-competitive tactics, which the FTC claims has had precisely the opposite effect.

Color me skeptical.

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What good are patent method claims?

Wednesday, April 8th, 2009

Many inventors and companies wonder about the value of method claims in patent applications. Conventional wisdom holds that it’s typically harder to detect and to prove infringement of a method claim than it is for an apparatus or composition claim. Why, then, would you want to include such claims in an application directed at an apparatus/composition “invention?”

I can think of several reasons, but learned of another after reading the Federal Circuit’s decision in Crown Packaging Technology v. Rexam Beverage Can (08-1284). The district court had dismissed the defendant’s infringement counterclaim for failure to comply with the marking requirement of 35 U.S.C. § 287(a). The Federal Circuit reversed the dismissal on appeal, though, explaining that the marking statute was not applicable because the defendant had asserted only the method claims of a patent that included both method and apparatus claims:

“In this case and Hanson, the patentee only asserted method claims despite the fact that the patent contained both method and apparatus claims. In American Medical, in contrast, both apparatus and method claims of the ‘765 patent were asserted. Because Rexam asserted only the method claims of the ‘839 patent, the marking requirement of 35 U.S.C. § 287(a) does not apply. Consequently, we reverse the district court’s grant of Crown’s motion for summary judgment dismissing Rexam’s counterclaim for infringement of the ‘839 patent.” (emphasis added, internal quotations omitted, citation omitted)

A method claim, then, might preserve your ability to file an infringement claim when your marking practices have been less than perfect.

Reading the Crown Packaging Technology opinion gives you the sense that this might not always be the case. Judge Moore, the author of the opinion of the court, phrased the court’s holding – both in the opinion’s introduction and in the conclusion of the section relating to the marking issue – as one that is mandated by precedent:

“[B]ecause we are bound by our holding in Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075 (Fed. Cir. 1983)—that the marking requirement of 35 U.S.C. § 287(a) does not apply when only method claims are asserted—we reverse the district court’s grant of summary judgment dismissing Rexam’s counterclaim based on a failure to mark.” (emphasis added)

Judge Moore’s disagreement with the rule of Hanson is clear.

Read the PTP review of Crown Packaging Technology for a detailed analysis of the court’s opinion.

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