from the blog

The embedded patent attorney - what it means to me

There has been great discussion of late on the concept of the Embedded Patent Attorney (here, here, here, and here).  The EPA is a concept I’ve kept in my mind for years (I actually think the concept and the name itself was relayed to me by a client), but have never actually defined it.  I tried to write a one-sentence definition and failed.  I did, however, create the following lists of what an EPA is, and what an EPA isn’t:

An embedded patent attorney:

…is willing to continually and consistently invest his time to learn the business plan and objectives of his client

…manages the business knowledge he gains and applies it in his handling of the client’s legal matters (from claim drafting to license negotiations to litigation)

…provides valuable business information to the client regarding the intellectual property aspects of the client’s business climate (all done as part of his time investment)

…has a long-term outlook on the relationship with the client

…has or develops a passion for the client and the client’s industry  (I’ve seen this with ‘car guys’ in Detroit and ‘gene jockeys’ on the coasts — to effectively become embedded, I think the attorney must have passion; without it, he is unlikely to continually invest the required time)

…willing to put down the briefcase and roll-up his sleeves alongside the client’s inventive personnel (I’ve got great stories here…)


An embedded patent attorney is not:

…interested in billing every quarter hour of his time spent with/on a particular client (this kills it for oh so many reasons, cost being only one)

…someone with a huge “book of business” or a desire to build such a book (by definition, an attorney can truly be embedded with only a small number of clients.  Note, though, that attorneys with a large book can effectively be embedded with a small number of clients and have other attorneys become embedded with his other clients.  For this to work, the attorney must recognize his inability to become embedded with new clients and ensure that someone else at his firm is doing it.  This is truly a rare bird in law firms.  I’ve seen one.)

…someone with a big ego (see the briefcase/sleeves point in the first list)

I think these lists, together, provide a working model for the EPA concept.  I’m still working on the one-sentence definition.  Of course, the ‘P’ from EPA could really be any specialty…I’m just partial to patent attorneys.

U.S. Chamber of Commerce - India's Patent Regime Not About Access to Medicine

The Hindu: India patent regime not about access to medicine: US body

No surprise, considering Indian drug companies have enjoyed the best of both worlds for quite some time.



The Federal Circuit’s American Chef opinion - a reminder to update valuation analyses

The Federal Circuit's opinion in American Chef v. Lamb-Weston is a favorite of mine for illustrating the tricky business of patent valuation. At issue in the case is the proper interpretation of a claim limitation that requires "...heating the dough to a temperature...." The patentee asked the court to apply a claim interpretation that essentially changed the word "to" to "at". The patentee wanted the claim to read "...heating the dough at a temperature..." because heating dough to the specific temperature range recited in the claim would burn it to a crisp. The defendent, for obvious reasons, was not performing such a heating step.

As a claim interpretation case, American Chef is not necessarily suprising. So, what does the case have to do with patent valuation? It's a reminder that, as with cooking, timing is critical.

When the opinion issued in 2004, it had the potential to limit the scope of any issued patent claim that includes a "heating to..." step. While each patent is its own universe and a full legal analysis is necessary to determine whether a claim does or does not read on a particular product or process, decisions like American Chef lurk in the legal texts awaiting unsuspecting patent claims.

Most importantly, though, these decisions can be handed down at any time and apply to all issued patents. American Chef reminds us that the law of claim interpretation, and thus patent valuation, changes frequently. At its best, the legal component of a valuation analysis is a snapshot of the value of a patent. It represents a single point in a time continuum. Ideally, for important patent valuations, you should watch the whole movie, or at least flip through several snapshots. The analysis should be treated as fungible, and should be updated as appropriate.

Image: Frau beim Brotbacken (Woman Baking Bread) by Jean-François Millet (1854) (public domain; seeçoisMillet(II)_005.jpg for copyright information)

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

Despite its massive size, budget and complex regulatory framework, the United States 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 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.


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 website. 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 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.

Allowance rates at all three Trilateral Patent Offices below 50%

Yesterday, the European Patent Office announced that its grant rant dropped - for the first time since the Office opened in 1978 - to below 50%. IAM Magazine was quick to notice that this places the allowance rates of all three trilateral offices - the United States, Europe, and Japan - below 50%.

Patent and Trademark Office closed on Monday, December 21, 2009 due to snow storm

The Office of Personnel Management is reporting that all federal agencies in the Washington, D.C. area will be closed tomorrow, December 21. There is no reason to expect that this won't apply to the Patent and Trademark Office.

Adjust your Christmas week work schedule accordingly.

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

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 table on page 45 of the Report, seems to indicate that $118M was left...on the proverbial 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.

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

The 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.

The PTO predicament - keeping up with constant change on a grand scale

It goes without saying that the constant training of the Examining corps on the latest developments in patent law is a near impossible task.

Consider the following from a 1995 USPTO press release:
The U.S. Patent and Trademark Office is developing new guidelines that will govern the examination of patent applications on computer software inventions, the agency announced.

The guidelines are being developed in response to recent judicial decisions that suggest a trend toward increasing the eligibility of computer software-based innovations for protection under U.S. patent laws, while decreasing the availability of protection for certain aspects of computer programs under the copyright process, the PTO said. At the same time, the Office announced that it is reconsidering its position in a number of pending appeals concerning software-related cases, including In re Beauregard, which involves a computer program stored on a computer readable medium such as a floppy disk.

"The PTO must keep its practices consistent with judicial interpretations of the law. A failure to do so could jeopardize effective intellectual property protection for one of our nation's most important industries," said Nancy Linck, PTO's solicitor.
Fast forward to last year and the Federal Circuit's decision in In re Bilski...and you can appreciate the problem. In 1995, the Office had to prepare for caselaw developments that were increasing the patentability of software-based inventions. Now, just fifteen years later, the Office is preparing the corps to examine applications in the face of a sternly downward trend.

Like it or not, modern patent law is characterized by constant change. While we all struggle to stay current in this fast-paced area of law, we have to acknowledge that the Office has an additional challenge in its efforts to keep up with constant change: volume.

While we're struggling to train ourselves and our teams, the Office is dealing with thousands of Examiners and hundreds of thousands of applications. It's a grand scale faced by no other entity.

Why bring this up now? Simple....patent reform and patent quality.

The reform debate will be heating up again in coming months. With any luck, the patent community will pay attention to the patent quality issue and the need for reforms that support it. If we begin to acknowledge the predicament faced by the Office, maybe we can start helping it meet the challenge.

Kappos on patent reform - legislation will absolutely reduce application pendency

Looking at the recent decline in patent applications from US businesses, this CNNMoney article claims that innovation is the latest victim of the recession.

The article examines several peripheral issues related to the decline in filings, including the application backlog at the Patent and Trademark Office. Calling it a "vicious cycle," the article notes that the backlog operates to "further discourage patent filers."

Pointing to the pending patent reform legislation, USPTO Director David Kappos offers a fix:
"If we're able to get patent reform through, we absolutely can take processing times way down and get innovations through to the marketplace." (emphasis mine)

The article even notes the Director Kappos thinks the legislation could "help reduce the average wait time to as little as one year."