As I previously pointed out, there are three proposed rules in the USPTO’s patent trial proceedings rules package that raise concerns and should be dropped. Public comments on these proposed rules were due April 9-10, 2012. Now that the public has spoken, let’s take a look at what people had to say about these three specific proposals.Continue reading this entry
The deadline for submitting public comments on the USPTO’s proposed rules for patent trial proceedings is next week, April 9 and 10, 2012. Specifically, public comments on the seven Federal Register notices containing the USPTO’s rulemaking proposals are due as follows:
- Rules of Practice for Trials before the Patent Trial and Appeal Board and Judicial Review of Patent Trial and Appeal Board Decisions—public comments due April 9, 2012;
- Practice Guide for Proposed Trial Rules—public comments due April 9, 2012;
- Changes to Implement Inter Partes Review Proceedings—public comments due April 10, 2012;
- Changes to Implement Post-Grant Review Proceedings—public comments due April 10, 2012;
- Changes to Implement Transitional Program for Covered Business Method Patents—public comments due April 10, 2012;
- Transitional Program for Covered Business Method Patents—Definition of Technological Invention—public comments due April 10, 2012;
- Changes to Implement Derivation Proceedings—public comments due April 10, 2012.
In a Federal Register Notice issued December 28, 2011, the USPTO announced that it is considering changes to the Patent Term Adjustment (PTA) rules relating to “appellate review by the Board.” I have written previously about the post-Notice of Appeal gap left by the current PTA rules, and believe that these new proposed changes would go far to close that gap, although they will not benefit all applications on appeal. The USPTO will accept written comments on these proposed rule changes through January 27, 2012. Continue reading this entry
I was co-chair of last week’s IPO PTO Day conference, and it was a great event. The program included several speakers from the USPTO, including Commissioner for Patents Bob Stoll, Deputy Commissioner for Patents Peggy Focarino, Chief Administrative Patent Judge James Smith, Vice Chief Administrative Patent Judge James Moore, and Administrative Patent Judge Michael Tierney. Director Kappos gave the luncheon address. Here are some interesting tidbits of the information that they shared.
The USPTO’s final Rules of Practice Before the Board of Patent Appeals and Interferences in Ex Parte Appeals includes new rules relating to new grounds of rejection on appeal, and new guidance on what constitutes a “new” ground of rejection in an Examiner’s Answer. Although the new rules only apply to cases in which a Notice of Appeal is filed on or after January 23, 2012, the guidance is based on older Federal Circuit and CCPA decisions (and in accord with the recent Federal Circuit decisions in In Re Leithem, In Re Stepan Co. and cases cited therein) and so should be applicable now.
On November 22, 2011, the USPTO issued its final changes to the Rules of Practice Before the Board of Patent Appeals and Interferences in Ex Parte Appeals. The new rules will apply to all cases in which a Notice of Appeal is filed on or after January 23, 2012. Here, I review some of the key changes embodied in the new rules.Continue reading this entry
Barely two weeks after vacating the decision of the USPTO Board of Patent Appeals and Interferences in In re Leithem as being based on a new ground of rejection, the Federal Circuit took similar action in In Re Stepan Co. While the Board in Leithem had relied on different characterizations of the cited prior art references, the Board in Stepan had discredited a Rule 1.131 Declaration that the Examiner had not questioned on the merits. Hopefully the Board will take these decisions seriously and reverse examiner rejections it finds inadequate instead of trying to reformulate them on appeal.
The recent Federal Circuit decision in In re Leithem highlights what some practitioners believe is a growing problem with decisions from the USPTO Board of Patent Appeals and Interferences: the Board’s practice of “affirming” a rejection based on a new ground of rejection. The court soundly criticized this practice when it vacated and remanded the Board decision “to allow appellants a full opportunity to respond to the new rejection.”
The USPTO Board of Patent Appeals and Interferences is revisiting the balance between 35 USC § 112 and 35 USC § 121, and their interplay in the context of single claim restriction requirements. While many practitioners believe that binding case law decides this issue against the practice of single claim restrictions, the Board appears to be looking for a way to draw the line where the claims at issue are “conservatively” estimated to encompass “in excess of 400 billion” compounds.
The recent Federal Circuit decision in In re Huai-Hung Kao addressed obviousness rejections in three separate patent applications assigned to Endo Pharmaceuticals, Inc. The court affirmed the Board’s rejections in two of the applications, but vacated and remanded in the other application. This article looks at the court’s finding in that application that the rejection was “based . . . on factual findings lacking in substantial evidence,” and also discusses the court’s commentary on the “nexus” requirement for secondary evidence of non-obviousness, including unexpected results and commercial success.
In In re Glatt Air Techniques, Inc., the Federal Circuit reversed a decision of the U.S. Board of Patent Appeals and Interferences that held a claim obvious. The decision is remarkable in that it overturned the Board under the deferential "substantial evidence" standard, and found that the USPTO had not even established a prima facie case of obviousness. The court also criticized the Board for dismissing the applicant’s evidence of commercial success because it only related to one embodiment of the claims.
The claim at issue originally was granted as claim 5 of U.S. 5,236,503. That patent underwent ex parte reexamination, which led to the obviousness rejection.
The invention relates to fluidized bed coaters for applying a coating to particles, such as pharmaceutical ingredients. In so-called Wurster coaters, the particles are introduced into a chamber where they circulate in the path of the coating material which is sprayed from nozzle. Figure 1 of the ’503 patent is reproduced below.
The invention addressed the problem of particle agglomeration that "occurs because the circulating particles prematurely enter the stream of coating spray before the spray pattern has fully developed." The invention solves this problem by "shielding the coating spray nozzle to prevent the particles from entering the spray prematurely."
Claim 5 recites the invention in "Jepson" format, with the preamble defining the prior art:
5. In a fluidized bed coater having a product container opening upwardly into an expansion chamber and downwardly into a lower plenum chamber through an air distribution plate/screen having openings formed therethrough for upward air flow from said lower plenum chamber into said product container, said product container including a substantially cylindrical partition spaced above said air distribution plate/screen for defining an inner upbed area and an outer downbed area, and an upwardly discharging spray nozzle mounted substantially centrally within said cylindrical partition, the improvement comprising shielding means positioned adjacent said spray nozzle for shielding the initial spray pattern developed by said nozzle against the entrance of particles moving upwardly through the upbed.
The claim uses "means-plus-function" language to recite the novel aspect of the invention. Thus, in accordance with 35 USC § 112, ¶6, this claim element is construed with reference to the specification of the ’503 patent, which teaches that a "cylindrical partition" or "air wall or stream" can perform the shielding function.
The Obviousness Rejection
During the reexamination proceeding, claim 5 was rejected as being obvious in view of the prior art recited in the preamble of the claim (the non-bolded portion above) and German Patent DE 3323418 (Naunapper). An English translation of Naunapper was made of record during the reexamination proceeding.
Naunapper describes fluidized bed coaters with sensors that monitor gas flow to detect particle agglomeration. Naunapper teaches that agglomerates can be removed by "blowing through" with increased air flow.
The examiner asserted that Naunapper’s air flow read on the "shielding means" of claim 5.
The Federal Circuit summarized the Board’s grounds for affirmance:
[The Board] found that Naunapper "plainly teaches an arrangement that can provide . . . an air wall or stream surrounding the [coating spray] nozzle to address the same or similar problem discussed in the ’503 Patent,” and concluded that the arrangement described in Naunapper “would inherently or necessarily be capable of performing the same function recited for the claimed ‘shielding means.’”
The Substantial Evidence Standard
The Federal Circuit reviews the Board’s factual findings—such as its interpretation of a prior art reference—under the "substantial evidence" standard. This is a rather deferential standard that requires the court to consider the evidence on both sides and uphold the finding "if a reasonable mind might accept the evidence as adequate to support the Board’s factual conclusions."
The Non-Obvious Difference Between Prevention and Cure
The Federal Circuit agreed with the Board’s finding that "Naunapper teaches modulating gas flow in the coating apparatus to control particle agglomeration," but noted that "[i]t is readily apparent . . . that this technique does not shield circulating particles from entering the initial spray pattern."
The court recognized a distinction between Naunapper’s "way to remedy the blockage caused by particle agglomeration using bursts of air" and Glatt’s invention, which "prevents the agglomeration from occurring in the first place. The court found:
Naunapper’s air source can be used to (1) circulate particles and (2) clear blockages. The air source cannot perform both of these functions simultaneously, and more importantly, neither of these functions constitutes shielding.
The Federal Circuit therefore determined that the Board’s factual finding that Naunapper taught a "shielding means" was "not supported by substantial evidence." As such, the USPTO had "failed to make a proper prima facie case of obviousness."
The Evidence of Commercial Success
During the reexamination proceeding and Board appeal, the applicant cited evidence of commercial success to rebut the asserted obviousness rejection. The evidence pertained to the applicant’s commercial embodiment, which used a physical shield for the "shielding means."
Both the examiner and the Board rejected the evidence as being "not commensurate with in scope with claim 5," because the claim also encompassed embodiments where the shielding means was an air wall. The Federal Circuit rejected the USPTO’s position:
To the extent the PTO asserts that Glatt needed to submit commercial success evidence from multiple embodiments for that evidence to be commensurate in scope with claim 5, this position is not consistent with our precedent.
The court reasoned:
It seems unlikely that a company would sell a product containing multiple, redundant embodiments of a patented invention. The fact that Glatt’s commercial products only contain one type of shielding means does not make its commercial success evidence irrelevant.
Citing earlier Federal Circuit precedent, the court explained:
Commercial success evidence should be considered “so long as what was sold was within the scope of the claims.”
Could This Appeal Have Been Prevented?
I imagine that Glatt is satisfied with this decision, but I’m sure that it would rather not have had to pursue its appeal all the way to the Federal Circuit. When the court finds that it is "readily apparent" that the prior art does not teach what the USPTO says it taught, what more can or should the applicant have done during prosecution? Here, Glatt even submitted declaration evidence explaining Naunapper and the contribution of the invention, but the USPTO was not convinced.
The USPTO is developing and implementing new ways to measure and improve patent quality. Still, as long as rejections like this can make it past experienced examiners and the Board, it is applicants who bear the ultimate burden and expense of ensuring that patents that should be granted are granted.
The USPTO provided outcome statistics from the Pre-Appeal Brief Review program in the notice of proposed rulemaking for the proposed changes to ex parte appeal practice before the USPTO Board of Patent Appeals and Interferences. The data reveal mixed results, but are encouraging enough to justify the relatively low costs of the program.
The Pre-Appeal Brief Review Program
The Pre-Appeal Brief Review program was started as a pilot program in 2005. The program permits an applicant to obtain panel review of appealed rejections before an Appeal Brief is filed. The panel is made up of three examiners, including the examiner of record on the application.
According to the USPTO, an applicant should consider using the program "[i]f the applicant feels the rejections of record are clearly not proper and are without basis, . . . based upon a clear legal or factual deficiency in the rejections rather than an interpretation of the claims or prior art teachings."
A Request for Pre-Appeal Brief Review must be filed with the Notice of Appeal, and can include up to five pages of arguments against the rejections. No additional fee is required for this program. Thus, the costs of participating in the program are minimal, relating to the costs of preparing the brief summary of arguments.
The panel can reach one of four decisions:
- The application remains under appeal because there is at least one actual issue for appeal.
- Prosecution on the merits is reopened and an appropriate Office communication will follow in due course. In appropriate circumstances, a proposed amendment may accompany the panel’s decision proposing changes that, if accepted, may result in an indication of allowability for the contested claim(s).
- The application is allowed on the existing claims and prosecution remains closed.
- The request fails to comply with the submission requirements and is dismissed.
If the panel decides that the application should proceed to appeal on any rejection, the panel decision will not indicate whether it agreed with the applicant on any other issue. Thus, such a decision does not give the applicant any insight into the panel’s view of the strength of the applicant’s position on any individual rejections.
For applications that proceed to appeal, the Appeal Brief is due two months from the filing date of the Notice of Appeal or one month from the panel decision, whichever is later.
Appeal conferences are held in every appeal after a compliant Appeal Brief is filed, unless the examiner decides that the appeal should not proceed and a supervisory patent examiner (SPE) agrees.
The panel makeup for an appeal conference is similar to that for Pre-Appeal Brief Review, and includes the examiner of record, a SPE, and another examiner. The panel considers whether any or all of the rejections should be maintained.
The Examiner’s Answer reflects the outcome of the appeal conference, and may indicate that one or more rejections have been overcome. Alternatively, prosecution may be reopened or the application may be allowed.
In promulgating the new proposed appeal rules, the USPTO addressed the comments received in response to the December 22, 2009 Advance Notice of Proposed Rulemaking (ANPRM) relating to ex parte appeal practice. One comment requested statistics on the Pre-Appeal Brief program. The USPTO provided data for each full fiscal year (FY) since the program was launched, and also provided statistics from Appeal Conferences. The following chart (taken from the Federal Register notice) shows:
- The annual number of such requests.
- The percent of notices of appeal that contain a request
- The outcomes of the conferences
- A comparison of the outcomes of the Pre-Appeal Brief Conference to the Appeal Conference.
If an applicant files a Request for Pre-Appeal Brief Review in the hopes of having all rejections reversed, he is likely to be disappointed, as only 2-5% of Requests have that positive outcome.
On the other hand, nearly 40% of Requests result in prosecution being reopened, which suggests that at least some rejections are overcome or modified.
Still, slightly more than 50% of all Requests result in a determination that the appeal should proceed.
It is interesting to see that the percent of appeals in which Requests for Pre-Appeal Brief Review are filed has slowly but steadily increased each year. Still, usage is low (at about 33%), given the low costs of the program. This could be due to the complexities of the issues on appeal, a belief that the panel makeup is stacked against the applicant, the lack of information provided when the panel decides that the appeal should proceed, or a desire to expedite the appeal process.
Appeal Conferences are three times more likely to result in all rejections being reversed (15%). This is not surprising given that the Appeal Brief is likely to present the applicant’s position more thoroughly and with citations to legal authority, while a Request for Pre-Appeal Brief Review is limited to five pages of arguments regardless of the number of issues on appeal.
What is more concerning is the steady drop in the Appeal Conference reversal rate since 2002, with the current reversal rate being less than half that of the 2002 rate (34%). This could be due to stronger rejections, but recent statistics from the Board still show about a 30% reversal rate, with a further 14.5% of cases being reversed-in-part.
If barely 5% of Requests for Pre-Appeal Brief Review result in the rejections being reversed, why should an applicant participate in the program? Looking at the statistics from a different perspective, they indicate that in 44% of the cases prosecution is advanced in some way, with prosecution being reopened even if not all rejections are reversed. Given the inexpensive and simple procedures of the program, even a low success rate can be worth the costs.
Earlier this week I wrote about the patent-eligibility decision from the USPTO Board of Patent Appeals and Interferences in In re Kelkar. While reviewing the prosecution history of the appeal, I was struck by the number of times the Appeal Brief was “bounced” for failing to comply with one or more requirements of 37 CFR § 41.37. The USPTO recently transferred responsibility for reviewing briefs for compliance with these rules from the examiner to the Board, but this case illustrates just how unreasonable and dilatory the appeal brief review process could be.
Last week the USPTO unveiled its new “Data Visualization Center” which provides patent application pendency, backlog and examination data in a graphic “dashboard” format. While not as fancy, the Board of Appeals and Interferences also has published graphic data on its workload, with monthly statistics from May 2010 to August 2010. The Board’s data show that its backlog continues to grow at a tremendous rate, while its overall reversal rate for the current fiscal year (which ends at the end of September) is about 29%.