The End of the IPIP Blog, and Going in a New Direction

© 2009 Christopher Paul Mitchell

This blog is definitely what many would call an occational blog.  While I have enjoyed toying with the blogging concept, I believe my time would be better spent going in a new direction – providing even more value to direct clients.  And so, I am discontinuing this blog in favor of integrating more client-resources with my firm’s website, accessible at www.mitchellip.com.   It has been a fun couple of years, and I am sincerely grateful to those who have authored articles for the IPIP Blog.

The Legal Rebels Project

© 2009 Christopher Paul Mitchell

The American Bar Association (ABA) Journal has announced an interesting new project featuring those willing to take chances on new ways of practicing law. And, based on my review, these are truly novel approaches! As stated in the announcement:

Over the course of the next three months, we’ll be profiling 50 of the profession’s leading innovators at http://www.legalrebels.com . The first seven profiles, along with videos and audio slideshows that illustrate the changes they’re trying to make in the practice of law, are now online. We’ll be adding at least three new profiles to the site every week until Thanksgiving.

Check out http://www.legalrebels.com .

Over the course of the next three months, we’ll be profiling 50 of the profession’s leading innovators at http://www.legalrebels.com . The first seven profiles, along with videos and audio slideshows that illustrate the changes they’re trying to make in the practice of law, are now online. We’ll be adding at least three new profiles to the site every week until Thanksgiving.

Strategies for Arguing Against 101 Rejections of Software-Based Method Claims in Light of In Re Bilski

© 2009 Michael A. Leonard II

Introduction

On October 30, 2008, the Court of Appeals for the Federal Circuit (CAFC) decided In re Bilski, which pertains to the eligibility of method claims as statutory subject matter under 35 U.S.C. § 101.  This case significantly modified the standard for evaluating subject matter eligibility with respect to method claims.  In this decision, the CAFC held that a “claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus or (2) it transforms a particular article into a different state or thing.  See Benson, 409 U.S. at 70 (‘Transformation and reduction of an article ‘to a different state or thing’ is the clue to patentability of a process claim that does not include particular machines’)” (see Slip op. at 10 and 11 (Fed. Cir. 2008)).  In other words, Applicants have two options with respect to writing statutory method claims: (1) either recite in the claims that the steps thereof are performed by a specific machine or apparatus; or (2) argue that a transformation takes place in the method.

Tying method claims to a specific machine or apparatus may unduly limit the claim scope, depending on what is claimed.  For instance, if Applicants choose to tie the claims to a “computer” or a “processor,” certain otherwise-infringing devices may be deemed not to fall under the scope of the claims.  For instance, with respect to a computer, a PC and a laptop are likely to qualify, but what about PDAs, cell phones, tablet devices and other electronic devices that are becoming increasingly capable of carrying out the functions typically associated with a computer?  With respect to a “processor”, such a feature may run the risk of characterization as the general CPU of the device.  If certain features are carried out by a subcontroller or some other non-CPU device that performs logical operations, a Court may potentially deem such features not to be performed by a “processor.”  While new applications may be written to include such devices in the scope of a computer, a processor, or whatever structure is chosen (after all, an Applicant can be his or her own lexicographer), existing applications do not share this luxury.

Further, In re Bilski has left the determination as to whether tying features of a method claim to a “general purpose computer” is sufficient to tie the claim to a particular machine or apparatus for a future decision.  As Judge Newman noted in her dissent in In re Bilski, “[w]e aren’t told when, or if, software instructions implemented on a general purpose computer are deemed ‘tied’ to a ‘particular machine,’ for if Alappat’s guidance that software converts a general purpose computer into a special purpose machine remains applicable, there is no need for the present ruling” (see Judge Newman’s dissent in the Slip op. at 35 (Fed. Cir. 2008)).  With such potential limitations to claim scope and the specter of a potential decision disqualifying a general purpose computer as a sufficient machine or apparatus in the future, it may be preferable to argue that software-based method claims qualify as statutory subject matter under the second prong of the In re Bilski test − namely, that the features recited in software-based method claims transform an article.

The “Transformation” Prong

With respect to the transformation of prong (2), In re Bilski elaborated on the requirements for meeting the second prong of the Benson test.  First, the transformation “must be central to the purpose of the claimed process” (see Slip op. at 10 and 11 (Fed. Cir. 2008)).  The CAFC held this means that the transformation in question must “impose meaningful limits on the claim’s scope” and not “be insignificant extra-solution activity” (Id.).  Generally, the active verb at the beginning of a step in a method claim, such as “prioritizing”, “allocating”, “fetching”, “storing”, “receiving”, or the like, will limit the claim and be important for the claimed invention (otherwise, such limitations should probably not be included in the claim).  Thus, the operations of such active verbs should be deemed to be substantially central features to their respective claims and do not constitute extra-solution activity as they are arguably at the heart of the claimed subject matter.

Second, the CAFC held that the transformation only qualifies as patent-eligible subject matter if it transforms a certain type of “article.”  “[T]he main aspect of the transformation test that requires clarification here is what sorts of things constitute ‘articles’ such that their transformation is sufficient to impart patent-eligibility under § 101” (Id. at 24 and 25).  The majority in the In re Bilski decision stated that “[t]he raw materials of many information-age processes, however, are electronic signals and electronically manipulated data” and that “[s]o long as the claimed process is limited to a practical application of a fundamental principle to transform specific data, and the claim is limited to a visual depiction that represents specific physical objects or substances, there is no danger that the scope of the claim would wholly pre-empt all uses of the principle” (see Id. at 25 and 26).  However, claiming a “visual depiction” of data representing physical objects is not within the scope of many software inventions.

It appears that the CAFC is primarily concerned about Applicants claiming all practical uses of a scientific principle.  “Diehr can be understood to suggest that whether a claim is drawn only to a fundamental principle is essentially an inquiry into the scope of that exclusion; i.e., whether the effect of allowing the claim would be to allow the patentee to pre-empt substantially all uses of that fundamental principle.  If so, the claim is not drawn to patent-eligible subject matter” (Id. at 8 and 9).  In the decision, the CAFC appears to take the position that all software methods are directed to algorithms.  However, this is not the case, as claims may include features such as which data is to be stored, i.e. the content of a packet header or the like.  Clearly, a data structure is not an algorithm.  However, rather than embarking down the slippery slope of arguing whether the data in software claims conforms with the aforementioned requirements, it may be more effective to argue that a physical device is transformed − namely, memory.

Transforming Memory

Because software inherently requires some form of storage in order to be executed by a device (otherwise, said software exists in the abstract only and is not patent-eligible subject matter), such as RAM, cache memory, hard disk, tape drive, optical drive, etc., a practitioner can argue that the method steps cause memory to undergo a physical transformation without creating prosecution history estoppel that would be useful to an adverse party.  Thus, arguing something similar to the following in Responses traversing an In re Bilski-based rejection under 35 U.S.C. § 101 may be helpful.

In the context of a network system such as that described in some embodiments in the present specification, Applicants submit that a person of ordinary skill in the art would readily appreciate that practicable embodiments of the claimed invention would be conducted with the aid of a computing machine, such as a server.  Such computing machines are commonly understood to have memory.  Further, the operations recited in the claims clearly change the state of the underlying data since the cache, register, or other memory on which the data is stored must be transformed to have a different magnetic polarity, electrical charge, or the like depending on the technology that is used.  These are real physical changes.  Further, memory is a real physical article.  As such, Applicants submit that the method claims perform a transformation under the “machine or transformation” test and thus qualify as patent-eligible subject matter.

It will likely be difficult for an Examiner to find any legal evidence in support of an argument that state changes in memory do not qualify as physical transformations, and the majority in In re Bilski did not take such a position.  An alternative interpretation is unreasonable since a transformation of memory is necessary for machine-executable code to be executed by a device.

Conclusion

In sum, it is inherent that practical applications of software-based inventions physically transform some type of memory.  Accordingly, Applicants may choose to argue that their software-based method claims comply with the transformation prong when presented with a 35 U.S.C. § 101 rejection referring to In re Bilski.  Dissenting judges alleged flaws in the majority’s reasoning in In re Bilski, and Judge Newman’s dissent is very well-reasoned, logical and persuasive.  We note that the United States Supreme Court may decide to hear the case and eventually modify or overturn the CAFC’s decision.  Nonetheless, In re Bilski establishes new law with respect to method claims that will have to be addressed in many cases, at least for the foreseeable future.

Top Corporate Patent Winners for 2008 Announced

© 2009 Christopher Paul Mitchell (Chris)

According to this press release by IFI Patent Intelligence, IBM continued in 2008 as the top corporate assignee of granted patents. The top five corporate assignees were:

1. 4,186 – International Business Machines Corp.
2. 3,515 – Samsung Electronics Co. Ltd. (KR)
3. 2,114 – Cannon K K (JP)
4. 2,030 – Microsoft Corp.
5. 1,776 – Intel Corp.

Practitioners – Are you caught in the Legal Recession?

© 2008 Christopher Paul Mitchell

The American Bar Association (ABA) Journal is doing a survey regarding the current legal recession. Specifically, they are seeking your perspectives about the current state of the legal economy. I personally am hoping this will be a great time for small firms and solo practitioners. What do you think? Take the survey here:

http://www.surveymonkey.com/s.aspx?sm=9Dhw2g7bX_2bxfq4mW8eB1Cg_3d_3d

Innovation International Americas Offers IP Owners Key Insights and Best Practices for IP Commercialization

(press release)

New York (September 4, 2008) – The road from invention to commercialization can be a difficult one to navigate. To help IP owners overcome the many challenges lining that path, experts from Innovation International Americas (IIA) have developed a set of best practices uniquely designed to meet the needs of inventors, technology transfer offices, and IP practitioners.  With offices in New York City and the Bay Area serving the global intellectual property community, IIA focuses on streamlining the exchanges between intellectual property owners and organizations seeking to commercialize their IP, enhance their IP portfolios, boost product development strategies, strengthen their position in the marketplace and maximize the return on their IP portfolio investment.

“Based upon our team’s collective expertise, numerous conversations with experts in the field and extensive research, we discovered that the individuals behind inventions are oftentimes ill-equipped to address the pragmatic concerns of potential licensees for their IP,” commented Douglas Adams, vice president of technology commercialization at IIA. “The real-world benefits of new technology can get lost in translation when a technically-savvy inventor attempts to communicate them to a product development or marketing executive, for instance.”

With that in mind, IIA executives offer clients three essential tips for the successful commercialization of IP:

1. Know the marketplace. Who are your competitors both market-wise and research-wise? So many times inventors have met their competitors but haven’t focused on licensing. Nurture those relationships.
2. Highlight the advantages. Inventors often take for granted the advantages of their invention, but they make all the difference in the world when they’re talking to the marketplace. You should also evaluate advantages that might exist for your IP in entirely different marketplaces.
3. Speak the right language. If you’re too technical in your pitch, you risk losing the interest of business development, licensing or technology transfer departments. Inventors and IP owners love to talk about their technology using scientific terms, but business people often don’t understand those terms. To complicate things even further, there may be a cultural or language gap. Find someone to bridge that gap. Outside companies like IIA can help translate your invention into market language.

About Innovation International Americas
Based in New York City and the Bay Area, Innovation International Americas (IIA) is a premier provider of IP commercialization services to companies and academic institutions. IIA offers a full suite of services to help customers maximize the value of their companies, generate and maintain revenue streams, as well as continue to foster innovation. IIA services include IP marketing, in/out licensing, IP valuation and IP assessment. For more information visit http://www.iiaip.com.

Post-Medinol Filing Considerations

© 2008 Jeremy J. Thornton

The Trademark Trial and Appeal Board’s litany of holdings in Medinol¹ and its progeny make clear that material misrepresentations made during the course of prosecuting or maintaining trademark registrations can result in serious consequences, including the cancellation of any involved registrations on the ground of fraud.  Given the TTAB’s increasingly hard-line stance on the issue of fraud, trademark owners and practitioners should consider taking additional steps to avoid future inaccurate statements and minimize the potential impact of any inaccurate statements made in the past.

Review and Document

Before submitting any filing supported by a declaration,² carefully review the identification of goods and services identified in the filing.  Parse out the identification into an item-by-item checklist and then obtain documentation (e.g., a photograph of the mark applied to the goods or an actual advertisement showing the mark in connection with the relevant services) for each individual item specified in the list.  This documentation should be kept as a permanent part of the trademark file.  If there are any goods or services identified in a filing that are not in use in commerce as of the signing date of the declaration, revise the filing accordingly before submission to ensure that the list is accurate.

Audit

Conduct an audit of the key trademark registrations within a trademark owner’s portfolio.  Review all filings involving identifications of goods and services that are supported by a declaration.  For each of these filings, make an item-by-item checklist of the identification of goods and services and attempt to verify the accuracy of the declaration.  For example, to confirm the accuracy of a declaration supporting a Statement of Use signed on March 1, 2000, for an application covering “hats, mittens, and scarves,” a trademark owner must have been using the mark in commerce for each of the three items in the application on March 1, 2000.  If there is reason to believe that a declaration supporting any of the filings is inaccurate, consider filing an additional application as a “safety net.”³

Strategic Filing

In some cases, a trademark owner may offer one or more “core” products or services that it anticipates providing indefinitely, but may also use its mark for a variety of other goods and services that change from time to time.  In such situations, it may be desirable to file one application covering the core products or services, and one or more additional applications for secondary products and services, especially where there is an extensive and changing list of secondary products and services.  By compartmentalizing the core products or services separately from secondary products and services, even if the registration for the secondary products and services were to be cancelled as a result of a fraudulent declaration, the owner would be able to maintain its registration for its core products or services without fear of challenge on the basis of a fraudulent declaration.

Similarly, where a trademark owner offers products or services that fall in multiple international classes, it may be desirable to file a separate application for each class, rather than combining multiple classes in a single application.  By taking this approach, a fraudulent declaration that would ordinarily render an entire multiple-class registration vulnerable to cancellation would instead impact only the goods or services within the single class covered by the registration.

Now more than ever, trademark owners cannot afford to be inattentive to factual representations made during the prosecution and maintenance of their trademark applications and registrations.  By implementing these and other common-sense measures, trademark owners and practitioners can help to safeguard their trademark portfolios vulnerability to attack on the basis of fraudulent misrepresentations.

¹ Medinol Ltd. v. Neuro Vasx, Inc., 67 USPQ2d 1205 (TTAB 2003).  Medinol found fraud based on a trademark owner’s declaration that it was using its mark on all of the goods identified in its registration when, in fact, it was only using its mark on some of those goods.  As a consequence of this misrepresentation, the TTAB ordered the entire registration at issue cancelled.

² Examples of such filings include: (1) statements of use, (2) statements of continued use for listed goods/services in Section 8 Declarations and Section 9 Renewal Applications, and (3) statements of continuous use for five years for listed goods/services in Section 15 Declarations.

³ See Trademark Manual of Examining Procedure §703 regarding the prohibition against duplicate registrations for guidance when preparing additional “safety net” applications.

Top Corporate Patent Winners for 2007 Announced

© 2008 Christopher Paul Mitchell (Chris)

According to this press release by IFI Patent Intelligence, IBM continued in 2007 as the top corporate assignee of granted patents. The top five corporate assignees were:

1. 3,148 – International Business Machines Corp.
2. 2,725 – Samsung Electronics Co. Ltd. (KR)
3. 1,987 – Cannon K K (JP)
4. 1,941 – Matsushita Electric Industrial Co. Ltd. (JP)
5. 1,865 – Intel Corp.

Comments On And Practical Suggestions For Improved After Final Practice

© 2007 Michael E. Kondoudis,
www.patentablydefined.com

This post concerns “after final practice,” that is, practice after a final Office Action has been issued in an application. A brief survey of some basics of after final practice follows, along with some suggestions, sample paragraphs, and practice tips for after final practice.

Prosecution After Final Rejection is Restricted

The most significant aspect of after final practice is that it is restricted. Once a final Office Action has issued, an Applicant is no longer entitled to further unrestricted prosecution on the merits, as a matter of right. This is the result of the Office’s policy of compact prosecution, which is discussed here.

The restricted nature of after final practice has some not insignificant ramifications. For example, the amendments in an Amendment After Final are actually proposed changes to that application, except in limited circumstances. And, entry of those proposed changes is generally at the Examiner’s discretion, with direction from Patent Office regulations and guidance from the Manual of Patent Examining Procedure (MPEP).

The Regulations and the MPEP

The regulations and the MPEP establish a conceptual hierarchy for the entry of after final responses. Section 714.13 of the MPEP, entitled “Amendments and Other Replies After Final Rejection or Action,” provides that

[e]xcept where an amendment merely cancels claims, adopts examiner suggestions, removes issues for appeal, or in some other way requires only a cursory review by the examiner, compliance with the requirement of a showing under 37 CFR §1.116(b)(3) is expected in all amendments after final rejection.

And, 37 CFR §1.116(b)(3) requires a showing of “good and sufficient reasons” why the amendment after final rejection is (1) necessary and (2) was not earlier presented. In this regard, the MPEP instructs that a “refusal to enter the proposed amendment should not be arbitrary” and that it should be given “sufficient consideration to determine whether the claims are in condition for allowance and/or whether the issues on appeal are simplified.” MPEP 714.13(II).

Part (b) of 37 CFR §1.116, entitled “Amendments and affidavits or other evidence after final action and prior to appeal” provides that

(b) After a final rejection or other final action … in an application … :

(1) An amendment may be made canceling claims or complying with any requirement of form expressly set forth in a previous Office action;

(2) An amendment presenting rejected claims in better form for consideration on appeal may be admitted; or

(3) An amendment touching the merits of the application or patent under reexamination may be admitted upon a showing of good and sufficient reasons why the amendment is necessary and was not earlier presented.

Unfortunately, neither the MPEP nor 37 CFR 1.116 provide any examples, standards, or other guidance as to what constitutes “good and sufficient reasons.” And, this is a significant standard. Indeed, the Patent Office’s own electronic filing system (EFS-Web) tutorial wholly ignores the possibility of the existence of “good and sufficient reasons,” advising that an Amendment After Final “will not be entered if it requires an additional search or more than a cursory review.”

Additionally, section 714.13 (II) of the MPEP instructs Examiners to advise an Applicant when: (1) certain portions of the amendment would be acceptable as placing some of the claims in better form for appeal or complying with objections or requirements as to form, if a separate paper were filed containing only such amendments; and/or (2) proposed amendment(s) to some of the claims would render them allowable.

The After Final Hierarchy

The foregoing regulations and MPEP guidance establishes the following hierarchy:

1. Responses After Final that cancel claims or amend an application to address a formal requirement made earlier (e.g., adopting Examiner suggestions) are entered as a matter of right. No showing of “good and sufficient reasons” is required.

2. Responses After Final that require only a cursory review by the Examiner (e.g ., removing issues for appeal or presenting rejected claims in better form for appeal) may entered at the non-arbitrary discretion of Examiner with or without a showing of “good and sufficient reasons.”

3. Responses After Final that “touch on the merits” or otherwise do not require “only a cursory review by the Examiner” (e.g., necessitating further search) may be entered at discretion of Examiner with a showing of “good and sufficient reasons.”

In view of this hierarchy, it would appear to be a better practice to prepare after final responses that appeal to the discretion of the Examiner, when they are not to be entered as a matter of right. Such responses would ideally reflect the restricted nature of after final practice, satisfy the requirements of the relevant rules, and reflect the MPEP’s guidance, so as to maximize the likelihood of entry.

Suggestions

The following are examples of suggested modifications tailored for after final practice, including some examples of paragraphs to consider including in after final responses to maximize the likelihood of their entry.

1. Acknowledge The Restricted Nature Of After Final Practice And Ask The Examiner To Exercise His/Her Discretion To Enter Your Response

One way to accomplish this might be to begin an after final response with a paragraph like the following:

In response to the final Office Action mailed April 5, 2007, and having a period for response set to expire on July 5, 2007, Applicant respectfully requests that the Examiner amend the present application in the manner set forth in this Amendment.

Or alternatively,

In response to the final Office Action mailed April 5, 2007, and having a period for response set to expire on July 5, 2007, Applicant respectfully requests that the Examiner favorably consider the following remarks.

2. Determine Where A Reply After Final Rejection Should Be Categorized In The Hierarchy And Expressly Explain Why The Reply Should Be Entered

For example, an Amendment After Final that addresses formal matters raised by an Examiner should be entered as a matter of right. So, an appropriate explanation might be:

Applicant submits that this Amendment After Final Rejection only addresses formal matters raised a previous Office Action. Accordingly, Applicant is entitled to entry of this Amendment as a matter of right under 37 C.F.R. §1.116 (b)(1).

When an Amendment arguably places the application in better form for appeal, an appropriate explanation might be:

Applicant submits that this Amendment After Final Rejection at least places this application in better form for appeal. Applicant respectfully submits that this Amendment should only require a cursory review because the claim amendments presented herein do not add any new features and/or do not significantly alter the scope of the claims. Consequently, the claim amendments should not require any further search by the Examiner. This Amendment is necessary as it clarifies and/or narrows the issues for consideration by the Board and was not earlier presented because Applicant believed that the prior response(s) placed this application in condition for allowance, for at least the reasons set forth in those response(s). Accordingly, entry of the present Amendment, as an earnest attempt to advance prosecution and/or to reduce the number of issues, is requested under 37 C.F.R. §1.116.

When an Amendment touches on the merits, an appropriate explanation might be:

Applicant submits that this Amendment After Final Rejection places this application in condition for allowance by amending claims in manners that are believed to render all pending claims allowable over the cited art and/or at least place this application in better form for appeal. This Amendment is necessary because … and was not earlier presented because Applicant believed that the prior response(s) placed this application in condition for allowance, for at least the reasons discussed in those responses. Accordingly, entry of the present Amendment, as an earnest attempt to advance prosecution and/or to reduce the number of issues, is requested under 37 C.F.R. §1.116.

Of course, this type of paragraph should be modified to articulate the particular “good and sufficient” reason(s) specific to a particular application.

3. Include An Express Request For The Specific Notice That MPEP §714.13 Instructs Examiners To Provide An Applicant

For example

In the event that the Office declines to enter the present Amendment, and (i) any portion of the present Amendment would place some of the claims in better form for appeal if a separate paper were filed containing only such amendments or (ii) any proposed amendment to any claim would render that claim allowable, Applicant respectfully requests that the Office inform Applicant of the same pursuant to MPEP §714.13.

4. File After Final Responses Electronically

Filing electronically avoids the delay between the time documents are received by the Patent Office and the time they are converted and placed into the image file wrapper (IFW). And, since time can be of the essence in after final practice, knowing a document has been received and is in the IFW can be a great benefit. For example, if the after final reply is filed within 2 months of the date of the final Office Action, the shortened statutory period for response will expire either 3 months from the mailing date of the final rejection or on the date the advisory action is mailed, whichever is later. Still further, there are also patent term extension advantages to filing electronically, as I discussed here.

5. When Filing By Mail Or By Hand, Take Advantage Of The U.S. Patent Office’s Expedited Procedure For After Final Responses

The Patent Office has an expedited processing procedure for processing paper responses after final rejection under 37 CFR 1.116. To take advantage of the expedited procedure, after final responses under 37 CFR 1.116 need to be marked as a “Reply under 37 CFR 1.116 – Expedited Procedure – Technology Center (XXXX)” on the upper right portion of the paper. Also, if the response is filed by mail, the envelope must be marked “Mail Stop AF” in the lower left hand corner. The markings preferably should be written in a bright color with a felt point marker. If the reply is hand-carried to the Customer Window, the outside of the envelope should be marked “Reply Under 37 CFR 1.116 – Expedited Procedure – Technology Center (XXXX).” See MPEP 714.13(V).

Three Final Comments

1. If you are not filing electronically through the Patent Office’s EFS-Web, I suggest that you consider starting to. The system is surprisingly simple and easy to use.

2. Under Patent Office rules, every Amendment must include markings showing the changes relative to the last entered amendment. So, in Amendments After Final (or Amendments filed with a request for continued examination (RCE)), it is important to take care not to include markings that indicate changes relative to any unentered amendment. Doing so should result in a Notice Of Non-Compliant Amendment. Never assume that an after final amendment has entered because they are not entered as a matter of right.

3. In view of the U.S. Patent Office’s new rules changing continuation practice, it appears that getting the most out of every response, before and after final, is going to be more important than ever

Practical Take Aways Regarding “Associated” Applications in View of McKesson

© 2007 Christopher Paul Mitchell (Chris) and Michael Kondoudis (www.patentablydefined.com)

In McKesson Information Solutions, Inc., v. Bridge Medical, Inc., No. 06-1517 (Fed. Cir. 2007), the Federal Circuit affirmed a dismissal of an infringement suit after finding that the patent in suit was unenforceable due to inequitable conduct. In doing so, the Federal Circuit reaffirmed that a patent may be rendered unenforceable for inequitable conduct if an applicant, with intent to mislead or deceive the examiner, fails to disclose material information or submits materially false information during prosecution.

At issue in McKesson was whether the failure to cite information from one of two similar applications in the other during their pendency constituted inequitable conduct. The information at issue included: a prior-art patent; office actions; and the allowance of the first case.

The McKesson decision is a fact intensive one that does not necessarily break new legal ground. Nonetheless, the decision is significant; not for its general guidance about determining whether a decision to withhold information constitutes inequitable conduct, but for its illustration of the complexities that may arise in the context of “associated” applications, that is, unrelated applications directed to similar technology.

The following are some practice suggestions to promote compliance with the duty of candor in both the narrow context of a particular application and in the broader context of associated applications.

Suggestions For Patent Practitioners

1. Read the McKesson Decision and Rule 56; Understand the Duty of Candor and the Affirmative Defense of Inequitable Conduct

37 CFR 1.56 (“Rule 56”) imposes a duty of candor and good faith in dealing with the United States Patent and Trademark Office (USPTO). This duty generally requires, during the pendency of an application, that each individual associated with the filing and prosecution of that application disclose to the USPTO all known information that is “material to patentability.”

“Inequitable conduct” is an affirmative defense to patent infringement that requires: (1) an affirmative misrepresentation of material fact, a failure to disclose material information, a submission of false information, and/or an attempt to “bury” material information; and (2) an intent to deceive. Materiality may be judged by the “reasonable examiner” standard. An intent to deceive is necessary; an intent to withhold material information is not sufficient. And, the burden of establishing inequitable conduct requires that the asserting party prove a threshold level of materiality and intent by clear and convincing evidence.

2. Educate Clients About the Duty of Candor and Periodically Remind Clients of the Duty

 Consider notifying your clients about the “duty of candor” at least at the time of filing and perhaps at other specified stages of prosecution. Whether this notice is via a separate letter or a portion of a reporting letter, it would appear prudent to consider including:

a. a copy of Rule 56 along with a plain English explanation of the rule;

b. examples of potentially material information and possible sources of such information such as co-pending applications directed to similar subject matter, related applications, communications from foreign patent offices regarding associated applications, abstracts, offers for sale, brochures, litigation, and instances of public use; and

c. a reminder that the duty continues until issuance.

3. Establish and Implement a Procedure to Identify “Associated” Applications and to Ensure That “Associated” Applications are “Cross-Pollinated”

A prerequisite to complying with the duty of candor in the context of “associated” applications is to identify these applications. One way to increase the likelihood that applications directed to similar subject matter will be identified is to have a formal policy in place that effects a centralized “association review” of applications, sets a threshold or articulates criteria to evaluate just how similar in subject matter applications must be to render them “associated,” and specifies a procedure to follow when “associated” applications are identified. Some specific components to consider including in this procedure may include:

a. immediately notifying the client of the apparent association of applications so that the client may take internal steps to facilitate compliance with the duty of candor (see number 2 below).

b. drafting memoranda for each of the “associated” applications that identifies the associations. In paperless offices, the memo can be titled “MEMO OF ASSOCIATION” so that it is noticeable when one looks at a file directory. With physical files, a paper memorandum identifying the associations may suffice. Alternatively, on physical files, it may be prudent to consider writing an indicia such as “APPLICATION ASSOCIATED WITH FILE NUMBER XXXX.XXXX” on the cover of the file itself.

c. citing “associated” applications and the information of record therein to the USPTO as early as possible in prosecution.

d. when appropriate, “cross-pollinating” the “associated” applications. Once “associated” applications are identified, information from each application may need to be made of record in each of the other “associated” applications. And, after this initial cross-pollination is completed, it may more easily maintained if a record is made of what has been cited in/from “associated” applications and when.

e. Adding appropriate indicia to your docketing system. Some docketing systems, such as the Intellectual Property Case Tracking System by FlexTrac Systems, Inc., include a related cases tracking feature that may be suitable for tracking “associated” applications.

These steps may be implemented in any number of ways. For example, when two applications are determined to be associated, they may be clearly marked as such on their file covers. Concurrently, the docketing system could be updated to indicate the association. Then a standard letter may be sent to the client explaining the reasons for categorizing the applications as “associated,” the significance of this determination, and how the applications will be prosecuted by the attorney. Next, an information disclosure statement (IDS) could be filed in each “associated” application identifying the other as a co-pending application. In conjunction with the preparation of these IDSs, the information in each “associated” application could be reviewed to determine whether it would be appropriate to make that information of record in the other “associated” application. Thereafter, every time an Office Action is received in one of the “associated” applications, the other “associated” application may be reviewed to determine whether an IDS is appropriate in that application.

Suggestions For Clients

1. Review Advice from Your Attorney about the Duty of Candor and Follow that Advice

(see number 1 above) Make sure that you fully understand the duty of candor. If you are not sure, ask your attorney.

2. Implement Procedures for Ensuring That “Associated” Applications are Appropriately “Cross-Pollinated”

(see number 3 above). This is of particular importance when corresponding foreign applications are being concurrently prosecuted. Information from such corresponding applications may need to be cited in a corresponding U.S. application and those applications that have been determined to be “associated.” In these situations, the necessity of client input is self-evident.

3. Work with your Outside Counsel to Ensure the Duty of Candor is Met

a. Consider directing applications relating to similar technologies to the same office. Along these same lines, consider specifically requesting that applications directed to similar subject matter be handled by the same attorney or team.

b. Consider specifically advising your outside counsel when applications may be sufficiently similar as to warrant an “association review.” (see number 3 above).

c. Never avoid advising your attorney about potentially unfavorable art simply because it may be unfavorable.

Conclusion

The McKesson decision emphasizes the importance of compliance with the duty of candor in the context of unrelated applications directed to similar subject matter. By implementing a thoughtful procedure including components like those outlined above, compliance may be promoted in the broader context of unrelated applications directed to similar subject matter.

On a final note, the authors recognize that treating unrelated applications directed to similar subject matter as “associated” may entail some potential complications in litigation. And, these complexities should certainly be considered when setting the threshold or articulating evaluation criteria used to determine whether applications are sufficiently similar so as to be treated as “associated.” Nonetheless, by carefully and selectively categorizing applications as “associated,” these potential complications, which are the cost of complying with the duty of candor, can be minimized.