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What Exactly is the “Thrust of the Rejection?”

Every so often a decision comes out of the USPTO’s Patent Trial & Appeal Board (PTAB) or the Federal Circuit that has immediate value for patent prosecutors. For example, back in June, the Federal Circuit analyzed the degree of corroboration necessary for an In re Katz declaration.  Earlier this week, the Court reviewed an appeal from an inter partes reexamination in Honeywell Intl. Inc. v. Mexichem Amanco Holding S.A. de C.V. et al. to determine whether or not the Board’s reliance on a reference different from those of the patent examiners underlying rejections constituted a “new rejection.”  The Court’s discussion, especially that found in the dissent, may help shed light on this somewhat amorphous standard.

While a new rejection analysis may appear to be limited in relevance to patent prosecution and appeals before the PTAB, this same analysis can be helpful in navigating Administrative Procedure Act (APA) compliance in AIA trial proceedings.
First, the “new rejection” framework stems from notice and due process concepts of the APA. As discussed previously in the AIA trial context, 5 U.S.C. § 554(b)(3) prevents the Patent Trial & Appeal Board (PTAB) from introducing new claim interpretation theories without notice, or opportunity to respond.  In patent prosecution and appeals before the PTAB, this procedural concern often manifests itself as a change in a rejection that so changes the “thrust” of the earlier positions that it would violate due process to close prosecution or enter an appeal decision absent further opportunity for the Applicant/Appellant to respond on the merits.

Turning back to Honeywell, the Federal Circuit vacated and remanded the PTAB’s decision rejecting numerous claims in two merged inter partes reexaminations. Part of the reason for the majority’s remand was that the PTAB relied on a new ground of rejection.  Specifically, the PTAB rejected Honeywell’s evidence of unexpected results in light of the “”Omure reference, on the grounds that this reference demonstrated the Patentee had not established a nexus to its secondary indicia evidence.  As noted by the majority, Omure—while briefed by the parties—was not explicitly relied upon by the Examiner. Thus, the Court concluded that the PTAB’s reliance on Omure constituted a new ground of rejection in violation of the APA. (not a “new ground” per se, more a “new evidentiary” basis for denying the patentee’s argument)

Judge Wallach dissented from this part of the opinion, concluding that the PTAB did not issue or rely on a new ground of rejection.  The dissent (here) noted that:

When considering whether the [PTAB] issued a new ground of rejection, the ultimate criterion of whether a rejection is considered new in a decision by the [PTAB] is whether applicants have had fair opportunity to react to the thrust of the rejection.

Which begs the question: What exactly is the “thrust” of a rejection?

Judge Wallach explains that the PTAB is not limited to reciting and agreeing with the Examiner’s rejection verbatim, and may further explain the rejection and respond to parties’ arguments.  Dissent Op. at 2.  On the other hand, if the PTAB finds facts not found by the examiner regarding the differences between the prior art and the claimed invention, and these facts form the basis for the PTAB’s rejection, then the PTAB improperly enters a new ground of rejection.  Id.

Applying this reasoning to the facts of Honeywell, Judge Wallach found the majority’s reliance on statements by the PTAB that they “disagreed” with the Examiner were not sufficient to rise to the level of a new rejection.  Rather, having concluded that the record supported a finding of prima facie obviousness, the PTAB next considered evidence of secondary considerations.  The Board concluded there was no nexus, without relying on Omure.  Thus, according to Judge Wallach, the “PTAB’s analysis of secondary considerations does not include an improper new ground of rejection.”  That is, although the PTAB discussed Omure in other portions of its analysis in rejecting Honeywell’s secondary considerations argument, it was not the principal evidence upon which the PTAB’s rejection was based, and thus should not be considered a new ground of rejection.  Rather, the PTAB was simply providing a more thorough explanation of the Examiner’s conclusion, and limiting the PTAB to “verbatim repetition of the examiner’s office actions…would ill-serve the [PTAB’s] purpose as a reviewing body.”

The takeaway here is that the “thrust” of the rejection balances the interests of notice and due process with the administrative flexibility necessary to explain decisions differently.  Where the “thrust” may be argued to have shifted will depend upon whether or not the difference in explanation is supplementary in nature, or altogether new, principal evidence. As demonstrated by Honeywell reasonable minds may differ in this analysis.

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Are You Properly Corroborating Your In Re Katz Declarations?

Every so often a decision comes out of the USPTO’s Patent Trial & Appeal Board (PTAB) or the Federal Circuit that has immediate value for patent prosecutors. Last week, in EmeraChem Holdings, LLC v. Volkswagen Group of America, Inc.,the Federal Circuit considered the degree of corroboration necessary to disqualify a prior art reference as an inventor’s own work.  In EmeraChem the Cout made clear that such corroboration may be within the inventor declaration itself, but, it must be more than a mere naked assertion of inventorship.

In EmeraChem (here) petitioner Volkswagen sought Inter Partes Review (IPR) of Patent No. 5,599,758 (‘758 Patent).  One of the references cited in the IPR was U.S. Patent No. 5,451,558 (‘558 reference). The ’558 reference lists four co-inventors, two of which are the sole co-inventors listed on the challenged ‘758 Patent assigned to EmeraChem.  The ‘558 reference qualified as prior art under pre-AIA 102(e) since the “inventive entity” was different than the ‘758 patent.

In an attempt to disqualify the ‘558 reference as prior art, EmeraChem filed an inventor declaration signed by the two inventors of their ‘758 patent.  The Declaration stated that the cited parts of the ‘558 reference were solely invented by them and not the other two listed inventors.  No statements by the two remaining inventors listed on the ‘558 reference were provided by EmeraChem or Volkswagen.
The PTAB rejected the inventor declaration submitted by EmeraChem was not sufficient to prove that the ‘558 reference was not prior art under pre-AIA 102(e).  The Board noted that EmeraChem did not call the other inventors of the ‘558 reference as witnesses and did not offer “any contemporaneous documentary evidence in support of the Campbell Declaration.”  (pg. 4 of the opinion).

The Federal Circuit affirmed the Board’s decision rejecting the inventor’s declaration.  The CAFC noted that the declaration itself “amount[ed] to a naked assertion” and that the declaration did not provide “any context, explanation, or evidence to lend credence to the inventor’s bare assertion.”  (pg 6 of the opinion). The CAFC relied upon case law that highlighted the concern for corroborating evidence when an interested party is the one making the declaration.  In this case, the inventors of the challenged patent were clearly “interested parties”. (pg 7 of the opinion).

But what about the sections of the Manual of Patent Examining Procedure (MPEP) that seem to suggest an unequivocal statement by inventors is enough?

The CAFC distinguished EmeraChem’s reliance on MPEP §§715.01(a), 715.01(c)(I), and 2136.05 (and characterizations of case law cited therein).

The Court distinguished In re DeBaun, 687 F.2d 459 (C.C.P.A. 1982), highlighting the fact that DeBaun attached a drawing to his declaration that corroborated the assertions made in the declaration.  Therefore, the Court held that DeBaun does not “stand for the proposition that a declaration alone is always sufficient to support an inventor’s claim to inventorship.”  (pg 8 of the opinion). Further, as to In re Katz, the Court focused on the significance of the fact that the two co-authors on Katz’s published article were explained in the declaration as mere teaching assistants.  In Katz, the declaration was sufficient to rebut “the board’s inference that [the co-author’s] names were on the article because they were co-inventors.”  (pg 9 of the opinion).  The CAFC noted that in both Debaun and Katz, something more than a naked assertion by the inventor was needed.

As this case makes clear, the MPEP does not have the force and effect of the law. As pre-AIA applications will be pending for many years to come, prosecutors would be wise to bolster their In re Katz declarations with more than just mere conclusions of inventorship.  Ideally, the inventors would explain the contributions of the co-authors in a manner that makes clear that their contributions do not rise to the level of inventorship.

Patent Examiners Leverage AIA Trial Data

Back in April, the USPTO launched the Post Grant Outcomes Pilot, which focused on pending patent applications that are related to patents undergoing an America Invents Act (AIA) trial proceeding before the Patent Trial and Appeal Board (PTAB). The agency now reports that the Post Grant Outcomes Pilot has succeeded in making examiners aware of trials related to applications they are examining, and in turn has facilitated the timely and effective examination of applications.

The idea behind the program is that AIA trial proceedings contain prior art and arguments that might be highly relevant to the patentability determination of related applications currently under examination. This pilot was intended to help examiners harness the art presented during AIA trials to enhance examination of a related application, so they could reach more expeditious decisions on patentability.
During the pilot, the USPTO notified examiners via email of assigned applications relating to an AIA trial. The pilot program streamlined access to the contents of the trial by pinpointing for examiners the most relevant documents. The USPTO then surveyed the examiners to gain detailed feedback.

The survey results (here) showed that examiners found the PTAB information—especially the initial petition (including the prior art citations), the PTAB’s institution decision, and any expert declarations—to be highly useful.  The PTO also found that 46% of the examiners referred to at least one reference cited in the AIA trial petition during the examination of their own case, either by citing it in a rejection or as pertinent prior art. If an examiner did not use or cite the prior art from the trial, it was most likely because the claims were different between the “parent” and the “child” case, the examiner disagreed with the AIA petitioner’s analysis of the prior art and/or claims, or the examiner was able to find better art.

To further facilitate the process, in August 2016 the USPTO deployed an upgrade to examiners’ desktop application viewers which allows automated access to the contents of related AIA trials, including access to the entire file, and any cited prior art.  Now that the results of the pilot are available, the  next objective is to identify examination best practices or deficiencies that can be addressed through additional examiner training. 

New 101 Guidance Addresses Recent CAFC Decisions

Today, the USPTO issued a memorandum entitled “Recent Subject Matter Eligibility Decisions.” (here).  The memo  provides a discussion of two recent CAFC decisions identifying eligible subject matter, namely McRO, Inc. dba Planet Blue v. Bandai Namco Games America Inc., 120 USPQ2d 1091 (Fed. Cir. 2016) and BASCOM Global Internet Services v. AT&T Mobility LLC, 827 F .3d 1341 (Fed. Cir. 2016).

With respect to McRO, the memo emphasizes the value of the specification in interpreting claims under 101, specifically where a problem is identified in the art, and the solution presented in the claims. As to Bascom, the memo emphasizes that conventional elements may nonetheless be arranged in unconventional manners (again emphasizing the value of the specification in explaining such).

The Office promises more updates in the future, including addressing yesterday’s decision in  Amdocs (Israel) Ltd. v. Openet Telecom, Inc., No. 2015-1180 (Fed. Cir. Nov. 1, 2016), which found distributed computing to be an unconventional technological solution. 

USPTO Revisits 2011 Rule Proposal (Rules 56(a) &555(a))

In the wake of the Federal Circuit’s 2011 decision in Therasense Inc. v. Becton Dickinson and Co., the USPTO quickly moved to revise the Duty of Disclosure to align with the Court’s new, but-for materiality standard—perhaps too quickly.  The 2011 proposal sought to update the relevant rules (1.56 and 1.555) by explicitly adding a short hand, reference to the Therasense case itself. The earlier proposal also intertwined the the “egregious conduct” exception of the Therasense holding (Duty of Candor & Good Faith) with the Duty of Disclosure.

At the time, I questioned whether it was unnecessarily confusing to mix together concepts of conduct and disclosure given the agency’s historical segregation of such. Others found it odd that the rule would reference the name of the case as opposed to spelling out the “but-for” materiality standard of its holding.

Today, the USPTO has revisited this earlier proposal, and issued a new proposal.  
The new proposal modifies Rules 56(a) for patent applications and Rule 555(a) for patent reexamination. The new proposal removes the explicit reference to Therasense, and adds in its place an explanation of but-for materiaility. The proposal also correctly separates the egregious conduct exception of Therasense from the Duty of Disclosure sections of these Rules (here).

The newly proposed Rule 56 is reproduced below:

§ 1.56 Duty to disclose information material to patentability.
(a) A patent by its very nature is affected with a public interest. The public interest is best served, and the most effective patent examination occurs when, at the time an application is being examined, the Office is aware of and evaluates the teachings of all information material to patentability. Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability under the but-for materiality standard as defined in paragraph (b) of this section. The duty to disclose information exists with respect to each pending claim until the claim is cancelled or withdrawn from consideration or the application becomes abandoned. Information material to the patentability of a claim that is cancelled or withdrawn from consideration need not be submitted if the information is not material to the patentability of any claim remaining under consideration in the application. There is no duty to submit information which is not material to the patentability of any existing claim. The duty to disclose all information known to be material to patentability is deemed to be satisfied if all information known to be material to patentability of any claim issued in a patent was cited by the Office or submitted to the Office in the manner prescribed by §§ 1.97(b) through (d) and 1.98. However, no patent will be granted on an application in connection with which affirmative egregious misconduct was engaged in, fraud on the Office was practiced or attempted, or the duty of disclosure was violated through bad faith or intentional misconduct. The Office encourages applicants to carefully examine:
(1) Prior art cited in search reports of a foreign patent office in a counterpart application, and
(2) The closest information over which individuals associated with the filing or prosecution of a patent application believe any pending claim patentably defines, to make sure that any material information contained therein is disclosed to the Office. 

(b) Information is but-for material to patentability if the Office would not allow a claim if the Office were aware of the information, applying the preponderance of the evidence standard and giving the claim its broadest reasonable construction consistent with the specification.

Rule 555(a) includes substantially similar language but removes the “patents and printed publications” limitation of the previous version of 555(a) to encompass disclosure of information as to any matter that is appropriate for consideration in a reexamination proceeding (e.g.,admissions by patent owner), as opposed to being limited to patents and printed publications.

USPTO Post-Prosecution Pilot Program

While not directly related to Patent Trial & Appeal Board (PTAB) practice, today, the USPTO announced the launch of the “Post-Prosecution Pilot Program.” (here) The program is designed to provide more feedback to applicants by allowing them to participate in a panel discussion with examiners after a final rejection.

The goal of the Pilot is to reduce the number of appeals to the PTAB. Essentially, the program allows for participation in person, or remotely, in a pre-appeal brief style hearing of the prosecution.  

In my view, this type of feedback will be especially valuable to patent applicants (which is why I recommended the same roughly 6 years ago).

The PTO describes the program as a combination of Pre-Appeal and AFCP 2.0, referring to the new, panel hearing option as “P3.”   P3 provides for (i) an after final response to be considered by a panel of examiners (Pre-Appeal), (ii) an after final response to include an optional proposed amendment (AFCP 2.0), and (iii) an opportunity for the applicant to make an oral presentation to the panel of examiners (new). Finally, the panel decision will be communicated in the form of a brief written summary. 

To be eligible, 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). A continuing application (e.g., a continuation or divisional application) is filed under 35 U.S.C. 111(a) and is thus eligible to participate in the P3. Reissue, design, and plant applications, as well as reexamination proceedings, are not eligible to participate in the P3. 

A request for a response under 37 CFR 1.116 to be considered under the P3 must include the following items: (1) A transmittal form, such as form PTO/SB/ 444, that identifies the submission as a P3 submission and requests consideration under the P3; (2) a response under 37 CFR 1.116 comprising no more than five pages of argument; and (3) a statement that the applicant is willing and available to participate in the conference with the panel of examiners. Optionally, a P3 request may include a proposed non-broadening amendment to a claim(s). There is no fee required.

The program will begin today and extend until either January 12, 2017, or the date the Office accepts a total (collectively across all technology centers) of 1,600 compliant requests to participate, whichever occurs first. Each individual technology center will accept no more than 200 compliant requests, meaning that the pilot will close with respect to an individual technology center that has accepted 200 compliant requests, even as it continues to run in other technology centers that have yet to accept 200 compliant requests.

USPTO Reacts Quickly to Landmark 101 Ruling

Although a few minutes late for today’s PatentsPostGrant.com webinar on the topic, the USPTO has now issued Preliminary Examination Instructions on Alice Corporation Pty. Ltd. v. CLS Bank International, et al., No 13-298 (June 19, 2014). Any member of the public may submit written comments by July 31, 2014. In the meantime, the USPTO will use these preliminary instructions when determining subject matter eligibility under 35 U.S.C. 101 of claims involving abstract ideas in view of CLS Bank.

Free Webinar, Wednesday 6/25

Yesterday, the Supreme Court issued its long-awaited decision in CLS Bank v. Alice Corp. on patent eligibility standards for computer implemented inventions. This decision will impact current 101 challenges in CBM proceedings, and shape patent procurement/claiming strategies for software related methodologies going forward.

Please join me and my authoritative panel for this special edition of the PatentsPostGrant.com webinar series. Together with my colleagues Michael Kiklis, author of the recently released treatise, “The Supreme Court on Patent Law,” and Stephen Kunin, former Deputy Commissioner for Patent Examination Policy at the USPTO, we will endeavor to explore this important ruling.

Click here to Register: http://event.on24.com/r.htm?e=794534&s=1&k=53B7CFD63569A11431583A5913CAEED3

USPTO Proposes Attributable Owner Requirements

Last week, the USPTO released a Notice of Proposed Rulemaking (NPRM) entitled Changes to Require Identification of Attributable Owner. The proposals would heap significant new administrative requirements on patent owners in the name of thwarting abusive patent suits. The agency explains the new reporting requirements will, in part, reduce risk of abusive patent litigation by helping the public defend itself against such abusive assertions by providing more information about all the parties that have an interest in patents or patent applications.

The proposal is unlikely to cause any kind of meaningful relief for companies targeted by patent trolls. Unfortunately, this effort is being driven from the White House. The PTO is fully expecting the firestorm that is coming to push back on this misguided mandate….unleash the fury.

AIA patent prosecution

PTAB Review Proceedings Force Change to Age Old Patent Prosecution Paradigm

As Bob Dylan once warned, you better start swimmin’ or you’ll sink like a stone….the times they are a changin.‘ While Bob clearly had some broader ranging social issues on his mind when he penned those lyrics, they are quite befitting of the outdated philosophies driving most U.S patent prosecution practices in the aftermath of the America Invents Act (AIA).

I’m not talking about the change over in March 2013 from the first-to-invent system to the first-inventor-to-file system of the AIA, but instead, the de facto switch in September 2012 from the “infringement first” philosophy of patent prosecution to the new, balanced patentability/infringement model. That is, before the introduction of the AIA post grant challenge mechanisms, Inter Partes Review (IPR), Post Grant Review (PGR), and the transitional program for Covered Business Method Patents (CBM), securing a maximum claim breadth was the primary driver of patent prosecution practices — the broader the better.

The infringement first philosophy is now dead— as will be your patent portfolio unless you change your tune.

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