Patenting in the Age of Crowdsourcing: An Expanded Opportunity for Third Party Participation

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1 Patenting in the Age of Crowdsourcing: An Expanded Opportunity for Third Party Participation Law Review CLE April 2013 Sherry L. Murphy Myers Bigel Sibley & Sajovec Raleigh, North Carolina

2 Patent Prosecution O Ex Parte procedure O Between Applicant and the Patent Office O Normally an exchange between Applicant s representative and an Examiner O Few instances where a third party may intervene

3 Patent Prosecution 3rd Party Options for Comment O Old Rule 1.99: third party submission of art O Restricted ability to submit relevant art within 2 month window from publication O Limited to 10 pieces of art O No comments or notations allowed O $180 fee

4 Patent Prosecution 3rd Party Options for Comment O Very rarely used O Can bypass rule compliance by sending references directly to attorney of record, relying on Rule 56 duty compliance for the attorney to submit them to the Patent Office O No guarantee the refs will actually be submitted

5 Patent Prosecution 3rd Party Options for Comment 37 CFR Protests O Filed before publication or notice of allowance O Can file protest after publication if patent owner consents O Patents, publications, or other information O No limits on number of documents O Concise explanation of relevance required

6 Citations in Patent Files 37 CFR O Submit patents or printed publications in file of issued patent O Statement believe pertinent to patentability of a claim O Serve on patent owner O Can remain anonymous

7 America Invents Act O Signed into law September 16, 2011 O A multitude of changes to many statutes with various effective dates O Update procedures and bring more consistency with patent systems in other countries in the world

8 America Invents Act O Section 8 third party art submission provisions took effect September 16, 2012 O Final rules published July 17, 2012 O Art submission provisions apply to: O Any application filed before, on, or after this date O i.e., Any application within the publication/examination timing requirements, even if abandoned (pendency not required) O Any non-provisional utility, design, and plant application, as well as any continuing application

9 Patent Reform Under the AIA More Public Participation O [M]ost patent applications will not only be promptly published, but members of the public will have the opportunity to submit information relevant to patentability that the patent examiner must consider before making a decision to issue a patent. O Robert A. Armitage, Understanding the America Invents Act and Its Implications for Patenting, AIPLA Q.J. vol. 40:1, Winter 2012

10 Patent Reform Under the AIA Improving Patent Quality O This provision provides a mechanism for third parties to contribute to the quality of issued patents by submitting to the Office, for consideration and inclusion in the record of patent applications, any patents, published patent applications, or other printed publications of potential relevance to the examination of the application. O Changes To Implement the Preissuance Submissions by Third Parties Provision of the Leahy-Smith America Invents Act, Fed. Reg. Jan. 5, 2012

11 Crowdsourcing Patents

12 Crowdsourcing Patents O Crowdsourcing: obtaining ideas, content or services from a large and undefined group of people, such as an online community, rather than from more traditional employees or service providers

13 What is submitted O 35 U.S.C. 122(e) O Any patent, published patent application, or other printed publication of potential relevance to the examination of the application (need not be prior art) O Must include a concise description of the asserted relevance of each submitted document O Statement confirming the submission made in compliance with the statute

14 What is Submitted

15 What is Submitted

16 What is Submitted

17 Examiner treatment O Examiner must consider any proper submission O Treated like an IDS, and same format requirements for listings of references O References considered will be printed on the face of the patent along with other references considered during prosecution

18 Third Party Submissions: Old Versus New Old Rule: CFR 1.99 New Rule: CFR Can submit printed publications within 2 months of application publication Can submit printed publications before the earlier of: A) a notice of allowance; or B) the later of 1. 6 months after publication, or 2. first rejection of any claim No comments permitted on the references, or even notations Required to submit concise description of the asserted relevance of each reference Must serve on attorney of record before filing Need not serve on attorney of record

19 Third Party Submissions: Old Versus New Cont d Old Rule: CFR 1.99 New Rule: CFR Fee $180 and limited to 10 total patents or publications Fee $180 fee for every 10 documents or fraction thereof; fee waived for a third party s first submission with 3 or fewer documents Need not identify real party in interest Need not identify real party in interest Applicant has no duty to, and need not, reply, but should file IDS to ensure examiner considers submission Applicant need not separately file IDS with documents, and no duty to, and need not, reply

20 But: Will We Use It? O Patent practitioners/competitor companies O Other members of the public

21 Strategic Advantages to Submitting Art in Another s Application? O Help guard against patents related to your business that are overbroad O More favorable standards of review O Broadest reasonable interpretation of claims O No presumption of validity O No estoppel effect

22 Hypothetical O During a freedom to operate search for her company s new widget, Ann Attorney comes across a pending patent application with extremely broad claims O Claims possibly read on the widget O Ann does a prior art search to probe validity should the broad claims ultimately issue

23 Hypothetical O Ann finds three references that she is excited about because they seem to build a strong case of obviousness against the claims O Ann decides to take advantage of the new opportunity under the AIA to submit the references in the application O She can submit anonymously through a firm O No fee required because it is her first submission and there are only 3 references O Her concise statement of relevance makes it easy for examiner to apply them to a rejection

24 What may happen? O The examiner picks up the submissions and proceeds to reject the application over the three references

25 What may happen? O The examiner considers the references and statement, but does not decide to use them, but rather applies the same art he is more familiar with and has been using in other, similar cases

26 Results O Patent Applicant is provided opportunity to study the references and argue/amend, and include additional fall back positions in dependent claims O May no longer read on widget; or O May still read on widget

27 Results O Applicant may also think application is more valuable and be encouraged to put more effort into the patent family then they otherwise would have

28 Results O References are formally considered by the examiner and printed on the face of the patent, and the claims enjoy a presumption of validity over the references

29 Presumption of Validity O As a general matter, every patent is presumed valid, and each claim of any patent is presumed valid irrespective of the validity of any other claim O Given this statutory presumption, a patent challenger has the burden of proving invalidity by clear and convincing evidence O "Clear and convincing evidence is that which gives the finder of fact an abiding conviction that the truth of the proponent s factual contentions are highly probable O Astrazeneca AB v. Mylan Labs., Inc. (In re Omeprazole Patent Litig.), 490 F. Supp. 2d 381, 500 (S.D.N.Y. 2007)

30 Presumption of Validity O When a party asserts invalidity of a patent based on prior art references that were before the patent examiner when he allowed the patent claims, the difficulty of overcoming the presumption of validity is greater than it would be if the evidence relied on was not before the examiner O The party attacking validity has the burden of overcoming the deference that is due to a governmental agency presumed to have done its job properly

31 Hypothetical no submission O Ann, instead, decides to hold the references in a file along with her opinion that any patent issuing on widget is invalid, and the company is advised to go forward with sales O Patent application may be abandoned, or issue on more narrow claims no longer covering widget, with no continuation filed; or O Patent issues covering widget

32 Hypothetical no submission O Patent issues covering widget O Infringement may never be detected O Company may decide to stop selling widget O Patent owner may not litigate; may seek to license or assign O Litigation is expensive, and there are other options that may be pursued short of litigation O Ann should not rely on the pursuit of another strategy, however, and discount the costs and commitment of litigation O Patent owner may also assign his patent to a more aggressive party (e.g., competitor or NPE)

33 Hypothetical no submission O Patent owner alleges infringement O References were not considered during prosecution, so no deference based on examiner s consideration O But, claims still have presumption of validity O Many months and high cost before issue is even reached in litigation O More limited ability for patent owner to amend claims to get around references at this point O Owner cannot file broadening amendments in reissue if more than 2 years from issuance O Owner can request reexamination, but costly O May be intervening rights

34 Hypothetical no submission O Ann could challenge the issued patent with inter partes review O Replaces inter partes reexamination under the O O O O AIA Available for all patents, regardless of priority date Prior art limited to patents and printed publications Can be brought by the Company within 1 year of a litigation being asserted against it; litigation may be stayed Limited discovery; final decision in about 18 months

35 But: Will We Use It? O Patent practitioners/competitor companies O Other members of the public

36 Criticisms O Who wants to spend their spare time to do an art search and put together a formal IDS submission in a patent application? O Will a non-attorney be able to submit a legally sound description of the relevance of the submitted references? O Ability to read and properly construe the pending claims? O Understanding of patentability requirements?

37 O A joint project between the New York Law School and the USPTO O Funded by GE, HP, IBM, Article One Partners, Microsoft, Open Innovation Network, Red Hat, Intellectual Ventures O Original pilot ran June 2007 to June 2009 O Limited to 400 applications O Limited to software and business methods O 2,700 registered reviewers from more than 140 countries (most from U.S.) O Examiners used art in about 20% of applications

38 O Second pilot ran Oct to Sept O Expanded to biotech, telecommunications, others O USPTO sent notices encouraging applicants to elect to participate

39 O Declared itself a success in third-party participation to improve patent quality O The project was so successful that the America Invents Act (AIA) makes provision for the USPTO to implement a Peer-to-Patent type system. And that is just what is happening. O Best of all, you will no longer be limited in the areas of technology for which prior art my be submitted. Everything is fair game!

40 Article One Partners O Organization offering cash rewards to public patent searchers who uncover the best evidence O A client pays to set up a research project, or study, for registered searchers to conduct O Normally used for patents involved in litigation or pre-litigation research

41 Applications are now open to third party submissions O After September 16, 2012 O Must comply with IDS-like formatting requirements O Pay fee for submitting more than three references

42 Applications are now open to third party submissions O Examiner-initialed reference listing may be the only formal indication to Applicant O Participants of e-office Action program may be notified of third-party submissions O Check initialed listings against prosecution records

43 Third Party Submissions Initial Statistics O As of December 2012, 270 third party submissions had been received, in 111 applications, in the three months since the new program started in September O The art unit receiving the most was Technology Center 3700, which includes many software-related inventions such as those in electronic gaming devices and medical equipment

44 Third Party Submissions Initial Statistics O PTO Director, David Kappos, noted, when looking at the spread of submissions as a whole, it s important to note that there are not a lot of classifications untouched. O Director Kappos concludes that this demonstrates (along with the use of the new post-grant review procedure) that the public finds valuable the new ways to interact with the PTO and they will contribute quickly to improved patent quality

45 What Has Happened thus Far? O Almost all of the submissions are filed by a registered practitioner (patent attorney or patent agent) O Many are filed after a first Office Action has been received O Most cite only 1-5 references O Most are not used by the Examiner O One examiner commented that the reference submitted was no more relevant than the art already applied in the Office Action

46 General Impressions Thus Far O Most have no impact on examination O There were, however, a couple that did make a difference in the examiner s rejections and/or the applicant s amendments

47 Europe a comparison O Article 115 EPC and Rule 114 EPC O Third party submissions can be made during prosecution any time after publication O Can remain anonymous, and no estoppel O Observations can be as short or as long as desired, though the EPO favors wellstructured and concise third-party observations *With comments from Dr. Richard Gibbs, Marks & Clerk LLP, Glasgow

48 Europe a comparison O Third party observations are filed in writing in an official language of the European Patent Office (English, French or German) and state the grounds on which they are based O Observations will be communicated to the applicant, who may comment on them O Often application that issues will also have an opposition filed

49 Europe a comparison O Opposition inter partes proceeding that can be filed within 9 months after grant O Real Party in Interest can remain anonymous O Longer wait, more expensive it can become O Oppositions only after patent is granted, much more expensive, and the process of getting a hearing can take several more years O After validation, have to address patent on a country-by-country basis

50 Europe a comparison O Validation when the EPO patent becomes a patent in individual European countries O Some national courts give deference to the EPO, others will assess the facts independently

51 Europe a comparison O More flexibility in the issues raised in third party observations as compared to opposition O Observations may be directed to anything concerning the patentability of the invention, e.g., novelty, inventive step (nonobviousness), sufficiency, unallowable amendments (added matter), and clarity O In Opposition clarity cannot be raised as an initial ground to challenge the patent

52 A Word About Post grant Review O There is a new post-grant review in the US under the AIA that may be initiated within 9 months of grant of a US patent O Rather than a next step in challenging a patent after third party observations, however, as perhaps an opposition in Europe may be considered, it is more like a mini-trial O Real party in interest must be identified O Limited Discovery O Estoppel applies

53 Europe Is it used? O In practice, third party observations are rarely filed O About 0.75% of examined applications, though rate has been increasing O More common in biotech/chem cases than other technologies O Parties submitting observations do not become party to the proceedings, and thus in practice can have little or no influence on the way the Examiner considers or decides the issues raised O However, third party can monitor the proceedings and submit further observations

54 Europe Is it used? O Though no estoppel, there is concern that something raised in observations during prosecution and ignored and easily rebutted may make the same argument more difficult later O The same or similar arguments may not be given much weight later in an opposition O Therefore, some prefer to wait for opposition, where third party is able to participate and argue the case

55 Europe Is it used? O More than 80% of cases in which observations are filed receive only one observation, and most are not accompanied by reasoned argument O More than half of the time examiners have made use of the observations O About a third of applications in which observations have been filed are opposed after grant

56 Europe Is it used? O EPO promoting third party observations by included new tab when looking at the status of an application to an online fillable form for ease of submission O Personal details of the submitter are not required to be provided, but the third party could choose to do so to be given opportunity to correct any formal deficiencies in the submission

57 PCT Applications O WIPO introduced July 2, 2012 O Can submit 3rd party observations in PCT applications in the PatentScope search system O Searchers will notice a button marked for such submissions

58 PCT Applications O Timing: O From time of publication until 28 months from priority date O Content: O Submit relevant art for novelty and inventive step O Submit statement of relevance O Must have WIPO account and indicate real party in interest, though may elect to keep confidential with respect to applicant and public records O Each party may only submit observations once in an application O Can submit comments in any of the 10 PCT languages and references in any language

59 PCT Applications O What happens: O Applicant may, but is not required to, respond O Art will be forwarded to ISA if search report is not yet released, which may or may not use it O Designated states are notified O Eliminates need to separately file third party observations in multiple jurisdictions O But how many PCT applications actually enter the national stage?

60 WIPO Comments on PCT system O This additional feature is an example of using the power of the Internet to assist in quality outcomes in the patent process. O As of mid-september, 18 third-party observations had been submitted via the system. While relatively small, the seriousness of the submissions thus far vindicates the usefulness of the new facility.

61 Third Party Submissions Will We Use It in the U.S.? O Perhaps under the right circumstances O Clearly unpatentable claims, need FTO clearance or want to aid in limiting portfolio of competitor

62 Third Party Submissions Will We Use It in the U.S.? O May become more common than current practice, but will likely still be relatively rare O Though more time is provided, still restricted to provide references and comments before examination has begun or less than 6 months after publication O Examiners not accustomed to using such submissions

63 Third Party Submissions Will We Use It in the U.S.? O Active competitors monitoring for similar patent applications O Maybe by volunteers/searchers funded by a nonprofit organization who are actively seeking applications that fit into the time periods

64 Third Party Submissions Will We Use It in the U.S.? O May be better, strategically, to wait and let examination run its natural course instead of providing opportunity and impetus for Applicant to craft claims around references O Time and expense inherent in the patent prosecution process in many cases is its own limiting factor on the issuance of patents

65 Time Will Tell O Questions? O Comments? smurphy@myersbigel.com