IP Law

Patent Office Issues Guidelines for Products and Laws of Nature

The United States Patent Office (USPTO) has issued a new set of training materials to provide guidance to patent examiners on whether patent claims improperly encompass laws of nature, natural phenomena and principles, or products of nature.

The training materials are based on the US Supreme Court’s recent decisions in Molecular Pathology v. Myriad Genetics and Mayo Collaborative Services v. Prometheus Laboratories, Inc.

The new guidelines will have an impact on patent applications now pending.

According to the USPTO, the proper test for patentability is:

  • “whether a claim reflects a significant difference from what exists in nature” (patent eligible), or
  • “whether a claim is effectively drawn to something that is naturally occurring” (not patent eligible).

The PTO provided a flowchart to illustrate the analysis and included an example:

The Amazonian cherry tree is a naturally occurring tree that grows wild in the Amazon basin region of Brazil. The leaves of the Amazonian cherry tree contain a chemical that is useful in treating breast cancer. However, to be effective, a patient must eat 30 pounds of the leaves per day for at least four weeks. Many have tried and failed to isolate the cancer-fighting chemical from the leaves. Applicant has successfully purified the cancer-fighting chemical from the leaves and has named it amazonic acid. The purified amazonic acid is structurally identical to the amazonic acid in the leaves, but a patient only needs to eat one teaspoon of the purified acid to get the same effects as 30 pounds of the leaves…

In the USPTO’s view, a claim to the purified acid would not be patent-eligible because:

  • there is no structural difference between the acid in the leaves and the purified acid, and
  • the claim does not include features to show that the purified product is markedly different from the natural one.

Commentators have questioned why the USPTO is apparently seeking to make patent-ineligible purified or isolated natural products that have been considered patentable in the US for at least 100 years and are patentable in many other countries.

If you have questions about patentability, contact our office to arrange a free initial consultation with one of our patent attorneys.

At Sheldon Mak & Anderson, we recognize that innovation is your competitive edge – and it needs protection. Recognized as one of the country’s “Best Law Firms” by U.S. News and Best Lawyers, Sheldon Mak & Anderson was established in 1983 and is one of Pasadena’s oldest law firms. Our full-service IP firm provides local, regional, national, and international legal services in the following areas: patents, trademarks, copyrights, trade secrets, IP litigation, international patent and trademark prosecution, licensing, alternative dispute resolution, and green technology.

Contact our knowledgeable intellectual property attorneys today TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) or email us at tri@usip.com to find out how we can provide powerful protection for your unique ideas.

We have offices conveniently located in Pasadena (626-796-4000, 100 Corson Street Third Floor, Pasadena, CA 91103-3842);  Riverside (951-787-7770, 5885 Brockton Avenue, Riverside, CA 92506-1863); Upland (909-946-3939, 222 N. Mountain Avenue, Suite 210, Upland, CA 91786-5714); and Orange County (855-874-3327, 2102 Business Center Drive, Suite 130, Irvine, CA 92612-1001).

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Photo Attribution: “A montage displaying the five major branches of natural science: Chemistry (represented by the center image of flasks containing chemicals), Astronomy (top left picture of stars), Earth Science (top right picture of erupting volcano), Physics (bottom right picture of spinning top), and Biology (bottom left picture of fish).” By Misc is licensed under CC BY 2.0.

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“After Final Consideration” Pilot Program Extended by Patent Office

The US Patent and Trademark Office (USPTO) announced that it is extending a popular program that allows patent applicants to submit minor amendments to patent applications even after a final rejection.

The “After Final Consideration” Pilot was launched in May and was scheduled to end on September 30, 2013.  The Pilot will now be extended to include requests filed on or before September 30, 2014.

The Pilot is one of the programs the Patent Office is adopting to reduce the backlog of 90,000 pending patent applications associated with a Request for Continued Examination (RCE).  An RCE is a request by a patent applicant to reopen prosecution of a patent application after a final rejection.

The Pilot also allows patent applicants to potentially avoid the delay and cost associated with an RCE.

Applicants for the Pilot must submit a request and certification for consideration, an amendment to at least one independent patent claim, and any fees that may be required.  The amendment must not “broaden the scope of the independent claim in any aspect.”

The patent applicant must also be willing and available to be interviewed by a patent examiner.

A patent examiner will review the amendment and determine whether it should be accepted for further examination by the USPTO.  The amendment is more likely to be accepted if:

  • the amendment cancels claims or complies with formal requirements in response to objections made in the final patent office action;
  • the amendment rewrites objected-to claims in independent form;  or
  • the amendment incorporates limitations from objected-to claims into independent claims, “if the new claim[s] can be determined to be allowable with only a limited amount of further consideration or search” by the patent examiner.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Bill Would Allow Civil Suits against Foreign Entities for Trade Secret Theft

Senator Jeff Flake (R-Ariz.) has sponsored a bill which would allow civil suits against any foreign person who “misappropriates, threatens to misappropriate, or conspires to misappropriate” a US trade secret.

Senate Bill 1770 is entitled the “Future of American Innovation and Research Act of 2013.”

The bill would extend the jurisdiction of US District Courts to entities “located outside the territorial jurisdiction of the United States” or acting “on behalf of, or for the benefit of” an entity located outside the United States.

The bill defines trade secrets to mean:

any information, including a formula, pattern, compilation, program, device, method, technique, or process, that—

(A) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public or other persons who can obtain economic value from the disclosure or use of the information; and

(B) is the subject of efforts that are reasonable under the circumstances to maintain the secrecy of the information.

The bill deals with trade secrets discovered by “improper means,” defined to include “theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, and espionage through electronic or other means.”

“Improper means” do not include reverse engineering or independent derivation alone.

Remedies for violations of the Act would include injunctions, reasonable royalties, and damages.

Trade secret owners can already bring complaints before the International Trade Commission (ITC) concerning misappropriation of trade secrets by foreign entities.  A 2011 case, TianRui Group Co. Ltd. v. U.S. Int’l Trade Comm’n, held that Section 337 of the Tariff Act of 1930 applied to trade secret misappropriation even where the act occurred outside the US.

 

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Congress Considers New Trade Secret Bills

The US Congress has recently passed two bills to protect trade secrets and is working on more.

The Theft of Trade Secrets Clarification Act was passed in 2012 in response to a court decision overturning the trade theft conviction of former Goldman Sachs programmer Sergey  Aleynikov.

As previously reported, Goldman has been ordered to pay about $1.7 million (so far) for Aleynikov’s legal fees.

Another act passed in 2012, the Foreign and Economic Espionage Penalty Enhancement Act of 2012, increased penalties for trade secret theft.

Reports that the Chinese military had hacked into the computers of US businesses to steal trade secrets have led to even more trade secret protection bills.

Representative Zoe Lofgren (D-CA) has introduced the Private Right of Action Against Theft of Trade Secrets Act of 2013 (H.R. 2466).  This act would give individuals and companies a right of action under the federal Economic Espionage Act of 1996 (EEA) to sue those who misappropriate trade secrets.  The EEA now only allows federal prosecutors to file criminal trade secret cases.

 

Senator Jeff Flake (R-AZ) introduced the Future of American Innovation and Research Act (S. 1770), which would create a private right of action for trade secret theft by foreign entities.  The act would give US federal courts jurisdiction over thefts by foreign entities that injure a US citizen or cause an injury within the United States.

Representative Mike Rogers (R-MI) introduced the Cyber Economic Espionage Accountability Act (H.R. 2281) and Senator Carol Levin (D-MI) introduced the Deter Cyber Theft Act (S. 884).

The Cyber Economic Espionage Accountability Act would allow federal agencies to penalize foreign officials that committed or aided cyber-espionage and trade secret theft.  Penalties would include freezing assets, banning travel to the US, and other measures.

The Deter Cyber Theft Act would create a “watch list” of counties that engage in “economic or industrial espionage in cyberspace with respect to United States trade secrets or proprietary information.”

In order for information to be protected as a trade secret under either state or federal law, a company that owns the so-called secrets must take adequate steps to maintain the confidentiality of the information.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Anti-Patent-Troll Bill Passes US House of Representatives

A bill known as the Innovation Act has passed the House of Representatives and is headed to the Senate.  The bill, sponsored by Congressman Bob Goodlatte, is designed to prevent “abusive patent litigation.”

Some companies known as “patent assertion entities,” “non-practicing entities,” or (less politely) “patent trolls” have been criticized for actions such as sending large numbers of demand letters to small businesses, claiming patent royalties without first determining whether the recipients were actually infringing any patents.

For example, one such entity threatened to sue about 8,000 hotels, coffee shops, and retail stores, claiming that they infringed its patents by setting up Wi-Fi networks for their patrons.

Congressman Goodlatte said that his bill was designed to discourage lawsuits that “target a settlement just under what it would cost for litigation, knowing that these businesses will want to avoid costly litigation and probably pay up.”

Among other things, the Innovation Act requires disclosure of the identity of the ultimate entity that owns the patents asserted in litigation, to prevent patent owners from hiding behind shell companies and sending multiple demand letters to the same targets.

The Act could affect a wide range of patent holders, and not just so-called patent trolls.

The bill would require patent holders to plead patent infringement more specifically, with reference to infringing products by name and model number.  The patent holder would also have to identify which claims of a patent are being infringed on an element-by-element basis with reference to the purportedly infringing products.

The Innovation Act would also create a version of the “loser pays” system that applies in many other countries.  The Act states that “a court shall award, to a prevailing party, reasonable fees and other expenses incurred by that party.”

However, the Act also gives a court the discretion to decline to award fees if “the position and conduct of the non-prevailing party or parties were reasonably justified in law and fact” or if “special circumstances” would “make an award unjust.”

The Act prevents patent holders from using an alleged infringer’s failure to settle in response to a demand letter as evidence of willful infringement, unless the letter set out with particularity the identity of the patent owner, which patents had allegedly been infringed, and the manner in which the patents had allegedly been infringed.

Opponents of the bill argue that it will discourage legitimate inventors with meritorious claims and favor wealthy parties which can afford to risk being liable for other parties’ costs.  They say that the bill does not fix real “patent troll” problems.

 

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Google Expands Patent Search Tool

Google’s Patent Search engine is a valuable and underutilized tool for inventors and businesses. It allows users to search several patent offices at once for granted patents, published patent applications, and even prior art.

While the search engine previously only covered the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO), Google recently announced a significant expansion. Patents are now available from the World Intellectual Property Organization (WIPO), China, Germany, and Canada.

As detailed by Google, users can search by several criteria such as patent number, inventor, classification, and filing date. The documents originate directly from the applicable patent office. They are available in their native language and can also be converted to English using Google Translate.

Google’s Patent Search tool also offers free bulk downloads of patent and trademark data from the USPTO. Documents were previously only attainable on a file-by-file basis from the USPTO website, or in bulk via CDs, DVDs, or digital tape for a sizable fee.

Finally, Google’s Prior Art Finder is another useful tool. It identifies key phrases from its database of patent documents creates a search query, and provides results from Google Patents, Google Scholar, Google Books, and the rest of the Internet.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Supreme Court Rules “First Sale Doctrine” Applies to Goods Made Abroad

The U.S. Supreme Court recently announced its long-anticipated decision inKirtsaeng v. John Wiley & Sons, Inc., No. 11-697 (Mar. 19, 2013). The Court decided that the “first sale doctrine” of the Copyright Act applies to goods made abroad.

As we previously discussed on this IP Law Blog, the case involved a Thai textbook dealer (Kirtsaeng) who purchased textbooks overseas and sold them to fellow students to help finance his education.  Following a copyright infringement lawsuit by publisher John Wiley & Sons, the student was ordered to pay damages in the amount of $600,000.

The case required the justices to address the tension between two important aspects of copyright law. The Copyright Act prohibits the importation of copyrighted goods without the authority of the copyright owner. However, the “first sale doctrine” entitles the owner of a lawfully made work to resell the work without the authorization of the copyright owner.

The Supreme Court ultimately concluded that the “first sale doctrine” applies to copies of a copyrighted work lawfully made abroad. As explained in the Court’s opinion, “Both historical and contemporary statutory context indicate that Congress did not have geography in mind when writing the present version of § 109(a) [the “first sale doctrine”].”

The Supreme Court further noted that the alternative interpretation favored by John Wiley & Sons would cause practical problems for booksellers, libraries, museums and retailers, which have long relied on the “first sale doctrine.” Further, the Court stated that the fact that the Copyright Act does not instantly protect an American copyright holder from unauthorized piracy taking place abroad does not mean the Act is inapplicable to copies made abroad.

Thus, under the Court’s holding, once foreign-made goods have been legally sold, whether domestic or overseas, copyright holders have no right to control further resale of those goods.  This means that publishers and other manufacturers that formerly exploited copyright to charge different prices to overseas and domestic consumers will have more difficulty doing so, as there will be importers who arbitrage by buying cheaper goods abroad and reselling at the US for prices lower than the manufacturer’s prices.  In essence, the decision legalizes the “gray market” in such goods.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

USPTO Offers New Tool to Determine Patent Term

The U.S. Patent and Trademark Office recently announced a new tool for patent holders. The online calculator enables members of the public to estimate the expiration date of a utility, plant, or design patent.

In general, patents based on applications filed after June 8, 1995 last for 20 years, starting from the application’s filing date. However, the patent termcan be shortened or extended by a number of factors, including:

  • Type of application (utility, design, plant);
  • Filing date of the application;
  • The grant date of the patent;
  • Benefit claims under 35 U.S.C. § 120, 121 or 365(c);
  • Patent term adjustments and extensions under 35 U.S.C. § 154;
  • Patent term extensions under 35 U.S.C. § 156;
  • Terminal disclaimer(s); and
  • Timely payment of maintenance fees.

As detailed by the USPTO, its new calculator tool “provides a best estimate of a patent’s expiration date, based on a comprehensive list of factors than can be found in USPTO records.” The calculator can be downloaded at www.uspto.gov/patents/law/patent_term_calculator.jsp.

While the calculator can provide valuable information, we recommend that individuals and companies still consult with an experienced patent attorney to determine if a patent is still in force. The USPTO also agrees, noting, “Before relying on an expiration date, individuals should always carefully inspect all relevant documents available through the USPTO, court records and elsewhere, and consult with an attorney.”

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Federal Circuit Patent Decision Highlights Inventors Must Be Mindful of On-Sale Bar

Companies must contend with a number of deadlines when seeking patent protection. Under the law prior to the America Invents Act, an inventor had to file a patent application within one year of publicly disclosing or selling the invention. The rule is commonly referred to as the “patent on-sale bar.”

In a recent case before the U.S. Court of Appeals for the Federal Circuit, the court shed light on the applicability of the on-sale bar. In a split decision, the panel invalidated Hamilton Beach Brands Inc.’s slow cooker patent because its foreign supplier offered to manufacture the product more than a year before the patent application was filed.

The Facts of the Case

 In Hamilton Beach Brands, Inc. v. Sunbeam Products, Inc., Sunbeam Products, Inc. defended a patent infringement action by Hamilton Beach Brands, Inc. by asserting that Hamilton Beach offered for sale and publicly used the Stay or Go® slow cooker, the commercial embodiment of the patent at issue, more than one year prior to the earliest possible filing date.

The on-sale bar applies when two conditions are satisfied before the critical date: (1) the claimed invention must be the subject of a commercial offer for sale; and (2) the invention must be ready for patenting. This case focused on the first requirement.

Hamilton Beach issued a purchase order to its supplier for manufacture of 2,000 units of its Stay or Go® slow cookers. Hamilton Beach listed on the purchase order its facility in Tennessee as the shipping address and its office in Virginia as the billing address. Shortly thereafter, the supplier, via email, confirmed that it had received the purchase order and noted that it would begin production of the slow cookers as soon as it received Hamilton Beach’s release.

The Court’s Decision

The Federal Circuit ultimately concluded that Hamilton Beach’s purchase order with the foreign supplier amounted to an invalidating commercial offer for sale under the on-sale bar. As explained by the court:

 Hamilton Beach’s supplier responded prior to the critical date that it was ready to fulfill the order. In other words, the supplier made an offer to sell the slow cookers to Hamilton Beach. At that point, the commercial offer for sale was made and, under the governing corporate purchase agreement, Hamilton Beach could accept the offer when it so pleased. And, Hamilton Beach concedes, as it must, that, had it provided a “release” any time after it received that email, a binding contract would have been formed.

 As further highlighted by the court, it did not matter that the offer was made by Hamilton Beach’s own supplier and was made to Hamilton Beach itself. In addition, the court noted that a commercial offer for sale made by a foreign entity that is directed to a United States customer at its place of business in the United States is sufficient to serve as an invaliding activity.

As this decision makes clear, the on-sale bar can be fatal to an otherwise valid patent. To avoid running afoul of the statute, inventors should consult with an experienced patent attorney who can carefully evaluate what types of activities may trigger the start of the one-year deadline.  Under the current law, it is advisable to file a patent application as soon as possible.

Success Under the AIA’s “First to File” System Requires Strategy Shift

Navigating the numerous changes under the America Invents Act (AIA) can be challenging. One of the most significant changes — the adoption to a first to file system — requires inventors to more carefully consider the timing of patent applications.

To take full advantage of the new regime, companies should be prepared to file “early and often.”

Under the AIA, a patent application will be denied based on prior art if “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” The provision expands the activities and publications that are considered to be “prior art” to patent applications.

Nonetheless, there are several key exceptions. For instance, if the inventor or another who obtained the subject matter from the inventor makes the disclosure, it is not considered prior art. In addition, disclosures made by a third party for subject matter that had been previously publicly disclosed by the inventor also fall under the exception. To qualify under the one-year grace period, these disclosures must be made within one year prior to filing a patent application.  The scope of these exceptions remains to be determined.  What if the invention was on sale privately but not “available to the public?”  Does that start the one year clock?

In light of the changes, it is advantageous to file a provisional patent application as soon as practically possible. These patent applications are relatively low cost and require far less documentation that a standard, non-provisional patent application.

After the initial filing, inventors should file additional provisional patent applications that reflect improvements to the invention in the form of additional patentable subject matter. So long as a non-provisional patent application is filed within one year, the disclosures can be combined into a single filing.

In summary, filing early and often is the best way to prevent headaches down the road, including subsequent and intervening disclosures.

If you need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me at 1-855-UR IDEAS (1-855-874-3327). Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.