Patenting in the Age of Crowdsourcing: An

Expanded Opportunity for Third Party Participation

Law Review CLE April 2013

Sherry L. MurphyMyers Bigel Sibley & Sajovec

Raleigh, North Carolina

Patent ProsecutionO Ex Parte procedure

O Between Applicant and the Patent OfficeO Normally an exchange between

Applicant’s representative and an Examiner

O Few instances where a third party may intervene

Patent Prosecution – 3rd Party Options for Comment

O Old Rule 1.99: third party submission of artO Restricted ability to submit relevant

art within 2 month window from publication

O Limited to 10 pieces of artO No comments or notations allowedO $180 fee

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 OfficeO No guarantee the refs will actually be

submitted

Patent Prosecution – 3rd Party Options for Comment37 CFR 1.291 – Protests

O Filed before publication or notice of allowanceO Can file protest after publication if

patent owner consentsO Patents, publications, or other

informationO No limits on number of documentsO Concise explanation of relevance

required

Citations in Patent Files

37 CFR 1.501O Submit patents or printed

publications in file of issued patentO Statement believe pertinent to

patentability of a claimO Serve on patent ownerO Can remain anonymous

America Invents ActO 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

America Invents ActO Section 8 third party art submission

provisions took effect September 16, 2012O Final rules published July 17, 2012

O Art submission provisions apply to: O Any application filed before, on, or after this

dateO 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

Patent Reform Under the AIA – More Public ParticipationO “[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

Patent Reform Under the AIA – Improving Patent QualityO “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

Crowdsourcing Patents

Crowdsourcing PatentsO 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

What is submittedO 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

What is Submitted

What is Submitted

What is Submitted

Examiner treatmentO Examiner must consider any proper

submissionO 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

Third Party Submissions: Old Versus New

Old Rule: CFR 1.99

New Rule: CFR 1.290

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

Third Party Submissions: Old Versus New – Cont’d

Old Rule: CFR 1.99

New Rule: CFR 1.290

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

But: Will We Use It?

OPatent practitioners/competitor companies

OOther members of the public

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 reviewO Broadest reasonable interpretation of

claimsO No presumption of validity

O No estoppel effect

HypotheticalO During a freedom to operate search

for her company’s new widget, Ann Attorney comes across a pending patent application with extremely broad claimsO Claims possibly read on the widgetO Ann does a prior art search to probe

validity should the broad claims ultimately issue

HypotheticalO 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 firmO No fee required because it is her first

submission and there are only 3 referencesO Her concise statement of relevance makes it

easy for examiner to apply them to a rejection

What may happen? O The examiner picks up the

submissions and proceeds to reject the application over the three references

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

ResultsO Patent Applicant is provided

opportunity to study the references and argue/amend, and include additional fall back positions in dependent claimsO May no longer read on widget; orO May still read on widget

ResultsO Applicant may also think application is

more valuable and be encouraged to put more effort into the patent family then they otherwise would have

ResultsO 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

Presumption of ValidityO 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)

Presumption of ValidityO 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

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

Hypothetical – no submission

O Patent issues covering widgetO Infringement may never be detectedO Company may decide to stop selling widget O Patent owner may not litigate; may seek to

license or assignO Litigation is expensive, and there are other

options that may be pursued short of litigationO 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)

Hypothetical – no submission

O Patent owner alleges infringementO References were not considered during

prosecution, so no deference based on examiner’s consideration

O But, claims still have presumption of validityO Many months and high cost before issue is even

reached in litigationO More limited ability for patent owner to amend

claims to get around references at this pointO 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

Hypothetical – no submission

O Ann could challenge the issued patent with inter partes reviewO Replaces inter partes reexamination under

the AIAO Available for all patents, regardless of

priority dateO Prior art limited to patents and printed

publications O Can be brought by the Company within 1

year of a litigation being asserted against it; litigation may be stayed

O Limited discovery; final decision in about 18 months

But: Will We Use It?

OPatent practitioners/competitor companies

OOther members of the public

CriticismsO 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?

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 2009O Limited to 400 applicationsO Limited to software and business methodsO 2,700 registered reviewers from more than 140

countries (most from U.S.) O Examiners used art in about 20% of applications

O Second pilot ran Oct. 2010 to Sept. 2011O Expanded to biotech,

telecommunications, others

O USPTO sent notices encouraging applicants to elect to participate

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!”

Article One PartnersO 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

Applications are now open to third-party submissions

O After September 16, 2012O Must comply with IDS-like formatting

requirementsO Pay fee for submitting more than

three references

Applications are now open to third-party submissions

O Examiner-initialed reference listing may be the only formal indication to ApplicantO Participants of e-Office Action

program may be notified of third-party submissions

O Check initialed listings against prosecution records

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

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

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 referencesO 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

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

Europe – a comparisonO Article 115 EPC and Rule 114 EPCO Third party submissions can be made

during prosecution any time after publication O Can remain anonymous, and no estoppelO Observations can be as short or as long

as desired, though the EPO favors “well-structured and concise third-party observations”

*With comments from Dr. Richard Gibbs, Marks & Clerk LLP, Glasgow

Europe – a comparisonO 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

Europe – a comparisonO Opposition – inter partes proceeding that

can be filed within 9 months after grantO Real Party in Interest can remain

anonymous O Longer wait, more expensive it can

becomeO 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

Europe – a comparisonO 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

Europe – a comparisonO 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

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-trialO Real party in interest must be identifiedO Limited Discovery O Estoppel applies

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

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 laterO 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

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

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

PCT ApplicationsO 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

PCT ApplicationsO Timing:

O From time of publication until 28 months from priority date

O Content: O Submit relevant art for novelty and inventive stepO Submit statement of relevanceO 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

PCT ApplicationsO 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 jurisdictionsO But how many PCT applications actually

enter the national stage?

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.”

Third Party Submissions – Will We Use It in the U.S.? O Perhaps under the right

circumstancesO Clearly unpatentable claims, need

FTO clearance or want to aid in limiting portfolio of competitor

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

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

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

Time Will Tell OQuestions? OComments?

smurphy@myersbigel.com

http://www.myersbigel.com