Patent Baristas

Earlier, Dr. Triantafyllos Tafas’ lawsuit, arguing that the proposed U.S. Patent Office continuation rules are void for exceeding its authority, won a permanent injunction prohibiting the USPTO from putting the new rules changes into effect (Final Rules; 72 Federal Register 161 at 46716).  Tafas v. Dudas and the United States Patent and Trademark Office.

Dr. Tafas had complained that the USPTO exceeded its Congressionally-delegated rulemaking authority and that the new rule changes specifically violate the Patent Act.  He was joined by SmithKline Beecham Corp., SmithKline Beecham plc, and Glaxo Group Ltd. (GSK) in claiming that the Final Rules, which change the patent system by modifying several long-established rules governing patent examination by the USPTO, are unlawful agency action under Section 706(2) of the Administrative Procedure Act (APA).

The District Court found that the Final Rules were substantive in nature and exceed the scope of the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2). Consequently, the Court granted summary judgment to GSK and Tafas and voided the Final Rules as otherwise not in accordance with law and in excess of statutory jurisdiction and authority.

The USPTO filed its appeal brief with the US Court of Appeals for the Federal Circuit asking the Court to consider the following questions:

1. Whether the USPTO’s revised rules of practice for patent cases are within the scope of the Office’s statutory rulemaking authority.
2. Whether the revised rules conflict with the Patent Act.
3. Whether the USPTO must provide public notice and comment for rules that are not subject to notice and comment under the Administrative Procedure Act.

Showing that the Patent Office sees applicants as the source of all their problems, they claim that:

[U]nlimited recourse to continuation applications and RCEs has led to misuse and abuse.  Some applicants “rely on an unlimited number of continued examination filings to correct deficiencies in the claims and disclosure” that could have been avoided by greater diligence and care in the preparation of the initial applications.

The Office’s arguments for authority come down to:

1. The Final Rules are within the scope of the USPTO’s rulemaking authority under the Patent Act. The Act’s primary grant of rulemaking authority, Section 2(b)(2), authorizes the Office to issue rules that “govern the conduct of proceedings in the Office,” “facilitate and expedite the processing of patent applications,” and “govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office.”
2. In the course of its ultra vires analysis, the district court held that the Final Rules are inconsistent with other provisions of the Patent Act.  That holding is likewise incorrect. The court mischaracterized the effects of the Final Rules, misconstrued the statutory provisions, misunderstood the judicial precedents concerning those provisions, and failed to give the USPTO’s construction of the provisions the deference required by Chevron.

Now, both GSK and Tafas have filed their reply briefs in response to the USPTO’s filing.  Their argument is as follows:

Article 1, Section 8 of the U.S. Constitution gives Congress the power to establish laws governing the United States patent system.  Congress has considered vesting the PTO with substantive rulemaking power, but has chosen not to do so. Congress has to date given the PTO only limited rulemaking authority to govern the conduct of proceedings in the Office.

Instead, Congress created this Court and vested it with the power to interpret the patent laws. In carrying out that duty, this Court has dispelled any doubt regarding the PTO’s limited rulemaking authority, holding that the PTO’s broadest powers do not include substantive rulemaking.  See Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996).  This case arises out of the PTO’s decision to spurn these limits; ignore the Constitution, Congress, and this Court; and promulgate the substantive Final Rules that violate well-established patent law and fundamentally alter patent practice.

The Final Rules do that by, among other things, limiting the number of continuing applications, requests for continued examination (RCEs), and claims that an applicant may file. In issuing these rules, the PTO makes an unprecedented and unlawful grab for power that threatens both incentives to innovate as well as the authority of this Court, the Supreme Court, and Congress. Indeed, by enacting the Final Rules, the PTO attempts to grant itself the authority to do exactly what this Court and its predecessor court have repeatedly told the PTO it lacks the power to do.

While the USPTO claims to have been given broad powers owing to a broad Chevron deference. The PTO contends that the district court should have deferred to the PTO’s views — even in the face of contrary precedent from this Court — that the Final Rules: (i) fall within the PTO’s delegated authority; and (ii) constitute a lawful use of that authority. GSK argued that this is BS for the following reasons:

First, the scope of the PTO’s rulemaking authority is a threshold legal question for which no deference is owed. See Borlem S.A.-Empreedimentos Industriais v. United States, 913 F.2d 933, 937 (Fed. Cir. 1990). As the Supreme Court has explained, “[a] precondition to deference under Chevron is a congressional delegation of administrative authority.”  Adams Fruit Co. v. Barrett, 494 U.S. 638, 649 (1990) (emphasis added).  It is the role of the courts, not the PTO, to assess the scope of the PTO’s delegated authority.  Indeed, it would be ill-advised to defer to the PTO’s self-interested views on the reach of its own power.

Second, the Final Rules are due no deference because they are substantive, and this Court conclusively held in Merck that the PTO lacks substantive rulemaking authority.  Merck, 80 F.3d at 1549-50. Several recent decisions of this Court have reiterated Merck’s holding.  See, e.g., Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336 (Fed. Cir. 2008).  The Final Rules are substantive because they “constitute a drastic departure from the terms of the Patent Act” and “effect changes in GSK’s . . . existing rights and obligations.”  Tafas/GSK II at 814. Thus, the Final Rules exceed the PTO’s limited authority and are not entitled to any deference.

Third, the Final Rules cannot be given deference because they contradict the patent laws and precedent of this Court and its predecessor.  See 35 U.S.C. § 2(b)(2) (stating that the PTO “may establish regulations, not inconsistent with law”). Final Rules 75, 78, 114, and 265 impose arbitrary and mechanical limits on the number of continuing applications, RCEs, and claims that applicants may file. These restrictions contradict Sections 112, 120, and 132 of the Patent Act, as well as the authoritative constructions of those sections, which establish that applicants have the right to file as many good-faith continuing applications, RCEs, and claims as they deem necessary.

Not content to leave it at that, GSK goes on to state that the Final Rules are also flawed on two other grounds:

First, the ESD’s preexamination search requirement is unconstitutionally vague.  It fails to provide fair notice as to how to comply and expressly requires applicants to search the entire world for prior art without regard to scope, time, or cost.

Second, the Final Rules apply retroactively to pending applications in an impermissible manner.  They impose “new duties” on completed transactions (previously filed patent applications) and “impair rights a party possessed when he acted” (the right to fully protect an invention in exchange for relinquishing a trade secret).  See Landgraf v. USI Film Prods., 511 U.S. 244, 280 (1994).

Note that the Tafas brief cites Donald Zuhn’s coverage of the BIO conference panel discussion on the impact of pending USPTO rules changes and possible patent reform legislation.

Read the entire briefs here:

Tafas Reply Brief
GSK Reply Brief
IPO Amicus Brief

More here:

No Joke, Court Smacks Down New Patent Rules
Patent Rule Injunction, Court To Sleep On It
Examination Support Document (ESD) Could Add $26,000 to Patent Costs
Is the Public Interest Really Upheld by the New USPTO Rules?
Court Blocks New USPTO Rules on Continuations and Claims — For Now
Patent Wars Episode II: GSK Strikes Back

BIO’s Intellectual Property Counsel Committee is holding its Fall Conference and Committee Meeting on Oct. 20-22, 2008, at the Hard Rock Hotel at Universal Orlando, Orlando, Florida.

BIO’s semi-annual IP Counsels’ Committee Conference is an excellent opportunity for BIO members to hear, listen, and learn about current and projected topics related to biotechnology IP.

In the past, this has been a members’ only conference and closed to any type of media, social or otherwise.  However, BIO has graciously agreed to allow me to attend and blog about the conference.  Look for updates later this month.

Panelists include:

• John Doll, Commissioner for Patents, US Patent & Trademark Office
• Dr. Hans Sauer, Assoc. General Counsel for Intellectual Property, BIO
• Andy Brookes, VP & Chief IP Counsel, Biogen Idec
• Thomas Kelley, Patent Counsel, Monsanto Company
• Ken Dow, VP, Patents & Assistant Patent Counsel, Johnson & Johnson
• Maggie Shafmaster, Senior VP & Chief Patent Counsel, Genzyme
  and many others.

Among topics to be discussed:

• Innovative mechanisms for PTO workload management
• US Patent and Trademark Office recent developments, rulemakings, and initiatives
• Implications of recent case law
• Updates on patents and IP around the world
• IP licensing and other contractual agreements
• Open innovation models

I hope to see you there.  More information is available at the IPCC Conference website here.

Yes, the country’s financial system may be in total meltdown right now but your company can still benefit from the Global Cardiovascular Innovation Center (GCIC).  On top of developing and acquiring new technologies, the GCIC also looks to launch new cardio companies and recruit companies with $30 million in investable cash.

The GCIC has announced the next round of the Commercialization Funding Program beginning with a formal request for proposals to be released on October 1, 2008.

GCIC is calling for proposals from companies and institutions seeking to commercialize innovative cardiovascular technologies. GCIC can provide development assistance and financial support to advance promising technologies through development and commercialization milestones.

Proposals for cardiovascular technology commercialization projects will be accepted from research institutions and companies currently located in Ohio or seeking to develop a presence in Ohio.  Projects will be evaluated on technical, commercialization and economic development merits.

Proposals due on November 21, 2008.

The Global Cardiovascular Innovation Center is a $250 million product commercialization consortium made possible by a $60 million grant from the State of Ohio’s Third Frontier Project. The consortium is led by the Cleveland Clinic and includes Case Western Reserve University, the Ohio State University, the University of Cincinnati, the University of Toledo and University Hospitals of Cleveland, along with leading industry and economic development partners.

More at the GCIC website.

Lighting up the law web pages these days is the lawsuit by the law firm Jones Day against BlockShopper LLC and two individuals associated with the website, for allegedly using Jones Day’s service marks and linking to its website in at least two articles discussing Chicago real estate transactions of Jones Day associates.  Jones Day v. BlockShopper.com, No. 08 C 4572 (N.D. Ill.) (Darrah, J.).

Jones Day claims service mark infringement, Lanham Act false designation of origin, Lanham Act dilution, and state law deceptive trade practices and unfair competition. Jones Day also moved for a temporary restraining order (TRO), which the parties stipulated to, ordering defendants not to:

1. use Jones Day’s service mark;
2. use any content from or link to Jones Day’s website; or reference Jones Day in Blockshopper headlines.

BlockShopper.com is a web site that reports on real estate purchases in two upscale Chicago neighborhoods (as well as in Las Vegas, Palm Beach, and St. Louis).  It’s a little like the People Magazine of real estate web sites.  Postings generally appear something like:

Patent Lawyer Sells Condo in Metropolis

Jane Doe sold her two-bedroom, 2.1-bath condo at 123 Maple St. in Metropolis for $500,00 to John Smith.  Doe paid $10,000 for for it back in January 2005. Doe is a partner in the Metropolis office of West Coast law firm Reely, Big and Hat LLP. She specializes in intellectual property law for the firm, including patent litigation involved with the gardening arts. She joined the firm in 2006.

Apparently, in serving up info about purchases by Jones Day associates Dan Malone and Jacob Tiedt, BlockShopper used the name Jones Day to identify the employer of each of the two associates, and linked from each associate’s name to Jones Day’s web site. According to the complaint, the defendants used Jones Day’s name, posted information and pictures from the Jones Day web site and put links in the articles to the Jones Day web site.

Paul Alan Levy from Public Citizen describes the scenario thusly:

According to Jones Day, linking to its web site dilutes its trademark and creates a likelihood of confusion. But that is preposterous. The link is in connection with a comment on Jones Day; when a trademark is used to comment on the trademark holder, the use reinforces the association with the trademark holder, rather than blurring it, and besides use for commentary is expressly protected as fair use under the Lanham Act as amended in 2006. Moreover, nobody could visit the BlockShopper web site and think that it is sponsored by or affiliated with Jones Day, even if they follow the links from BlockShopper’s mention of Jones Day associates to Jones Day’s own web site. That is what web sites do — they link to other web sites (that’s what makes it a “World Wide Web”).

Blockshopper filed a motion to dismiss and public interest groups (Public Citizen and the Electronic Frontier Foundation) have filed an amicus brief in support of Blockshopper arguing that the trademark claims are barred by the First Amendment, which protects the right to publish truthful information even if the information is about a trademark holder and hence uses the trademark to convey the truth .

In response, Jones Day ups the ante by filing a response against the brief saying the judge should not consider the amicus brief because the groups are “partisan.” It also states that the groups should not be able to file the amicus brief because it doesn’t add anything beyond what the defendant has already filed– while simultaneously saying that the brief shouldn’t be allowed because it adds a new argument.

It is difficult to understand how such a well regarded, multi-national law firm could get caught up in such a no-win situation.  Unfortunately, Jones Day may have boxed themselves in.  It will be difficult to extract themselves from the suit without looking like they made a mistake getting into it in the first place even as they gain a growing body of negative press every day it continues.

(More at: Chicago IP Litigation Blog, Ambrogi, Legal Blog Watch, Citizen Media Law Project).

Blawg Review #17 is up on Securing Innovation, the business blog of IP.com Inc. SInce September 29th is Día del Inventor in Argentina, this week’s Review is in commemoration of Hungarian inventor Laszlo Biro. Biro brought us the ballpoint pen 70 years ago this summer (designed in his garage in Buenos Aires).

After obtaining the patent rights to a ball pen, Marcel Bich introduced his own ball pen in France in December 1950 under the name BIC, a shortened, easy-to-remember version of his own name. In 2002, the BIC® Cristal® ballpoint pen entered the permanent collections of the Museum of Modern Art of New York (MOMA), at the Department of Architecture and Design. By 2005 BIC had sold its hundred billionth ballpoint pen. (Did you ever wonder where the BIC® logo comes from?)

The American Bar Association Section of Intellectual Property Law has launched Landslideâ„¢, a bi-monthly magazine that offers news and analysis on patents, trademarks, copyrights and related topics. Written by and for an audience of intellectual property lawyers, the magazine will cover this rapidly evolving legal specialization through an emphasis that includes business, technology, the arts, legislation and international developments.

In this IP-heavy edition of Blawg Review, we note that on the Patent Librarian’s Notebook, there’s a comparison of free patent databases.  Meanwhile, David Pearce at IPKat explains how the USPTO/EPO clogs up the prosecution highway with red tape. This test scheme will allow patent applications that have been examined and allowed in either the USPTO or the EPO to be fast-tracked in the other office.

We’re still trying to understand how some fruit now comes with an end-user license agreement to protect the intellectual property (Jeremy Telman at the ContractsProf Blog).

It’s not often that a fiction thriller comes along featuring a patent attorney as the lead character so I was anxious to see such a combination in Paul Goldstein’s novel “A Patent Lie.”  Labeled as “Owning the truth is a matter of life and death,” the book melds technology, ethics and law.

Paul Goldstein is an intellectual property law professor at Stanford Law School and the author of Goldstein on Copyright and Copyright, Patent, Trademark And Related State Doctrines.  A Patent Lie is the second novel by Goldstein (his first is Errors and Omissions) and features a plot that unfolds around forty-seven year old attorney Michael Seeley, a solo practitioner patent attorney in Buffalo, NY.

When his estranged younger brother, Leonard, stops by to see him, we find that Leonard works as the chief medical officer for a small biotech company that has developed and patented a promising AIDS vaccine (AV/AS).  Leonard wants Michael to step in to help but his motivation is left unclear.

We learn that the company, Vaxtek, has filed a patent infringement lawsuit against a traditional big-pharma drug company named St. Gall Laboratories.  But, Vaxtek’s lead attorney has seemingly committed suicide in a nasty “threw himself in front of a train” incident. Leonard now wants his brother to take over this case — presumably because of familial bonds and not because of lack of lawyers in the world.

Putting aside the various family problems between the two siblings, Michael goes out to San Francisco to try the case with the assistance of another attorney, Chris Palmieri.  Michael’s preparation for the trial and the subsequent trial make up the meat of the novel.  Fortunately, the book is an easy read with a David vs. Goliath story line that keeps you engaged.

“A Patent Lie” is a good legal thriller with a variety of characters to keep you engrossed including love interest Lily Warren, a vaccine researcher, supposed inventor of the AIDS vaccine Alan Steinhardt and Joel Warshaw, the owner of Vaxkek.  The story weaves together patent inventorship along with questions on immigration — a source of many of the top biotech scientists in the U.S.

In many ways the story is, like patent attorneys in general, intellectual and methodical in its execution so it sometimes gets bogged down in more legal information than some readers may want from their fiction.  However, I suspect purchasers of this book will be those looking for books with plenty of substance to enjoy.

If you want patent law in more pulp fiction packaging, try Mission: Impossible 2 where IMF member Ethan Hunt must stop the villainous Sean Ambrose, a former fellow-agent gone bad who’s trying to make billions of dollars by unleashing a deadly virus on society while holding the patent on the antidote.

In the only movie I can think of where the super-villain in a (so-called) patent troll, director John Woo delivers all the explosions, bullet fire, car crashes and adrenaline-fueled visuals without being bogged down with details like plot lines and dialog.

For what it’s worth, the only other fictional story about a patent attorney I found is “Notes of a Patent Attorney: The Wally Mason Stories,” (Paperback) by Brian C. Coad.

The Starbucks Coffee Company has apparently decided not to protest the logo of the Rat City Rollergirls, a Seattle-based roller derby league.  According to Starbucks, the company had concerns about a “very similar look and feel of the logo.”

Under trademark law, Starbucks had asked for an extension to file an official objection to the Rollergirls’ logo with the U.S. Patent & Trademark Office.  However, since Starbucks has not follow-up with a challenge and and their trademark inquiry has been automatically terminated.

We won’t know why Starbucks dropped the issue but it probably has something to do with the (lack of) likelihood of confusion between a coffee shop and what amounts to female “wrestling on wheels.”  But, Starbucks has been know to be aggressive in protecting its mark and has sued plenty of others over trademark issues.

Earlier, Starbucks has won a trademark infringement suit against a Chinese company which opened a chain of coffee shops under the name Xingbake – Chinese for Starbucks.  The Chinese court ordered Shanghai Xingbake to stop using its name, to pay RMB500,000 ($62,000) in compensation to Starbucks and to issue an apology in a local newspaper.

In another case, a federal court ruled that Sam Buck had change the name of her Astoria, Oregon coffee shop and pay hundreds of thousands of dollars to Starbucks to cover its legal fees following a legal battle that lasted three and a half years.

The Rat City Rollergirls have, by default, the green light to use their trademark and will not have to change their logo.

More at Slog.

R.I.P. Heller

The San Francisco law firm Heller Ehrman will formally vote today to dissolve, chloroforming a law firm that survived earthquakes, a depression, wars and social upheavals but was unable to compete in a new global economy. An overview of “What have we learned from this collapse of a century old, over $500-million in revenue firm” is presented by Adam Smith, Esq.  The Wired GC also reports on Law Firm Mergers: Bridesmaid Revisited.

Doctor Perks

In a preemptive strike against likely regulations to curb influence of money on medical research and practice, the NY Times reports that two pharmaceutical companies say they will begin publicly reporting payments to doctors. Eli Lilly & Company announced that starting next year it intended to post an online database of all its payments to doctors for speaking and consulting services. The postings will likely include the names of the doctors, or will provide some other identifying information about them, along with the reason for the payments.  Merck & Company said that it would disclose speaking fees it pays to doctors, also beginning in 2009.

In other news related to medical perks, The Wall Street Journal reports on a federal lawsuit filed by a former company lawyer claiming Medtronic allegedly furnished spine surgeons illegal incentives including visits to strip clubs, undeserved patent royalties, and lavish trips.  According to the lawsuit, Medtronic used the perks to encourage spine surgeons to use its spinal products, including its Infuse Bone Graft. Senator Charles Grassley (R-Iowa), who has been investigating whether Medtronic has been using illegal kickbacks to encourage off-label use of the Infuse Bone Graft, has repeatedly asked Medtronic to supply an un-redacted copy of the Memphis lawsuit.  So far, the company has refused to do so.

The ‘Wearing Down Examiners’ Fallacy

Just a Patent Examiner has a rebuttal to the argument that patent reform is needed to prevent applicants from “wearing down” the Examiners.  The theory is that by taking advantage of (or abusing) the unlimited continuations available to applicants, applicants can wring an undeserved allowance from an examiner simply by refusing to abandon the application.  According to JAPE, this is wrong.  Every time an applicant files an RCE (or a straight continuation), the examiner receives a count for the express abandonment, and another count for the first action after RCE.  It also makes the Examiner’s job easier:  “Speaking for myself, examining a continuation really does give me a serious head start.”

Barack Obama In 18 Science-Related Questions

Barack Obama recently answered 18 science-related questions for Nature (John McCain’s campaign declined).

Excerpt: What would you do to help restore impartial scientific advice in government?

Obama: I will restore the basic principle that government decisions should be based on the best-available, scientifically valid evidence and not on the ideological predispositions of agency officials or political appointees.

In addition he propose to:

• Strengthen the role of the President’s Council of Advisors on Science and Technology (PCAST) by appointing experts who are charged to provide independent advice on critical issues in science and technology; and
• Restore the science integrity of government and restore transparency of decision-making by issuing an Executive Order establishing clear guidelines for the review and release of government publications, guaranteeing that results are released in a timely manner and not distorted by the ideological biases of political appointees.

McCain has similarly pledged to fill key technical positions in his administration with qualified scientists and engineers, including having a science adviser working directly with the president.  Obama’s answers to additional questions (on topics including biosecurity, the nuclear weapons laboratories and US participation in international projects) can be found here.