An updated URGENT alert that the new U.S. first-to-file patent reform laws are now less than two weeks away. Many companies, whether nanotech, cleantech, biotech, or other types of emerging technology companies, should consider the merits of filing new, quality patent applications by March 15, 2013. Time is flying in 2013. The USPTO recently issued its finalized rules and processes for implementing the new system.
Also, bear in mind the new US PTO fee system activates March 19, 2013.
The final phases of U.S. patent reform become active on March 16, 2013 when the U.S. patent system switches to a “first-to-file” system. The USPTO has to date only issued draft guidance on this switch. Hopefully, they will issue final guidelines soon so patent applicants can adapt well to the new regime, particularly if the final guidelines differ from the draft guidelines issued last August 2012. Many patent applicants will want to consider filing applications before March 16, 2013 if appropriate to avoid the new law. In some cases, split parallel filings, rather than a single filing, may be a good call. Hence, planning should have started by now.
While patent reform impacts all technologies, not just nanotechnology and clean technology, the patent filing rates in these sectors are rising, so attention to patent reform is particularly needed in these sectors.
Finally, March 16 is a Saturday so it would be very good to have all the ducks lined up on or before March 15, 2013 !
In a move which could favorably impact the National Nanotechnology Initiative (NNI), House Congressional Republicans recently selected Rep. Lamar Smith (R-Texas) to chair the House Committee on Science, Space and Technology. Rep. Smith has been a supporter of nanotechnology, having sponsored legislation such as HR 5940 to improve the National Nanotechnology Initiative. A statement released by Rep. Smith on his Web site reads as follows:
Chairman Smith:
“As Chairman of the Science Committee, I will be an advocate for America’s innovators by promoting legislation that encourages scientific discoveries, space exploration, and the application of new technologies to expand our economy and create jobs for American workers.
“Over 80% of the Committee’s $39 billion budget touches on research and development. We can’t have innovation without research and development. And the purpose of the Science Committee is to encourage the R&D that leads to new innovations.
“The Science Committee can play an exciting part in the discoveries of science, the exploration of space and the development of new technologies. I appreciate the confidence of my colleagues and look forward to chairing the Committee next Congress.”
House Speaker John Boehner supported Smith’s appointment.
Speaker Boehner:
“Throughout his tenure on the House Judiciary Committee, Lamar has been a strong leader on important issues facing the American people. He is dedicated to promoting economic growth to help put Americans back to work, encouraging innovation and promoting national security. I am confident that he will bring the same strong leadership and work ethic to the Science Committee as Chairman, and I look forward to working with him in the 113th Congress.”
Established in 1958, the Science, Space and Technology Committee has jurisdiction over all non-defense federal scientific research and development. Specifically, the Committee has partial or complete jurisdiction over the following federal agencies: NASA, the Department of Energy, the Environmental Protection Agency, the National Science Foundation, the Federal Aviation Administration, the National Oceanic and Atmospheric Administration, the National Institute of Standards and Technology, FEMA, the U.S. Fire Administration, and United States Geological Survey, among others.
The Committee has five subcommittees – the Subcommittee on Energy and Environment, the Subcommittee on Investigations and Oversight, the Subcommittee on Research and Science Education, the Subcommittee on Space and Aeronautics, and the Subcommittee on Technology and Innovation.
As chairman of the House Judiciary Committee, Smith has spearheaded the patent-reform legislation known as the America Invents Act. He has also worked to increase opportunities for foreign graduates with science and engineering degrees to remain in the United States.
The recent, large judgement against Samsung in the Apple v. Samsung patent litigation has again brought patenting to the front pages of American news media. In that context, the September 16, 2012 and March 16, 2013 critical dates for when fundamentally new patent law takes effect takes on added importance. It is crucial for the innovation community to master the new patent law and PTO regulations. We will be presenting a timely panel discussion Wednesday morning September 5, 2012 in Boston regarding updates in patent reform including critical topics such as the new first-to-file system, what remains of any “grace period,” Inter Partes Review, Post Grant Review, and the like. The panel is part of the Nanomanufacturing Summit 2012 in combination with the annual meeting for the NanoBusiness Commercialization Association.
We stress, in particular, that while the March 16, 2013 date for the start of the first-to-file system seems a “long way away” today, it is not. Innovators need to plan now to adopt procedures and patent programs so as to be ready for March 16, 2013 (i.e., need to hit the ground running!).
The 11th Annual Nanobusines Conference will be held September 4-6, 2012 in Boston, in conjunction with the Nanomanufacturing Summit.
We are planning a session on patenting and important updates with patent reform. Last year’s panel provided for a lively conversation as the new patent law was reviewed. Now, new developments have surfaced one year later as critical regulations are being implimented. We hope you can attend.
We are urgently reviewing the proposed PTO fee increases based on PTO documents issued over the past week. The US PTO appears to agree that some of the steep fee increases, particularly the RCE fee increases, will be controversial. We encourage in 2012 all nanotech entities, cleantech entities, and every other entity under the sun who values patenting to engage in careful study of the proposed rules to guide the PTO away from the proposed paths of steep fee increases. The PTO purports to be willing to listen to comments in 2012. Got it. We understand the PTO wants more money. They might even need more money. BUT, there are limits to the concept if innovation in the U.S. is to be encouraged, and a stronger sense of gradualism by the PTO on resolving money issues would seem in order.
Two items of note today:
1) The US PTO today finally issued its proposed rules to implement its novel procedure called supplemental examination. Bad news; and maybe outrage to follow. They will charge a PTO fee of $5,180.00 “for processing and treating a request for supplemental examination.” They will also charge a whopping fee of $16,120.00 “for ex parte reexamination ordered as a result of a supplemental examination proceeding.” !
Even more, to file a request for reexamination will cost $17,750.00 in PTO fees.
The public has two months to comment (to express their outrage?).
2) Also, I participated in a panel at American University today on patent reform and post-grant review processes. I tried to express the need, conveyed by clients, that the complexities of the patent system need to be held in check, particularly for small business innovators. Now it also appears that costs also appear to be in need of holding in check in the new US PTO. One can only guess the PTO fees for things like inter partes review or post-grant review. Numbers like $40,000 were noted on rumor-like basis.
The humor was along the lines of one can buy a nice car with these fees!?
Cleantech & Nano Blog is a proud sponsor of ACI’s “A Practical and Tactical Guide for Maneuvering New and Amended Procedures and Mastering the Intricacies of PTO Practice in the Wake of Patent Reform” forum to be held on March 26 and 27, 2012 in New York City.
Information provided by ACI:
The America Invents Act (AIA) is one of the most sweeping and iconoclastic pieces of legislation in more than half a century. Not only did the AIA reform the basic tenants of the American patent system, but it also lead to the evolution of PTO procedures. Under the AIA’s auspices, some procedures have been amended and others newly created. The AIA has, in essence, created a new type of litigation before the PTO- or more specifically, the Patent Trial and Appeals Board (PTAB) which it also put into being. Patent attorneys representing a variety of industries from nanotechnology – to medical devices – to financial services – to tech and consumer products are now pondering these new and amended procedures and how they will impact current and future strategies.
Over the past two months, we have been informing clients about comprehensive patent reform. The best question received to date: How much will this reform impact corporate IP budgets?
Thoughts? Hopefully, Congress considered that before passing the legislation!
Over the past month, we have been busy providing inputs to clients, including a variety of different types of organizations, on the new patent reform. Despite the variety in types of organizations, a common theme emerges:
this is a good time to step back and look at your organization as a whole and determine how IP is fitting into the goals, strategy, and tactics.
One will have to master the new patent reform to continue to compete strongly. Many nanotech and cleantech ventures have IP as a central pillar, and the pillar must be continuously examined in view of new developments and insights.
I enjoyed attending the recent NanoBusiness Commercialization Association Conference in Boston on September 26-27.
We provided a panel discussion on patent reform which provided spirited questions and comments. For example, concern was expressed from the audience that large companies would use new post-grant review processes to hamper the progress of small companies with new patents. We also stressed that faster filing and more active use of provisionals may be needed with a first-to-file system. However, such increased activity should not detract the quality of filings if possible. Provisional filings, where possible, should be high quality applications where the points of novelty have been examined in claims, and an enabling disclosure drafted. One additional point of discussion was whether the greater clarity which comes from eliminating interferences is good.
Other good topics in presentations included the nanosolar sector, updates in the IPO and exit strategies, impact of the Solyndra situation, and meeting with government officials active in NNI management and guidance.
Join the nanotechnology community beginning Sunday, September 25, 2011 for three days of dynamic discussion among leaders from emerging areas of nanomanufacturing and commercialization of nanotechnology-enabled products. Foley is proudly sponsoring the panel, “A New Patent Era! Reform and Recent Court Decisions Impacting IP Strategy and Valuation” which will includes the following guest speakers:
The Summit is co-organized by the National Nanomanufacturing Network (NNN) and the NanoBusiness and Commercialization Association (NanoBCA) (formerly the NanoBusiness Alliance).
Click here for additional details on the Nanomanufacturing Summit 2011 & 10th Annual NanoBusiness Conference.
For additional information on patent reform, please visit www.foley.com/patentreform.
Hope to see you there!
We called the US PTO today to confirm one important point: universities and other applicants will have to wait for more rule-making to use the new micro entity status. This gives a 75% discount on many PTO fees for selected applicants, including qualified universities, per new 35 USC Section 123.
Many commentaries on patent reform have simply said the new micro entity law is effective September 16, 2011. However, rule-making must be considered.
Time will tell how long the wait is. University patenting and technology transfer is, of course, an important element of cleantech and nanotech.
Before signing patent reform legislation on Friday, September 16, 2011, President Obama spoke briefly of new federal innovation initiatives which include nanotech and cleantech. More detailed information has been provided.
Nanowerk reports some of the developments: "The National Institutes of Health will collaborate with the Defense Advanced Research Projects Agency (DARPA), and the U.S. Food and Drug Administration to develop a chip to screen for safe and effective drugs far more swiftly and efficiently than current methods, and before they are tested in humans. The chip will be loaded with specific cell types that reflect human biology. It will be designed to allow multiple different readouts that can indicate whether a particular compound is likely to be safe or toxic for humans."
DARPA’s press release, with an emphasis on vaccines, also was provided. The NIH also had a press release.
Some of the political framework, if not controversy, has been noted in the press.
In addition, an additional NIH press release focused on more efficient exclusive license options for start-up companies as part of the administration’s Startup America initiative.
President Obama finally signed the America Invents Act for patent reform and also provided interesting remarks before signing. A video of his remarks and his signing is available, including opening comments from a Thomas Jefferson student who has a patent already.
In addition, in the middle of the President’s remarks, he made some brief remarks about a new center at the NIH related to commercializing pharmaceutical drugs, about a hundred or more universities working together in new programs to commercialize research, and the commercialization of biotechnology generally which also links to cleantech. These vague remarks were fleshed out more in a White House press release provided today.
Technology innovation is tremendously important to our society, and tuning the patent system is important. One can argue our society will rise or fail depending on technology innovation. Few if any presidents, captured as they are by political intrigue rather than substance, have truly captured the innovation spirit. Obama seems to be trying and doing as well as anyone of them in modern times at least.
"There is a business adage that says, ‘You win in the turns.’ That is, when there are big shifts in the marketplace, the best companies gain market share and put distance between themselves and their competitors because they have the vision and flexibility to spot tectonic change and leap ahead when it occurs, while others are simply overwhelmed."
This interesting quote taken from a new book: Thomas Friedman & Michael Mandelbaum, That Used to be Us, How America Fell Behind in the World it Invented and How We Can Come Back, 2011, pages 34-35.
Assuming President Obama signs the patent reform legislation Friday as announced, we are at a fundamental turning point in the US patent system. By analogy, will the US win in the turns? I am very interested to see what sort of presidential remarks will be made with respect to innovation policy as part of signing this legislation, and whether they will move beyond platitudes and existing pronouncements. Earlier reports had indicated remarks may be made with respect to commercializing university research.
The central feature emphasized in the patent reform is moving to a first-to-file system. I have been reading much commentary suggesting that this fundamental change will help "large" companies and harm "small" companies. I also read much commentary that the key to new job growth resides with small companies. Hence, the government and private sector must watch carefully the impact of patent reform on new job creation.
In their new book, Friedman and Mandelbaum believe the US PTO and our patent system are a leading example of necessary regulations on private activity including safeguards and incentives. See pages 35-36. They also, however, cite a McKinsey report noting the PTO’s backlog as an obstacle to job growth. See page 322. Challenging days are ahead to reduce the backlog when some in Washington want to cut back on funding while more-and-more want to file new patent applications. The result could be more backlog. Hopefully, no one loses in the turns.
One of the central aspects of the recently passed patent reform in Congress is the elimination of the best mode defense by amendment to 35 USC Section 282. However, Congress did not in parallel eliminate the best mode from the requirements of 35 USC Section 112. In other words, the US PTO is still supposed to grant patents which satisfy the best mode requirement, but if that does not happen, this violation is not a defense in litigation. In past practice, the US PTO has not sought to evaluate best mode as part of examination.
Best I can tell, the odd legislation as passed represents two competing goals: (1) Congress likes a high-quality disclosure of the invention (hence, it did not amend section 112) ; (2) Congress does not want abusive litigation tactics based on best mode (hence, it amended section 282).
Note: the amendment to Section 282 also appears to remove best mode as a basis for an inequitable conduct defense. Also, best mode cannot be used as a basis for a post-grant opposition.
Quite possibly, the US PTO will provide further guidance on how it will treat best mode and what it expects from applicants in this new legal era. Also, some countries (e.g., Australia) may still require a best mode disclosure. One can check with an expert in each country. If one eliminates the best mode, one might eliminate something essential, which could impact enablement. In some cases, disclosure of the best mode might provide useful support for a non-obviousness position.
Hence, patent applicants need to stay awake. In particular, those working in the chemical, nanotech, and cleantech arts frequently encountered best mode issues. For example, a chemical patent was found by the Federal Circuit earlier this year to have been in violation of the best mode. However, one suspects that the US PTO will have its hands so full dealing with the new law that it will not have time to deal effectively with best mode issues.
Finally, the new best mode law is effective on the date of enactment and shall apply to proceedings commenced on or after that date. News reports and rumors have the President signing the legislation this Friday, September 16, 2011.
Patent reform is widely being discussed now since Congress passed the legislation last week and President Obama is waiting to sign the legislation. I found it interesting that a leading university group, AUTM, applauded the passage on their website, whereas a leading angel investor I listened to is against it. The issue there is whether the massive change and uncertainty would represent increased risk and prevent investments.
At a NanoBusiness Commercialization conference, we will be presenting a panel in Boston on Monday morning September 26, 2011 to discuss patent reform and other important developments in patent law. In particular, the panel will include representatives from the start-up community. We hope you can join us. Patent reform is not unique to the nanotech and cleantech innovation communities, but the communities thrive best on a well-functioning patent system.
Perhaps the leading clear point on patent reform is that organizations which master the new patent era will be better situated compared to those that do not.
OK, Congress passed patent reform today. Finally. The PTO will certainly have a lot of work to do in preparing the regulations needed to implement the new law. Six years it took. There is an old saying about political debate, "Be brief, be brilliant, be gone." The reform process was not brief. Time will tell whether it was brilliant. The issues that drove it certainly are not gone.
The Senate – finally – will vote on patent reform today at 4 p.m. President Obama – finally – will sign the legislation soon after. The President’s speech on jobs is set for this evening, and patent reform may be mentioned in the speech. However, no one quite knows with certainty what the impact will be on the current unemployment rate.
Some media reports are concluding that the bill favors larger companies over start-up companies.
Cleantech and nanotech companies need to immediately understand the impact of this reform on their strategy. Perhaps the only certainty is that companies, universities, federal labs, and other entities, that do not understand the patent reform will be at a disadvantage compared to those that do.
Last week, the House passed complex patent reform legislation, HR 1249. In considering how this might be reconciled with a Senate version passed earlier this year, PTO fee diversion is a key issue. Many in the high tech community, including cleantech and nanotech, would like to see fee diversion end so as to promote a stronger US patent system. However, another issue was noted by Erin Coe’s article in IPLaw360 which links to the PTO’s green tech accelerated examination program. Coe writes:
"Another measure only mentioned in the House bill authorizes the USPTO to grant priority examinations to technologies that are critical to the U.S. economy.
The USPTO already has a pilot program in place allowing a certain number of green technology patent applications to take priority over other patent applications, but this provision would give the USPTO director broader authority to declare other technologies important and allow those patent applications to go to the front of the line, Bloch said.
“That’s a power that could be abused and it could be controversial in the reconciliation process,” he said. “If semiconductor technologies are promoted, the pharmaceutical industry or the automobile industry may ask why their technologies are not important to American competitiveness.”"
The text of the bill at issue, section 26, is provided below:
SEC. 26. PRIORITY EXAMINATION FOR TECHNOLOGIES IMPORTANT TO AMERICAN COMPETITIVENESS.
Section 2(b)(2) of title 35, United States Code, is amended–
(1) in subparagraph (E), by striking ‘and’ after the semicolon;
(2) in subparagraph (F), by inserting ‘and’ after the semicolon; and
(3) by adding at the end the following:
‘(G) may, subject to any conditions prescribed by the Director and at the request of the patent applicant, provide for prioritization of examination of applications for products, processes, or technologies that are important to the national economy or national competitiveness without recovering the aggregate extra cost of providing such prioritization, notwithstanding section 41 or any other provision of law;’.