Posts Tagged ‘AIA’

Congress diverts patent fees despite AIA promise not to divert.

30 Jul

Hate to say “We told you so.” Congress is stealing the higher PTO fee revenues for other programs and the PTO is putting its “improvement” programs on hold due to the resultant lack of funding. Same old same old. Congressional lies and corruption.

In our opposition to the AIA we predicted Congress would see the USPTO as a revenue stream to be spent and would divert fees despite the promises of Senator Patrick “IBM” Leahy and former PTO Director David “IBM” Kappos to the contrary. You remember, IBM Kappos assuring the AIA was needed so the PTO could keep its revenues and would be properly funded and could cut down its backlog and that Section 22 of the AIA made sure that would occur. I predicted the PTO revenue fund would be raided and that the promises to the contrary were lies. Surprise, they lied and just as we predicted, the increased fees are being diverted. The PTO has announced that it will stop hiring, stop the branch offices and the backlog will not decrease, but that the higher fees will remain in place.

Unfortunately, our predictions have been proven accurate. Congress is using “Sequestration” to steal money from those paying increased patent fees who agreed to support increased fees in return for Congressional promises to use the money exclusively for the PTO.

No surprise really that Congress welches on a promise to patent applicants or that Congress steals $148,000,000 of PTO revenues for other programs, just sad that no one listened when we were saying the loophole that might allow that needed to be closed so Congress could not welch on its “promise.” After all, this is the best Congress money can buy. And, if there is not enough money to buy them, they steal some.

Here is what I said back in Sept. 2011 about Sec. 22 of the AIA:

“Sec. 22. Patent and Trademark Office funding.  Establishes the USPTO Public Enterprise Fund (replaces the Appropriation Account) as a revolving fund available to the Director without fiscal year limitation. Requires all fees paid to the Director and all appropriations for defraying the costs of USPTO activities to be credited to the Fund. Requires fees charged or established by the Director to be collected by the Director and available to carry out USPTO activities until expended. Directs fees from specified sources to be deposited in the Fund, recorded as offsetting receipts, and available to cover appropriate expenses. [This is the fund that would be set up as a means to capture all PTO revenue and expenses and make a ready fund available for easy diversion by congressional money grabbers eager to fund earmarks in totally unrelated areas by making inventors pay for them. This is an idiotic provision that will obviously run up patent fees and hurt American inventors of all sizes. So, we have to give another point to the idiots. This actually hurts everone, so Bigs & Foreigners +38, Small Guys-22, Idiots -16] Requires the Director to submit an annual report to Congress including: (1) the USPTO’s operating plan, expenses, and staff levels; (2) long term modernization plans and related progress updates; and (3) the results of an annual independent audit of the USPTO’s financial statements required by this section. Requires the Director to annually: (1) notify Congress of its spending plan, and (2) submit to the President a business-type budget as prescribed by regulation for the federal budget. [This annual report is obviously designed to make the PTO budget subject to annual appropriation so that PTO fees can be diverted to earmarks. That hurts everyone. Bigs & Foreigners+37, Small Guys-23, Idiots-17]”

See my full review of the AIA at the time it was passed, here:

This is one time when it hurts to be proven right. It is times like this when we see that the AIA really was what we called it from the start, the “ANTI-Inventor Act” rather than the “America Invents Act.”


Obama makes anti-patent troll remarks

21 Feb

President Obama seems to be catering to big business again, duped into attacking patent aggregators as impediments to progress. There is an underappreciated flip side, and that is that the patent reforms so far enacted at the behest of Obama’s team actually aggravate the problem by making patent enforcement even more expensive so that such aggregators are effectively the only option for many small businesses seeking to obtain redress for blatant infringement by big business. The software industry certainly has a legitimate beef due to the rapid pace of new inventions and the inability of the USPTO to keep pace, which leads to long pendencies and issuance of highly questionable patents that often serve more to slow down progress and reward marginal advances. We have for more than two decades here been advocating that the US move to a patent registration system with an opposition period and with PTO adjudication of validity and infringement issues so that this situation can be eliminated, patents issue rapidly, oppositions come quickly and disputes are decided quickly and more reliably by the most qualified experts (patent examiners). Once the validity and infringement issues are resolved, the remainder of the patent infringement issues generally follow and settlement comes quickly. If the patent is held invalid or not infringed, the accused infringer goes on about its business without further interruption or delay. If the patent is held valid and infringed, the accused infringer either stops or negotiates a license to or purchase of the patent on the one hand or sets about to design around the patent to create a non-infringing alternative. Such design around activities unquestionably promote the progress of the useful arts, as those designing around patents naturally want to create something not just different, but something better so that they can turn the tables, advertize advantages of their new design, and get the patent on that new workaround that stops the patentee from making, using or selling the improved workaround.

We encourage further patent reform, but reform that builds on the reforms by recognizing the need for speed in patent issuance and the need for speed in patent conflict resolution so that certainty can be brought more quickly in order to allow businesses and individuals to invest with more confidence in American ingenuity and to devote resources currently spent litigating patents on R&D instead. I like us patent lawyers getting rich, but I would prefer inventors getting rich instead.


PTO Issues Expansive Ruling on Post Grant Review

26 Sep

The PTO has chosen the Director’s Forum, a moderated PR blog by David “IBM” Kappos to state that in PGR (post grant review) the PTAB (Patent Trial and Appeal Board) will review subject matter patentability, a court-defined (See the Bilski and Prometheus cases) prerequisite for issuance of a valid patent as a “condition for patentability” along with other statutorily defined conditions (see 35 USC 102, 103, 112). Presumably that will only occur when the petitioner for PGR raises the issue. The legal justification given by Kappos was somewhat shaky, although we expect correct, grounds. See . This was expressly issued to quell the commentators on Patently-O (see that suggested the PTO had no authority to review subject matter patentability in PGR under the AIA (America Invents Act, or as we more fittingly call it, the “Anti Inventor Act of 2011”).

We agree with IBM Kappos on this one, as it seems clear to us that the Supreme Court has in analyzing subject matter patentability under 35 USC 101 judicially added another condition of patentability, in effect another paragraph to 35 USC 102, that reads “h) or, the invention is an abstract idea, a law of nature, a mathematical formula, an intangible business method devoid of structure, or some other subject matter that has been determined by the Supreme Court to not be proper subject matter for a patent.”


More patent fee increases on the way. Still no Micro-Entity fees. How is that fair or smart?

23 May

“I am sometimes asked why we need the additional fee increase, given the 15 percent surcharge already in place and plans to implement a revised fee schedule by the first quarter of next year.

The answer is: leveling, cash flow, continuity — much like with any large enterprise. Think of the CPI adjustment as ensuring “bridge funds.” This planned CPI adjustment will provide a small but needed increase in funding, allowing the USPTO to continue reducing the backlog and pendency until our new fee schedule–which will provide long-term financial resources–is in place.”
-David Kappos, Director, US Patent and Trademark Office, May 14, 2012

Where are the micro-entity fee reductions that were mandated by the AIA 9 months ago? Answer: Delayed indefinitely by David “IBM” Kappos. Instead of the mandated 50% reductions,  15% increases for micro-entities went into effect as first order of business immediately on passage of the AIA (Anti Inventor Act of 2011). Likewise, the Fast Track For Fat Cats system of examination (where “money talks” when it comes to examination priority) went into effect right away in response to Big Business lobbyists (IBM?) Now Kappos is back asking for even higher fees for small and micro entities based on CPI. Meanwhile the mandated reductions for micro-entities are on hold for “consideration”. This translates into “Screw the little guy, we are working for IBM.” That means IBM and other Fat Cats get special treatment and “leveling” of their fees with those of small entities so they can send more jobs overseas and together with big foreign companies can further stifle American ingenuity and small American business. How is that smart for America, where most new jobs are created by small businesses, not IBM, which is busy shipping jobs overseas.

When will this madness end? Apparently not while IBM is running the Patent Office.


When an Invention is Not – Mayo v Prometheus – a Supreme error

15 Apr

A unanimous Supreme Court invalidated a patent on a diagnostic method for helping doctors safely administer thiopurine (TP) drugs that are used to treat autoimmune diseases such as Crohn’s disease and ulcerative colitis. Prometheus Laboratories (Prometheus) found that a certain compound 6TG could be administered with the TP drug and the level of 6TG in the blood measured with a specific level indicating more TP is needed and another specific level indicating less TP is needed. This was important to have enough TP to be effective but not so much as to be unsafe, as excessive dosage was potentially lethal, but had yet to be achieved because different people tolerated different amounts and different people required different doses to be effective. Prometheus solved that riddle with this invention. Specifically claim 1 of the patent  directed to a method of optimizing treatment of an immune-mediated gastrointestinal disorder had 2 steps, first administering a dose of certain medicine containing 6TG, second measuring the level of 6TG in the blood, and 2 wherein clauses, first that 230 pmol/ 800,000,000 red blood cells (“units”) indicated a need to increase TP dosage and second that 400 units indicated to decrease TP dosage. Prometheus licensed manufacture of a diagnostic kit based on the patent. That Prometheus invented this was not in doubt. Mayo Clinic wanted to use the patented method without paying Prometheus so began selling kits and challenged the patent on the basis that it was an unpatentable as claiming a law of nature. That Prometheus discovered this alleged “law of nature” was not in dispute. That they spent lots of money inventing it was not in doubt. That it was valuable was not in doubt. That it was a major advance in TP treatment methodology was not in dispute.  Yet, the trial court nevertheless agreed with Mayo that it impermissably claimed a law of nature and was invalid. However, on appeal the Federal Circuit (twice) held it patentable. The Supreme Court reversed, and went unanimously for Mayo, declaring the patent invalid as claiming a law of nature.


Was it correct or a travesty of justice?


The reviews have been mixed, with Patently-O, and biotech blogs publishing posts suggesting the Supreme Court blew it as the claim was really to a diagnostic method not a law of nature, and may invalidate all diagnostic method patents and medical treatments patents and will reduce the incentive to develop such treatments and thus slow the progress of medical science.
On the other hand, the anti-patent lobby is rejoicing, saying this is good because such patents lock up life-saving medical treatments and make medical care much more expensive and this will encourage development of new treatments utilizing the methods declared unpatentable.

It’s a hard case with both sides having good points. We join those concluding the Supreme Court blew it. The founding fathers already decided oppositely when they created the patent system, and the first patent was to a method that merely claimed a law of nature, that heating soda ash a second time would give a higher purity of potash. The founding fathers were Deists and individualists who believed in a natural rights theory of property, namely that property comes naturally as the fruit of labor and not from a King or Church, and that intellectual property rights are the rightful fruit of original creative intellectual labor and serve as a just reward for the effort of inventors. They also believed that exclusive manufacturing and sales rights belong rightly to the person(s) who invented the thing being made or sold, because when invented it was solely in the mind of that person unknown to the world and thus actually in the inventor’s exclusive control, i.e. his or her “intellectual property”. To encourage inventors to give their inventions, their “intellectual property” to the public, James Madison proposed that the Government grant patents to the first and true inventor rather than, as King George did, to some special friend or rich patron of the King/Government who really did not exert the effort to create the item being patented. Thomas Jefferson opposed the issuance of patents at all, contending that the system would be corrupted by Government and patents end up going to the big, wealthy and powerful and thus used by Government and the wealthy to oppress the people. The compromise was that patents would go to inventors after reasonable examination to assure that it was the true and first inventor that got the patent and no one else such as a friend of Government. This approach has served the US well for 222 years since 1790, but will be ditched next March pursuant to the Anti-Inventor Act of 2011 (officially misnamed the America Invents Act and commonly called “Patent Reform”) in favor a system where the first and true inventor does not get the patent but rather the first one to file at the US Pat. & TM Office claiming to be an inventor. The first and true inventor loses out unless he or she has proof of derivation by the one who filed, but such proof is in the possession of the one who derived and thus challenges will be ineffective and pointless.
That means the fat cats will get the patents and the real inventors will lose, which gets us close to what Jefferson predicted.

Mayo v Prometheus brings us yet another step closer to abandoning the patent system envisioned by the founders, as it prevents the patent reward going to the inventor and instead allowing big pharma to steal the invention without rewarding the inventor. When Prometheus came up with its discovery, it chose to file a patent disclosure giving the invention to the public in return for the limited period of exclusivity provided by the patent system. Prometheus viewed the incentive of the patent system as worth disclosing its invention rather than keeping it secret. Jefferson likely agreed with Madison on setting up a patent system because he agreed with Madison that otherwise inventors might go to their graves with their invention and the public thus be deprived of the invention, but that a patent system as we have it would not only reward the creative effort of the inventor to encourage them to invent but would also reward the inventor for disclosing his invention. Mayo v Prometheus tells the inventor of a diagnostic method to keep it secret to keep possession of it rather than lose it by disclosing it, and Mayo v Promethius does this by preventing the patenting of the method.

It is hoped that this erroneous and counterproductive interpretation of the patent system will be overruled by Congress in new legislation. It is also hoped, but not likely, that the best Congress money can buy will go back to first to invent so the vision of Madison and Jefferson can be kept alive for the benefit of America as the technical leader of the world. Unwittingly, the Supreme Court is killing our technical edge, as did Congress with the Anti-Inventor Act of 2011

The natural rights theory on which the patent system was founded is now under attack. Anti-patent activists claim patents retard rather than promote the progress of science. Small inventors correctly contend that patents are a great and necessary equalizer that do not depend on how big, rich or powerful you are, and which should reward their risk-taking so as to encourage them to risk inventing as they develop the majority of new products. In effect the patent system requires the inventor to give the invention to the public in return for an exclusive lease to the invention for about 17 years (20 from filing, less about 3 years of red tape at the US Pat & TM Off). This is so because at the end of that time the invention becomes public domain, free for everyone and anyone to use. That exclusive lease, that patent, can be very valuable to the inventor if the invention is very valuable. And, the invention thus given to the public can be very valuable forever, as those whose lives are saved by the lowered cholesterol from use of atorvastin calcium (Lipitor) which just came off patent this year can attest.

Here, the Supreme Court misses the point that the patent system is intended to encourage inventors to give their invention to the public and to reward their risk taking in making the research discoveries that leads to such discoveries as the safe way to administer this valuable medical treatment. Safe administration of TP had alluded researchers until this invention was made. Would Prometheus have invested the money to invent this if it knew Mayo could reap where it did not sow and take the invention for free? Arguably not. How many future diagnostic methods will now go to the grave with their inventor as a result of this? How many future diagnostic methods will be missed due to lack of incentive to invest in R&D to develop them? We will never know, but really it is our loss, and it is one that the founding fathers sought to prevent 222 years ago only to have the Supreme Court unanimously kill the goose that laid the golden eggs in diagnostic medical methods.


AIA – suggested practice for conflicting applications

28 Feb

Here is a key piece of practice advice for transitioning to FTI on 2013-03-16. How you handle your cases procedurally could make the difference between getting a patent and not getting a patent, or between infringing and not infringing.

If prior to effective date (2012-03-16) you are first to invent but second to file, you want to monitor for post 3-16 CIPs, as you would not want to abandon your app if there is one.

If prior to effective date, you were second to invent, but first to file, you want to file a CIP after 2013-03-16 and monitor for abandonment of the second to file application, as that would remove it an obstacle to patentability due to the prior inventor abandoning his right to that date of invention.

For a detailed explanation of this see the following article:


NY Times notes Problems with AIA (America Invents Act of 2011)

11 Feb

Here is a new article which highlights the problems of the Anti-Inventor Act of 2011, including First to File (so big business can get there first and steal inventions from small businesses while small businesses learn the patent system and figure out too late they needed to file fast, very fast), Fast Track For Fat Cats (so big business can jump priority over small inventors and get patents in a year or less while small inventors wait years for theirs) and Post Grant Review (so big business can drive up enforcement costs and steamroll small inventors and thereby more easily steal inventions)