In response to the U.S. Supreme Court’s decision in Bilski v. Kappos (see our post here), the USPTO issued a memorandum to provide interim guidance to the Patent Examining Corps (see our post here).  Some commentators (here) have criticized the new policy because the interim guidelines state if there is no “clear indication” that the invention is something other than an abstract idea, the examiners should reject the application. At this point, applicants have the burden to explain why the invention is not an abstract idea.  This approach to examination appears to be contrary to Oetiker, where the Federal Circuit held that “the examiner bears the initial burden, on review of the prior art or on any other ground, of presenting a prima facie case of unpatentability.”  In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992) (see MPEP 2106(IV)(D)).

Today, at the National Association of Patent Practitioners (NAPP) 2010 Annual Meeting in Alexandria, Virginia, Robert L. Stoll, Commissioner for Patents at the USPTO, told the audience that updated, more detailed interim guidance was in the review and approval process and that he hoped to have it available for use within the next few weeks.  He also emphasized that it was never the intent of the current interim guidance to shift the burden of proving patentability to the applicant and that examiners still have the burden of presenting a prima facie case of unpatentability.

Going forward, Stoll said that the USPTO would be soliciting public comments and closely monitoring court decisions in an attempt to create and maintain up-to-date examination guidance regarding patentable subject matter.

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Following the Supreme Court’s decision in Bilski v. Kappos (see our post here), the USPTO issued a memorandum to provide interim guidance to the Patent Examining Corps.  For now, the USPTO will continue to use the Federal Circuit’s machine-or-transformation test as the benchmark for patentability determinations under Section 101.

The pertinent part of the memo reads:

Examiners should continue to examine patent applications for compliance with section 101 using the existing guidance concerning the machine-or-transformation test as a tool for determining whether the claimed invention is a process under section 101. If a claimed method meets the machine-or-transformation test, the method is likely patent-eligible under section 101 unless there is a clear indication that the method is directed to an abstract idea. If a claimed method does not meet the machine-or- transformation test, the examiner should reject the claim under section 101 unless there is a clear indication that the method is not directed to an abstract idea. If a claim is rejected under section 101 on the basis that it is drawn to an abstract idea, the applicant then has the opportunity to explain why the claimed method is not drawn to an abstract idea.

The USPTO is reviewing the decision in Bilski and will be developing further guidance on patent subject matter eligibility under 35 U.S.C. § 10 1.

To read the Bilski memo to the Patent Examining Corps, click here.

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The U.S. Supreme Court, on June 28, 2010, decided the long-awaited Bilski case, affirming the Federal Circuit’s judgment.  The Court ruled that business methods are eligible subject matter but declined to accept the Federal Circuit’s machine-or-transformation test as the exclusive test for the Section 101 determination.  Most of the Court’s opinion is supported by 5 votes, and other parts are supported by only 4 votes.  All nine justices agreed that Bilski’s risk management method claims related to hedging against weather-related losses in the energy industry were too abstract, and thus not patentable subject matter.  Four justices, led by retiring Justice John Paul Stevens, said that methods of doing business should never be patentable.  They expressed “serious doubt” that business innovators need patents to succeed.

The Court held that the machine-or-transformation offers “a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible process.”

This decision is a win for financial institutions.  It is also a win for e-commerce and software companies, especially start-ups, who often rely heavily on business method and software patents to attract investors.

The following language is supported by a majority of the Court:

“Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act’s text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr.

“And nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past.  See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. It may be that the Court of Appeals thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents, including (but not limited to) application of our opinions in Benson, Flook, and Diehr. In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text.”

What’s next?  The Supreme Court left unanswered exactly what would be needed for a business method to be considered patentable subject matter. Also left open are the questions of patentable subject matter for software patents and medical diagnostic methods.  Thus, while business method patents are still alive – or have at least survived – the district courts and Federal Circuit will be using the next several years to develop “other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text.”

To read the full Bilski v. Kappos opinion, click here.

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The United States Patent and Trademark Office (USPTO) is increasing the availability of its patent electronic filing system, Electronic Filing System-Web (EFS-Web) by providing a new contingency option when the primary portal to EFS-Web has an unscheduled outage. Previously, the entire EFS-Web system is not available to the users during such an outage. The contingency option in EFS-Web will permit users to sign-on as unregistered EFS-Web users to file new applications, national stage submissions under the Patent Cooperation Treaty (PCT) submitted with the basic national fee necessary to enter the national stage, requests for reexamination, and certain petitions, during an unscheduled outage of the primary portal to EFS-Web.

Currently, approximately eighty-seven percent of new patent applications are being electronically filed via EFS-Web. Applicants experience many benefits from filing their applications and follow-on documents electronically. For example, applicants promptly receive an electronic acknowledgment receipt of their electronic submissions and have the ability to review their applications or documents via the Patent Application Information Retrieval (PAIR) system within an hour after the USPTO receives the electronic submissions. Furthermore, independent inventors and other small entity applicants who file their applications electronically via EFS-Web receive a discount on the basic filing fee. Previously, when the primary portal to EFS-Web is unavailable during an unscheduled outage, the entire EFS-Web system is unavailable to users. The new contingency option in EFS-Web will minimize any inconvenience to users who wish to file a new application during an unscheduled outage of the primary portal to EFS-Web.

Effective May 19, 2010, the USPTO will provide EFS-Web Contingency Option to users to file new applications, national stage submissions under 35 U.S.C. 371, requests for reexamination, and certain petitions when the primary portal to EFS-Web is unavailable during an unscheduled outage. The USPTO will post a notification of any unscheduled outage of the primary portal to EFS-Web and provide the link to EFS-Web Contingency Option on the EFS-Web Internet page here. The EFS-Web Contingency Option will have the same functionality as EFS-Web for unregistered e-filers. It will permit users to sign on as unregistered EFS-Web users to file new applications, national stage submissions under 35 U.S.C. 371 submitted with the basic national fee necessary to enter the national stage, requests for reexamination, and certain petitions. However, other follow-on documents and fee payments filed after the initial submission of the application or reexamination request (e.g., amendments and replies to Office actions) cannot be filed using EFS-Web Contingency Option.

Specifically, EFS-Web Contingency Option will only permit users to electronically file the following items as unregistered EFS-Web users:

1. Provisional patent applications under 35 U.S.C. 111(b);

2. Nonprovisional utility patent applications under 35 U.S.C. 111(a) (including reissue utility patent applications);

3. Nonprovisional design patent applications under 35 U.S.C. 171 (including reissue design patent applications);

4. International applications under PCT Article 11 for filing in the United States Receiving Office;

5. National stage submissions under 35 U.S.C. 371 submitted with the basic national fee necessary to enter the national stage;

6. Requests for ex parte reexamination under 35 U.S.C. 302 for utility or design patents;

7. Requests for inter partes reexamination under 35 U.S.C. 311 for utility or design patents;

8. Petitions to make special based on age under 37 CFR 1.102(c) when filed as an e-petition using the EFS-Web SB130 form, for the automatic processing of the e-petition;

9. Petitions to accept an unintentionally delayed payment of maintenance fee under 37 CFR 1.378(c) when filed as an e-petition using the EFS-Web SB66 form, for the automatic processing of the e-petition; and

10. Petition to make special under the accelerated examination program (must be filed with a nonprovisional utility patent application under 35 U.S.C. 111(a)).

Documents filed via EFS-Web Contingency Option as part of the submissions listed above must meet the same file format requirements established for EFS-Web, e.g., file size and PDF embedded-font requirements. Applicant will not be required to, and should not, resubmit the application or document when the primary portal to EFS-Web is once again available. Any resubmission of an application will result in filing a duplicate application and, if applicant pays the filing fees again when submitting the duplicate application, no refund will be provided. Registered e-filers who have uploaded documents to a Saved Submission package in EFS-Web will not be able to access those Saved Submission documents in EFS-Web Contingency Option. Applicants can submit on-line fee payments by selecting fees on the fee calculation screen and completing their payment at time of submission (i.e., chose the “Yes! I want to pay now” button rather than “No–I will pay later” button).

When the primary portal to EFS-Web is unavailable during an unscheduled outage, applicants may also file new applications, national stage submissions under 35 U.S.C. 371 submitted with the basic national fee necessary to enter the national stage, and reexamination requests, by hand-delivery to the USPTO, or Express Mail from the United States Postal Service (USPS) in accordance with 37 CFR 1.10, to establish the filing date or national stage entry date. New applications, national stage submissions under 35 U.S.C. 371 submitted with the basic national fee necessary to enter the national stage, and reexamination requests cannot be submitted by facsimile transmission, and certificate of mailing procedures under 37 CFR 1.8 do not apply to these items. The EFS-Web Contingency Option does not permit follow-on fee payments and follow-on documents other than those listed above. Applicants may file the documents or fee payments by: (1) Facsimile transmission, (2) first class mail with a certificate of mailing in accordance with 37 CFR 1.8, (3) hand-delivery to the USPTO, or (4) Express Mail from USPS in accordance with 37 CFR 1.10. Documents that are required to establish the filing date of an application (e.g., a missing drawing figure or page of the specification) cannot be submitted by facsimile transmission, and certificate of mailing procedures under 37 CFR 1.8 do not apply to these documents.

The Federal Register notice is here.

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The United States Patent and Trademark Office (USPTO) today announced it would eliminate the fee for the petition to participate in Patent Prosecution Highway (PPH) programs. The elimination of the PPH petition fee is expected to encourage greater PPH participation by patent applicants.

Since 2006, the USPTO has implemented Patent Prosecution Highway programs with a number of patent offices as part of work sharing arrangements to avoid duplication of work among patent offices, and for reducing its own pendency and backlog. Until now, the PPH notices have indicated that a request for participation in the PPH program required the payment of a $130 petition fee.

“Patent Prosecution Highway programs have great potential to reduce unnecessary duplication of work between offices, reduce pendency and improve quality,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “By eliminating the petition fee, we expect to see more applicants take advantage of PPH.”

PPH applications have proven to take significantly less time to prosecute, on average, than non-PPH applications. Using the PPH process also increases the sharing and re-use of information (primarily search and examination results) between the USPTO and its partner patent offices. Improving the PPH framework to make it more user-friendly, and thereby encouraging greater participation by applicants, would support the Office’s goal to optimize both the quality and timeliness of patents.

Since 2006, the USPTO has entered into PPH agreements with the patent offices of Australia, Canada, Denmark, Finland, Germany, Japan, Korea, Singapore, The United Kingdom and the European Patent Office (EPO).

Under the PPH program, if an application filed in an Office of First Filing (OFF) receives an indication that at least one claim is patentable, a corresponding application with corresponding claims filed in the USPTO as the Office of Second Filing (OSF) may be advanced out of turn for examination. To have the request for participation in the PPH accepted in the USPTO, an applicant must make available to the USPTO the relevant work of the OFF as well as any necessary translation.

Notices regarding the PPH programs are available on the USPTO Web site here.

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Click on the image below to see WIPO’s e-card celebrating World Intellectual Property Day – April 26, 2010.

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David Kappos, Director of the United States Patent and Trademark Office (USPTO) will host a roundtable for independent and small entity inventors on Monday, March 29 from 4:30 to 5:30 pm.  The event will be held in the Madison Auditorium on the agency’s campus in Alexandria, Virginia.  It will also be webcast live on www.uspto.gov.  Director Kappos will make opening remarks and then invite questions from the audience and those watching on the web.  The roundtable will address current issues of concern to the independent and small entity inventor community including patent reform legislation.

Directions for logging on to the webcast will be posted on the homepage of the agency’s website the day of the roundtable.  If you plan to attend in person please RSVP to independentinventor@uspto.gov.

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In a press release today, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO) David Kappos today announced President Obama’s $2.322 billion fiscal year 2011 (FY 2011) budget request for the USPTO.

The president’s budget request for FY 2011 will support a five-year plan designed to enable the USPTO to achieve the strategic objectives laid out by Under Secretary Kappos and Commerce Secretary Gary Locke – a significant reduction in patent pendency periods and the existing patent inventory backlog; improvement in patent quality; enhanced intellectual property (IP) protection and enforcement; global IP policy leadership; and investment in information technology (IT) infrastructure and tools to achieve a 21st Century system that permits end-to-end electronic processing in patents and trademark IT systems.

To achieve these performance commitments, the USPTO will:

- Achieve 3 percent annual efficiency gains in patents processing through the re-engineering of management and workflow processes.

- Initiate a targeted hiring surge and hire 1,000 patent examiners annually during FY 2011 and FY 2012. This effort will target former patent examiners and IP professionals who will require minimal training and can be productive virtually from the start of their employment.

Further details on the USPTO’s five-year strategic plan will be released in the second quarter of 2010 as they become available.

“The USPTO’s 2011 budget represents a significant investment in American innovation,” Secretary Locke said. “We must reduce the unacceptably long time it takes to patent a new idea or technology and improve our enforcement of intellectual property. Doing so will help create jobs and enhance the long-term competitiveness of the U.S. economy.”

The FY 2011 budget request projects fee collections of $2.098 billion. In addition, the administration is proposing an interim fee increase on certain patent fees which is estimated to generate $224 million. The administration continues to support granting the USPTO fee-setting authority as a significant part of a sustainable funding model that would allow the director to propose and set fees in a manner that better reflects the actual cost of USPTO services.

“The USPTO’s work in fostering innovation and bringing patented goods and services to market is a crucial driver of job creation and economic recovery,” said Under Secretary Kappos. “Intellectual property is America’s competitive advantage in the 21st Century global economy and will play a central role in our long-term economic growth. We will continue to take steps to make the USPTO more efficient, and drive to reduce the unacceptably long pendency periods that hinder the creation of new businesses and new jobs.”

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The United States Patent and Trademark Office (USPTO) announced on January 28, 2010 that it will provide patentees with the ability to request a recalculation of their patent term adjustment without a fee or petition as is normally required pending completion of necessary modifications to the USPTO’s computer program for calculating patent term adjustments.  The agency expects to complete by March 2, 2010 the software modification necessary to comply with the U.S. Court of Appeals for the Federal Circuit’s recent decision in Wyeth v. Kapppos regarding the overlapping delay provision of 35 USC 154(b)(2)(A).  For more details about the decision, see our post here.  Both the USPTO and the Department of Justice have decided not to seek further review of the Federal Circuit’s decision in Wyeth.

In the meantime, the USPTO will be processing recalculation requests under an interim procedure that is available to a patentee whose patent issues prior to March 2, 2010, and who requests it no later than 180 days after the issue date.  This procedure is available only for alleged errors in calculation that are specifically identified in Wyeth.   A copy of the notice submitted to the Federal Register for publication and the form for patentees to use in requesting a recalculation of patent term is on the USPTO Web site here.

“The USPTO is working to modify its computer program to comply with the Federal Circuit’s decision as soon as possible,” said Commissioner for Patents Robert Stoll.  “Until then, this interim procedure will enable patentees to request a recalculation quickly and at no charge.”

An applicant is entitled, subject to certain conditions and limitations, to patent term adjustment if (1) the USPTO fails to take certain actions during the examination and issue process within specified time frames; (2) if the USPTO fails to issue a patent within three years of the actual filing date of the application; and (3) for delays due to interference, secrecy order, or successful appellate review.

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In a notice dated January 26, 2010, the United States Patent and Trademark Office (USPTO) provided guidance for patent applicants who use claims directed to computer readable media  (also called machine readable media and similar variations).  A problem has developed in the way the USPTO and the courts have interpreted such claims, i.e., they may include non-statutory, transitory propagating signals.

According to the USPTO, the broadest reasonable interpretation of a claim drawn to a computer readable medium typically covers forms of non-transitory tangible media and transitory propagating signals per se in view of the ordinary and customary meaning of computer readable media, particularly when the specification is silent.  See MPEP 2111.01.  When the broadest reasonable interpretation of a claim covers a signal per se, the claim must be rejected under 35 U.S.C. 101 as covering non-statutory subject matter.  See In re Nuijten, 500 F.3d 1346, 1356-57 (Fed. Cir. 2007) (transitory embodiments are not directed to statutory subject matter) and Interim Examination Instructions for Evaluating Subject Matter Eligibility Under 35 U.S.C. 101, Aug. 24, 2009; p. 2.

The notice states that the USPTO recognizes that applicants may have claims directed to computer readable media that cover signals per se, which the USPTO must reject under 35 U.S.C. 101 as covering both non-statutory subject matter and statutory subject matter.  In an effort to assist the patent community in overcoming a rejection or potential rejection under 35 U.S.C. 101 in this situation, the USPTO suggests the following approach:  A claim drawn to such a computer readable medium that covers both transitory and non-transitory embodiments may be amended to narrow the claim to cover only statutory embodiments to avoid a rejection under 35 U.S.C. 101 by adding the limitation “non-transitory” to the claim.  Cf. Animals - Patentability, Off. Gaz. Pat. Office 24 (April 21, 1987) (suggesting that applicants add the limitation “non-human” to a claim covering a multi-cellular organism to avoid a rejection under 35 U.S.C. 101).

According to the notice, such an amendment would typically not raise the issue of new matter, even when the specification is silent, because the broadest reasonable interpretation relies on the ordinary and customary meaning that includes signals per se.  The limited situations in which such an amendment could raise issues of new matter occur, for example, when the specification does not support a non-transitory embodiment because a signal per se is the only viable embodiment such that the amended claim is impermissibly broadened beyond the supporting disclosure.  See, e.g., Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473 (Fed. Cir. 1998).

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