USPTO Satellite Offices

Wednesday, 12 September, 2012 06:00 Written by Dan Pierron 0 Comments

Dan Pierron

In the ever-changing world of the USPTO to comply with changes in the AIA, satellite offices are being established remote from the Alexandria headquarters. A first branch was opened July 13 in Detroit, with others to follow in Denver, Dallas, and Silicon Valley. The stated purposes are included in the enacting law, and are worth going through with a critical eye.

The first purpose is to “increase outreach activities to better connect patent filers and innovators with the Office.” The way this seems most likely to happen is with an increase in interviews, more specifically video interviews, as is indicated will be possible in the Detroit office, and hopefully will also be the case for each of the other satellite offices. Aside from that, unless the Patent Office opens up the satellite offices to in-person interviews, I cannot see how outreach will increase by that much. Mixers with examiners probably wouldn’t be social events of the season. Levity aside, reaching out to individual inventors through outreach programs at the satellite offices could be a real boon to garage-inventor types, encouraging them to start pursuing patent protection for inventions where they otherwise might not be aware or be somewhat disillusioned or discouraged from doing so.

Satellite Office – the new recruiting pools for local law firms?

The second stated purpose is to “enhance patent examiner retention.” This might be the most worthwhile of the goals of the satellite offices. Unfortunately, it might also be the most difficult to achieve. Ostensibly, it seems like the thinking is if an examiner lives near a satellite office, their satisfaction with the job will increase, hence increasing retention. However, I can easily imagine the scenario where now, an examiner can put in his time as an examiner in the technology hub of his choice, selected from any of the satellite office locations, all the meanwhile starting his search for his next position as a patent agent or attorney, depending on his education background. Time will tell which scenario plays out.

The third stated purpose is to “improve recruitment of patent examiners.” I’m not too sure how this one will play out. Will representatives from the patent office tour nearby engineering and life sciences programs at local universities, trolling for recruits? Perhaps it will be the aforementioned mixers that generates interest in employment at the satellite offices.

The fourth stated purpose is to “decrease the number of patent applications waiting for examination.” There are of course two obvious ways to reduce the backlog of applications: increase the examining core, and reduce the average pendency for applications. In announcing the opening of the Detroit office, the USPTO said 120 highly-skilled positions would be created. I don’t know how many examiners will be included in that number, but there is a good chance a significant portion of those positions will be examiners.

The fifth and final purpose is to “improve the quality of patent examination.” This seems to be a derivative benefit of the enhancing retention and improving recruitment of examiners. If in fact examiners are successfully recruited and retained as a result of the satellite offices, it stands to reason the quality of examination would go up. We’ve seen a mix of problems and solutions to attacking the backlog dilemma, with varying degree of success. However, there seems to be agreement that the satellite offices will be a net benefit to the system, with many of the questions discussed above remaining open. One thing is certain; with the increasing rate of applications being submitted, bold action must be taken to tackle the backlog of applications, before it becomes as unwieldy as some other government figures.

New First To File Patent System Explained

Friday, 07 September, 2012 10:24 Written by Mark Malek 0 Comments

By: Mark R. Malek

Someone brought to my attention a very well put together video on some of the nuances of the America Invents Act. Essentially, the video discusses the first to file requirement and shows us that it is now truly a race to the patent office. We can pick the video apart all day long, but take it for the joke that it is, and not as an indication that anything and everything under the sun is actually patentable. By the way, I especially like the cameo appearance by USPTO Director David Kappos. I thought he did a great job in his acting debut.

USPTO Patent Grants Hit Another Record for a Third Straight Year

Wednesday, 05 September, 2012 09:05 Written by Mark Malek 0 Comments

By: Mark R. Malek

In my morning slew of emails that I receive regarding intellectual property updates, I noticed that Dennis Crouch, author of Patently-O posted an article that he projects that the USPTO will issue more than 250,000 patents in 2012. My initial reaction was “Holy Crap,” but that made me immediately go check the backlog.

You may recall that the USPTO has provided the patent dashboard to the public which gives us a great view of the status of the patent backlog. According to the patent dashboard, we are now down to a patent application backlog of 627,367 patent applications. That is down significantly from the 900,000+ patent applications that I remember being pending with Director Kappos took over. Say what you will about the management of the patent office, but I look at the patent backlog as having been the single biggest issue with the USPTO and, somehow, Director Kappos and his team have found a way to put a significant dent in it.

Undoubtedly, there have been a number of changes over the past few years under his leadership. For the most part, I believe they have been good ones. The questions remains, however, as to whether or not the Patent Office is equipped to handle the many changes coming down the pike with the America Invents Act. A great article about one of the biggest issues facing the USPTO, i.e., the underfunding of the USPTO, can be found here. Although the America Invents Act moves funding of the USPTO a step in the right direction, it is not all the way there yet.

And the Verdict Is In – Apple v. Samsung

Wednesday, 29 August, 2012 08:00 Written by Dan Pierron 0 Comments

With a mighty crescendo, the jury has returned a verdict in the Apple v. Samsung suit. And the verdict is… guilty! Well, at least lots and lots of infringement, and even more damages. At first, it was $1,051,855,000 in damages. However, that later became $1,049,343,540. But hey, what’s $2.5 million between, well, enemies? However, this difference in damages might belie a more troubling and uncomfortable possibility about this verdict, that it was based on something other than the law.

An excellent summary of the goings-on after the verdict is available at Groklaw. To start, there is the small matter of the $2.5 million. It turns out that the jury made a slight mistake in awarding Apple damages for some Samsung device that the jury decided did not infringe Apple’s patents. It appears the connection between infringement and the awarding of damages wasn’t fully formed in the minds of the jurors.

This is where the sausage is made

As unsettling as that is, it’s merely the first in a chain of apparent missteps by the jury. As reported by Groklaw, the jury foreman stated “the jurors had reached a decision without needing the [jury] instructions.” Given the complexities of patent law, it is unfathomable that a lay jury can arrive at a logical, legally maintainable decision without reading the damn instructions. On top of this, there’s the fact that the jury returned their verdict in three days. Three days to carefully analyze each allegedly infringement of each device against each claim. Given the amounts in controversy, in addition to simply performing their sworn duties, three days seems grossly inadequate for every count to be given its due consideration.

Comments from another juror seems to support the contention that the jury failed in its task. A CNET interview with juror Manuel Ilagan quotes Ilagan as saying “After we debated that first patent — what was prior art –because we had a hard time believing there was no prior art. In fact we skipped that one, so we could go on faster. It was bogging us down.” When jurors skip analyzing prior art to determine the validity of a claim, they unequivocally shirk their responsibilities. The audacity to simply omit this analysis because it is difficult to perform makes me irate and does little to bolster the concept of jurors as suitable triers of fact in difficult patent cases.

In my last post I discussed a variety of theories that are commonly used in calculating damages. I have to apologize, for I omitted a crucial one, where the jury makes it up. If not making it up, the jury in this case certainly used something other than actual economic damages suffered by Apple in awarding damages. Again quoting the jury foreman, “we wanted to make sure the message we sent was not just a slap on the wrist. We wanted to make sure it was sufficiently high to be painful, but not unreasonable.” Never mind that damages awarded by the jury are not punitive, but compensatory. Of course, had the jurors bothered to read the instructions, this is something they likely would have been informed of.

A growing chorus of experts and journalists anticipate some degree of reversal of this verdict, and I am in agreement. The multitude of errors committed by this jury, and the serious consequences, monetary and otherwise, are too severe to go ignored an unaddressed. Let’s hope the courts can sort out this mess.

Patent Damages – Fudging the Numbers?

Wednesday, 22 August, 2012 08:00 Written by Dan Pierron 1 Comment

It comes as a surprise to nobody that adversaries in litigation disagree over nearly everything they can come up with contrary positions for. Along with infringement and invalidity, the determination of damages is one of the most crucial determinations made in the course of a patent infringement suit. As such, when it is time for damages to be addressed, much time and effort is expended by both parties in conjuring up a monetary figure that represents the damage done to the patent holder in the case. The methods used by each party can result in drastically different figures being reached by each of the parties. The two main methods of calculating damages are lost profits and reasonable royalties.

THAT’S where the lost profits went!

Lost profits are a very patentee-friendly damage calculation that attempts to determine how many sales were diverted from the patentee by the infringement, and how much profit was “lost” as a result of the diversion. Practitioners use the Panduit factors to inform their calculation, which include: 1. the demand for the patented product; 2. the absence of accepted non-infringing substitutes, meaning there is nothing on the market or that could be on the market that would essentially similarly divert the sales from the patented product without infringing the patent; 3. the manufacturing and marketing capability of the patentee to exploit their patent; and 4. the amount of profit made from each diverted sale, essentially revenue minus cost.

In contrast, the reasonable royalty school of thought uses a hypothetical negotiation between the patentee and the infringer, wherein the court does its own conjuring in determining what royalty the infringer would have paid the patentee before any infringing activity. Among the presumptions made by this method are that the negotiation takes place as the infringing activity begins, that both parties are willing to come to an agreement, and that the activity will indeed infringe the patent. This method results in substantially lower damages, and hence is favored by infringers, whereas lost profits is favored by patent holders. One interesting and sensible concept should be kept in mind when using the reasonable royalty method, which is that the infringer can, and indeed likely should, make a profit. Even a court is unlikely to engage in a thought experiment where a purveyor of goods would enter into a deal where they would not profit.

Recently, Bernard Chao posted an article at patentlyo.com that discussed the Dr. Evil-like award of

One BILLION dollars! MUHAHAHAHA!

damages in the Monsanto v. DuPont patent infringement case where DuPont was determined to have practiced the RoundUp Ready soy bean patent without a license. No fireworks there. However, DuPont never sold any soy beans produced by such infringing activity. Nonetheless, the jury arrived at damages of one billion dollars. As Dr. Chao’s article points out, because the relevant court documents are under seal, nobody outside that courtroom has the foggiest idea as to what damages theory led to such an award. Unsurprisingly, DuPont is appealing this decision, and time will tell what the ultimate damages will be. However, it is clear that as long as money in sums of this magnitude are at stake (or, perhaps more precisely, can be put at stake), damage theories are a critical element in end-phase patent litigation.

Category: Patent

USPTO Satellite Offices

New First To File Patent System Explained

USPTO Patent Grants Hit Another Record for a Third Straight Year

And the Verdict Is In – Apple v. Samsung

Patent Damages – Fudging the Numbers?

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