The Puget Patent Blog

Access to Track One Program Improved

Posted Saturday, December 27, 2014.

Track One prioritized examination is a USPTO program about which I have written previously (read more about Track One here). In short, applicants for a U.S. utility patent may request prioritized examination in which the USPTO either issues the patent or a final rejection within one year. There is a patent office surcharge for prioritized examination which amounts to about three times the regular filing fee.

For example, as of today a small entity would normally pay $730 in filing fees for a utility application with 20 total claims, of which three are independent claims. Without paying the Track One program fee, the usual timetable to issuance is about three years. By paying the USPTO an additional $2070, the application may be examined under Track One and a patent could issue in a year, provided the application meets certain other requirements. (For micro entities the amounts would be $400 and $1035.)

Those other requirements include that the application must have no more than thirty total claims (of which four may be independent). The application also must not have any multiple dependent claims. Additionally, upon filing the application, it must be accompanied by the inventor’s declaration, a certification and request form for entry into the Track One program, and the program fees.

After filing, the Track One application is reviewed by the USPTO to confirm that the application meets the program requirements (fewer than 30 claims, etc.). Until this year, if the application did not meet the program requirements, the request for Track One handling was denied. The applicant would receive most of the program fee back, but the application would be examined on the regular three year timeline. The only way to get the application back on Track One was to file it again after having changed it to comply with the program requirements (for example, removing enough claims to get it to 30 claims or fewer). This resulted in delay and expense associated with preparing and filing a second application.

Earlier this year, the USPTO reevaluated whether it was necessary to immediately dismiss applications from Track One for not meeting all the requirements upon filing. They concluded that a one-month grace period was reasonable in instances where certain program requirements were not met, including the incorrect number of claims or the lack of the inventor’s declaration, among others.

Now, if an applicant files a utility application with a Track One request, but one of the program requirements is not met, rather than denying entry into Track One and refunding the program fee, the USPTO will notify the applicant and permit a one-month grace period for remedying the issue. For example, if an applicant inadvertently files an application with 50 claims, the USPTO will notify the applicant and give the applicant one month to file a response which cancels enough claims to get the number of claims down to 30 or fewer.

This is a positive development which will improve access to prioritized examination. I am a fan of Track One and I encourage all of my clients to consider whether attaining the exclusive right to their inventions two years sooner is worth the program fee. $2070 may seem like a hefty surcharge. In an environment where there is a rush to copy successful products, however, the benefit of having an extra two years of the exclusive right to make and sell an invention may significantly exceed the surcharge. And Track One is now easier than ever to enter.

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International PCT Patent Filing Fees Reduced

Posted Wednesday, December 3, 2014.

The Patent Cooperation Treaty (PCT) includes procedures used by inventors who wish to seek patents in more than one country. The first step is the filing of an “international application,” which resembles a patent application one would file in the United States Patent and Trademark Office (USPTO).

The international application is filed in “Receiving Offices” designated by the World Intellectual Property Organization (WIPO) to receive such applications (the USPTO is a Receiving Office), PCT application fees are paid, and the application is forwarded to WIPO offices in Geneva, Switzerland. The inventor or applicant later files the application in patent offices around the world, where the application receives consideration from a patent examiner.

Filing fees for an international application under the Patent Cooperation Treaty are more expensive than USPTO filing fees. For small firms or solo inventors, the fee discrepancy is in part because WIPO does not offer “small entity” or “micro entity” discounts (50% and 75% respectively off most filing fees) as the USPTO does. Even for the largest firms paying the USPTO the full rate for filing an application, PCT filing fees are still at least twice as expensive.

That aside, the USPTO also allows more pages and claims in an application than are permitted in a PCT application. An average-sized filed in the USPTO will be associated with surcharges for excess pages and claims if that application is filed as a PCT application instead.

So, as I have written here previously, the USPTO is a relative bargain compared to the cost of transacting patent business internationally. The good news today, though, is that most PCT fees are being reduced, effective January 1, 2015. The new fees are approximately 6% lower. The change is likely due to recent fluctuations in currency exchange rates.

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Are Business Methods Patent Eligible After SCOTUS Alice v. CLS Decision?

Posted Sunday, November 30, 2014.

This past June, the Supreme Court delivered an opinion in Alice Corp. v. CLS Bank International. The decision invalidated an Alice Corp. patent by ruling that the subject matter of the patent claims was not patent-eligible. The patent claimed a method for mitigating “settlement risk” in financial obligations. Patent claims to a computer system configured to perform the method were also present in the patent in question, as were claims for a computer-readable medium with program code for carrying out the method.

These types of claims represent three different ways that patent attorneys write claims for inventions implemented in software. Other strategies for drafting such patent claims exist, but the Court specifically wrote about claims to methods, and the computers and media associated with the methods.

Patent eligibility in the United States is codified in Title 35 of the United States Code, section 101, which reads “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” One way to obtain a patent on software is to disclose in the patent claim the algorithm driving the software. As all programmers know, an algorithm is a series of steps, or in other words, a process (one of “process, machine, manufacture, or composition of matter”).

In Alice, the Supreme Court applied the logic from its previous decision in Mayo v. Prometheus, relating to medical testing, to the claims at hand. In Mayo the court utilized a new two-step test to assess eligibility of patent claims, and under the Mayo two-step test, the claims in Alice were also invalidated.

A short concurring opinion, written by Justice Sotomayor, related to business method patents. The claims in Alice could be characterized as carrying out a method of doing business, particularly, the method of mitigating settlement risk by parties to a financial transaction. There are those who argue that the Court’s recent patent jurisprudence tells us that business methods (which can be implemented in software) are not patent-eligible subject matter.

However, in the concurring opinion, Justice Sotomayor wrote “I adhere to the view that any ‘claim that merely describes a method of doing business does not qualify as a “process” under §101’” and cited the Court’s 2010 Bilski v. Kappos decision. She was joined by Justices Breyer and Ginsburg. Notably, however, the other six justices of the Court did not join this opinion. The fact that a majority of justices on the Court declined to explicitly opine that business method patents were ineligible when given the opportunity tells us that business methods are patent eligible.

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Restriction Requirements

Posted Saturday, October 25, 2014.

The patent application fees paid by applicants to the United States Patent and Trademark Office (USPTO) are among the best bargains around. USPTO rates are low in light of the fact that on average, a U.S. patent application receives 19 hours of attention from a patent examiner. For example, a small entity filing a utility patent application today at the USPTO would generally pay $800. The patent office receives, on average, $42/hr to assign the application to an examiner having education and subject matter expertise in the technology to which the application is related. (That figure does not account for patent office overhead at all, so the actual average rate is obviously lower.) It doesn’t matter whether the application is 9 pages long or 99 – in most cases the examiner is going to be allocated the same amount of time to work on it irrespective of its size.

Naturally, applications vary in size according to the complexity of the subject matter disclosed and claimed. Note that I did not write “according to the complexity of the invention.” Often, a product for which an applicant seeks intellectual property protection actually embodies multiple inventions. And in such a case, the applicant must file separate patent applications for each invention.

Consider a new jet airliner jam-packed with innovations and new features devised during a 5-10 year development cycle. The manufacturer isn’t going to submit a single patent application titled “Dreamliner” – instead, a separate patent for each of those innovations and new features will be sought via individual patent applications. Each newly-invented feature of the airplane would represent a single invention and require a separate application if IP protection of the feature is desired.

What happens if there is some overlap, and a single patent application actually discloses two inventions? We know from the above that the patent office isn’t receiving a lot of money for each invention examined. They don’t normally have the ability to squeeze examination of two inventions into the number of hours needed to examine one. (In fact, by regulation they can’t – see 37 CFR 1.141.) So, if the examiner, upon initially reviewing the application, detects patent claims directed to multiple inventions, a “restriction requirement” will be issued.

In a restriction requirement, the examiner lists the different inventions and instructs the applicant to choose only one for examination. The applicant makes an election, and the examiner continues the examination by considering only the claims directed to the elected invention.

To get the second invention examined, the applicant may have a second application prepared and filed, and pay a second set of application fees. The second application is a type of continuation application called a divisional application. The divisional application may or may not be assigned to the original examiner. If, for example, the non-elected invention relates to a different technology area than the elected invention, the divisional application would almost certainly be examined by a different examiner.

The principle is easy to understand – when you pay one application fee, you get one invention examined. If your application actually discloses and claims two or more separate inventions, then two or more patent applications are needed. The tricky part is determining how to distinguish two or more separate inventions. The rules written in the manual which patent examiners use to make this determination are 10 or 11 pages long.

It is possible to contest a restriction requirement if you don’t agree with how the patent examiner is arriving at the conclusion that the inventions are distinguishable. The patent office is required to allege in the restriction requirement that the examiner would bear a “serious burden” if restriction isn’t required. I had an instance once where a patent examiner issued a restriction requirement, insisting that two different claims each represented a different invention, and that a serious burden would result if the examiner had to examine both of the claims. In reviewing the actual claims, which had been written by someone else, I discovered that the difference in the two claims amounted to a single word. Sure, the words were in different order in the two claims, but each claim included the same list of words except that one of the two had an extra word, which was “existing.”

In my reply to the restriction requirement, I contested the notion that the addition of the word “existing” in the second claim would constitute a serious burden. The examiner agreed, withdrew the restriction requirement, and examined both of the claims.

Inventors bringing a new product to market should be aware that the new product might actually include multiple inventions. They should be prepared for the potential need to file multiple patent applications to fully protect the invention. (Steve Jobs once said that the iPhone, for example, has over 200 patents covering various aspects of the single device.) Where multiple inventions are claimed in a single application, the USPTO will likely issue a restriction requirement to keep the workload of the examiner assigned to the application to a reasonable level in light of the USPTO’s relatively low filing fees.

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Track One Prioritized Examination for Utility Patents

Posted Thursday, September 18, 2014.

The United States Patent and Trademark Office (the “USPTO” or “patent office”) was reporting a “total pendency” for applications for patents of 27.5 months as of August, 2014. In other words, from the time that a patent application is filed to the time that a patent is issued, an applicant can expect to wait two years and four months.

In recent years, applicants have had to wait three to four years following filing of the application for a patent to be issued. The patent office is obviously making good progress on reducing its backlog of unexamined applications resulting in a corresponding reduction in total pendency. Still, many applicants may not be able to wait for two to three years before a patent actually issues. For example, there could be a competitive situation brewing, in which actually having the patent will lead to an advantage over a competitor by virtue of being able to bar such a competitor from making or selling copies of the applicant’s product.

A variety of programs exist at the patent office for “accelerating” examination of a patent application. Under such accelerated programs, the patent application is usually put at the front of the line. Once it is assigned to a particular examiner, the accelerated application is ordinarily the first application which the examiner will handle after finishing whatever application the examiner is currently processing.

One such program is called Track One prioritized examination. In short, by paying a surcharge to the patent office above and beyond the regular filing fees, the application can be designated for accelerated examination such that the applicant can expect either a patent or a final rejection no later than 12 months after filing.

Some other requirements for entry of the Track One program are that the application may have no more than four independent claims and 30 total claims. In addition, the patent office will examine no more than 10,000 Track One applications each fiscal year. So far, the limit has not been reached – the largest number of Track One applications filed in a single fiscal year to date was 6,872 in FY2013.

While the goal is to have either a patent or final rejection no later than 12 months after filing, in actuality the patent office is doing much better than that. As of August of 2014, Track One cases were completed in an average of 6.3 months. That is consistent with my own experience with the Track One program. The most recent Track One application I filed on behalf of a client issued as a patent in 6 months and 7 days.

The surcharge for Track One is about three times the total amount of the other application fees. The Track One fee is discountable for small entities and micro entities, as most USPTO fees are. For example, a USPTO small entity filing fee (assuming 20 claims) would be $730 and the USPTO Track One surcharge would be $2070. (Those figures are as of today and are subject to change.) Micro entity clients could expect those fees to be about half that much.

To be able to start the patent monopoly nearly two years sooner for only a couple thousand dollars could lead to a significant competitive advantage. Also, remember that the patent term begins 20 years from filing, generally irrespective of how long the application is pending. In other words, if it takes three years for the application to be prosecuted, the effective term of the patent will be 17 years. With a Track One application, should the application issue as a patent six months after filing, the effective patent term becomes 19.5 years.

One very important thing to remember is that Track One status must be requested at the time the application is filed. The patent office will not grant a request to confer Track One status on an application after it has been filed (unless it is in the context of an RCE). If the application is filed and then the following week it comes to light that Track One examination would be best, the only option is to file a second application, file a Track One request concurrent with that second application, and pay all the patent office fees including a second set of filing, search, and examination fees.

In my view, for applicants who are bringing their product to market and are concerned about their competitive position, Track One is a bargain and should always be considered.

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