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IP Bulletin, March 2010

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March 2010 | Legal Update

How to Correct Patent Term Adjustment Following the Wyeth Decision
In its January 2010 decision in Wyeth v. Kappos, the Federal Circuit found that the United States Patent and Trademark Office (USPTO) had been miscalculating Patent Term Adjustment (PTA) for many applications, especially those that were pending for more than three years. In response to this decision, the USPTO announced an interim procedure for requesting PTA recalculation and initiated an overhaul of the computer system used to calculate PTA. As of March 2, 2010, PTA calculations should be calculated properly by the USPTO computer systems. Nevertheless, patent owners should continue to monitor their patents to confirm the accuracy of PTA calculations. Further, patent owners should particularly review patents that issued between September 2, 2009, and March 1, 2010, i.e., the time period during which PTA calculations were likely not calculated correctly, to ensure their patent rights extend for the full length to which they are entitled. For patents issued during this time period, applicants have 180 days to petition to have the PTA corrected. Unfortunately, there is no straightforward way to request PTA recalculation for patents in which more than 180 days have elapsed since the issue date. Applicants should also understand measures they can take to correct any miscalculated PTA for patents that issue on or after March 2, 2010.

For more information, including procedures to follow to petition for PTA adjustment, click here.

Preventing the Loss of Patent Term Adjustment When Filing Information Disclosure Statements
In the wake of Wyeth v. Kappos, many owners of recently-issued patents are taking actions to correct the Patent Term Adjustment (PTA) of their patents in order to extend the lengths of the terms of the patents. The spotlight now shining on PTA provides an opportune time to consider simple ways practitioners can limit any loss of PTA. For instance, many practitioners are unaware that the filing of an information disclosure statement (IDS) can result in up to a four month loss of PTA. PTA loss can occur when the IDS results in the mailing of a supplemental office action or notice of allowance. PTA loss can also occur in certain situations when the IDS is filed after a response to an office action, after a decision by the Board of Patent Appeals and Interferences or Federal Court, or after a notice of allowance. However, any PTA loss that results from filing an IDS can be avoided if the IDS is filed in conjunction with filing a statement under 37 C.F.R. § 1.704(d), which affirms that any cited reference was first cited in any communication from a foreign patent office in a counterpart application and that such communication was not received by any individual designated in § 1.56(c) more than thirty days prior to the filing of the IDS.

For more information about how to avoid a loss of PTA when filing an information disclosure statement, click here.

European Patent Rule Changes Set to Take Effect April 1
The European Patent Office (EPO) is implementing a number of new patent rules that take effect on April 1, 2010. The upcoming rule changes make it more difficult to protect a number of distinct inventions in a single application and also greatly reduce the time period in which divisional applications can be filed. As a result, patent owners should take care to make sure no loss of rights occur in their patent portfolios – particularly those that received a first official communication from the EPO more than two years ago. The imminent rule changes also require applicants to elect subject matter and address claim objections at a much earlier stage of prosecution, and further, make responses to search reports mandatory in many cases.

For further discussion of the European patent rule changes, and how they may affect your practice, click here.

BPAI Declares No New Arguments in Reply Brief
The Board of Patent Appeals and Interferences (the BPAI) recently determined that arguments made for the first time in a reply brief will not be considered on appeal without “good cause.” In a recent precedential opinion, ex parte Atsuhisa Nakashima, the BPAI interpreted 37 C.F.R. § 41 as not requiring the BPAI to consider new reply brief arguments. In its principal brief, the applicant argued that the Examiner’s suggested combination would destroy the functionality of the primary reference and that the references were deficient with regard to an aspect of the claims at issue. The applicant included a new argument in the reply brief that there was no reason to combine the references because the result would be undesirable. The new argument was made without any stated reason as to why it had not been presented in the principal brief. The BPAI refused to consider the new argument, stating that “any argument not timely presented in the principal Brief [sic] will not be considered when filed in a Reply Brief, absent a showing of good cause explaining why the argument could not have been presented in the Principal Brief.” It is worth noting that a pending en banc Federal Circuit case, Hyatt v. Kappos, will consider the limits of new arguments and evidence that can be presented in appeals of BPAI decisions to a District Court under 35 U.S.C. § 145. The outcome of this case may impact an applicant’s strategy for selecting arguments and evidence to present at various stages of appeal.

A copy of the Nakashima opinion can be found on the USPTO website at the following link.

Contradictory Statements Made to Foreign Patent Office and Withheld from USPTO Lead to Finding of Inequitable Conduct
In Therasense, Inc. v. Becton, Dickinson and Co., the Federal Circuit held that an applicant’s characterization of its own prior art reference in proceedings with the EPO that directly contradicts statements made to the USPTO by the applicant regarding the same reference is material to patentability and can serve as the basis of a finding of inequitable conduct. This case was distinguished from previous cases that held that attorney argument concerning the content of prior art is generally insufficient for a finding of materiality because the representations made to the USPTO were factual assertions provided in declaration and affidavit form. During prosecution of the patent-at-issue, the applicant submitted a declaration and affidavit to overcome the applicant’s own prior art reference. Statements in the declaration, however, contradicted representations previously made to the EPO in revocation proceedings of the corresponding European application of that prior art reference. The Federal Circuit affirmed the district court’s ruling of inequitable conduct and concluded that “[a]n applicant’s earlier statements about prior art, especially one’s own prior art, are material to the PTO when those statements directly contradict the applicant’s position regarding that prior art in the PTO.” Although attorney argument is generally insufficient for a finding of materiality, and care should generally be taken to avoid contradictory statements during the prosecution of related applications, practitioners should consider alerting the USPTO of contradictory statements made in related cases, whether in domestic or foreign jurisdictions, especially when those statements directly contradict assertions made to the USPTO in the form of an affidavit or declaration.
For more analysis of this decision, and actions you can take to prevent a similar outcome, click here.

USPTO’s Small Entity “Bump and Dump” Program Extended
Our January 2010 issue included a report about the initiative implemented by the USPTO to reduce the backlog of patent applications by permitting small entity applicants to expressly abandon one application and file a petition seeking special status for a second application. This initiative is sometimes referred to as the “Bump and Dump” program. To be eligible for this program both applications must be unexamined, must have been filed earlier than October 1, 2009, and must either be owned by the same party or have at least one common inventor. Further, the abandoned application cannot be revived and fees associated with the abandoned application cannot be recovered. The USPTO recently announced that this program has been extended through June 30, 2010. Small entity applicants that have unexamined applications that they are no longer interested in pursuing should consider taking advantage of this rule to expedite examination of another application.

Additional details and requirements are available from the USPTO website via the following link.

Deliberate Indifference of Competitor’s Patent Leads to Finding of Induced Infringement
In a recent Federal Circuit decision, the court held that a defendant that acted with deliberate disregard to an overt risk that a device it copied might be associated with a patent was liable for induced infringement. While induced infringement requires both an occurrence of actual infringement and a finding that the alleged infringer knew or should have known that actions would induce actual infringements, this case makes it clear that pleading ignorance to avoid actual knowledge is not sufficient when there is an overt risk that an element of the offense existed. In SEB v. Montgomery Ward, the company accused of inducing infringement argued that because it had no knowledge of the patent in question, it could not be liable for induced infringement. However, because the accused infringer both admitted to copying a product that was covered by the patent, and failed to mention that it copied the product to the attorney conducting the clearance opinion, the court found that the accused infringer acted with “deliberate indifference,” and thus did have the requisite knowledge for finding induced infringement. In view of this decision, companies should act prudently when monitoring its competitors’ products and be forthright in providing attorneys providing clearance opinions with any prior art references or products that might be similar to the product being evaluated.

For more analysis of this decision, and related practical tips, click here.

Nutter's IP Bulletin is a bi-monthly publication of the Intellectual Property Practice at Nutter McClennen & Fish LLP in Boston. For further information, please contact your Nutter attorney at 617-439-2000.

Recognized as a “Go-To” patent firm by IP Law & Business and Corporate Counsel, Nutter is dedicated to making its clients’ strategic goals a reality and to maximizing the protection and value of their intellectual property. The firm has a long track record as the trusted IP advisor to innovative public and private companies, medical institutions and research universities, investors, entrepreneurs and inventors.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

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