IP Bulletin, March 2011Print PDF
Patent Reform Act of 2011
The U.S. Senate recently passed the America Invents Act (AIA) by an overwhelming margin. Though this is the fourth consecutive Congress in which comprehensive patent reform legislation has been introduced, because of the quick and definitive treatment the Senate gave the AIA, there is a sense that the AIA could end up being the first substantial Congressional overhaul of the U.S. patent system in nearly 60 years. If passed by the House of Representatives in its current form, the AIA would provide for the transition to a “first-to-file” system, establish a post-grant review process, and provide additional guidance for calculating damages in patent litigation.
USPTO–CIPO Patent Prosecution Highway Made Permanent
The United States Patent and Trademark Office (USPTO) and the Canadian Intellectual Property Office (CIPO) agreed to permanently implement the Patent Prosecution Highway (PPH) program between the offices as of January 29, 2011. Under the PPH, an applicant whose claims are determined to be allowable in the CIPO can request accelerated examination in the USPTO, and vice versa. Further, the PPH program allows an office to use earlier examination conducted in the other office to accelerate the subsequent examination. The benefits can include faster examination and lower costs. In preparing for a trip on the PPH, however, practitioners should be aware of some important practice tips.
USPTO Issues Supplementary Examination Guidelines Regarding 35 U.S.C. § 112
The USPTO recently published supplementary examination guidelines for determining compliance with 35 U.S.C. § 112. The § 112 Guidelines provide a breakdown of the issues examiners should consider to “help ensure that the public receives meaningful disclosure commensurate with the patent rights being issued.” It is anticipated that the guidelines will provide a useful reference to applicants and practitioners when drafting claims or arguing a § 112 rejection.
USPTO to Start “Fast-Tracking” Applications for a Fee
The USPTO and the White House recently announced that they are moving forward with a flexible “Three-Track” patent examination program that will provide applicants more control over the processing of their patent applications. Under the Three-Track program, applicants can request expedited examination (Track I), standard processing (Track II), or delayed examination (Track III). Since its initial proposal in June 2010, the Three-Track program, and particularly the “fast track” option, has received overwhelming support. Although the details of the Three-Track program are still being finalized, Director Kappos of the USPTO indicated that the USPTO is preparing to implement the “fast track” option immediately. Under the proposed “fast track” option, applicants will have the opportunity to have an original U.S. non-provisional application fully examined within 12 months of its filing date for a proposed fee of $4000 (though a reduced fee is being proposed for small entities).
Rejection of the 25% Rule in the Calculation of a Reasonable Royalty Rate
In determining patent infringement damages, the “25% Rule” presumes that 25 percent of the operating profit from the sale of an infringing product is a reasonable royalty rate. Although this rule-of-thumb has been relied upon by many litigants in the past, the 25% Rule was recently rejected by Federal Circuit in Uniloc v. Microsoft as “a fundamentally flawed tool.” In particular, the Federal Circuit overturned the district court’s determination of damages because it was based on the 25% Rule, which “fails to tie a reasonable royalty base to the facts of the case at issue.”
Global-Tech, Inc. v. SEB, S.A. – A Changing Standard for Active Inducement of Patent Infringement?
While active inducement of infringement has traditionally required that the actor “knew or should have known” that his actions would induce infringement, thereby requiring actual knowledge of a U.S. patent that covers the infringing process or product, this “state of mind” requirement is being reexamined by the U.S. Supreme Court in the case of Global-Tech v. SEB S.A.
The Federal Circuit’s overly-relaxed “deliberate indifference” standard did not appear to sit well with the Court during oral arguments, but the overall tenor of the hearings suggested that the Court supports the ultimate result that Global-Tech should be liable for inducing infringement despite their apparent lack of knowledge of the existence of the asserted patent.
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