Tuesday, June 07, 2005

More on patent quality, patent reform

As readers of this blog know, I have taken issue with the analysis of Quillen and Webster suggesting that the "patent grant rate" is 97% or even 85%. As a factual matter, the numerical approach of Quillen and Webster allows the grant rate to be over 100%. As a legal matter, there was no showing that continuing applications are a repeated attempt to claim the same subject matter as prosecuted in the parent application. For divisionals and cips, the claims of the continuing application are, almost by definition, not the claims prosecuted in the parent application.

Putting that aside for a moment, the remaining argument is that the "grant rate" of the USPTO is higher than that of other countries such as Japan and in Europe. However, the only way the grant rate is elevated in the US is by making certain assumptions about continuing applications, a format that does not exist in Japan and in Europe. Further, the argument assumes that the claims in the US are the same as in Japan and in Europe, which is not true.

Thus, we frequently have a leap from "USPTO patent approval rates are higher than
some other major nations' patent offices," to an assertion of a pervasive "issuance of questionable patents," without a filling in of any proof that there is a quality problem.

Thus, in the Legal Intelligencer (May 23, 2005) from Jonathan P. Miller on patent reform:

The issuance of questionable patents can be explained, in part, by
two aspects of patent examination that serve to enable such issuance.
First, during patent prosecution, the USPTO expends clearly limited resources for
investigating prior art that potentially anticipates or renders obvious
a claimed invention. Each examiner has from about eight to 25 hours to
search for prior art, including patents and publications that are relevant to
applications. Such time constraints can be particularly troublesome for certain
subject matter, such as biotechnology and software.

Second, the patent applicant is not required to perform a search of
prior art. Rather, applicants are only required to submit prior art of which
they are aware, resulting in examinations where the best prior art is not
considered by the USPTO.

Given such limited resources, accused infringers have often wondered
why the standard of evidentiary proof required to prove invalidity is greater
than the standard to have a patent approved for issuance in the first place.
During examination, as an ex-parte proceeding, an applicant only has to prove
why the claimed invention is new and non-obvious by a preponderance of the
evidence. However, during patent litigation, the alleged infringer has to prove
why the patent is invalid under a clear and convincing standard.

While the standard response to an accusation of patent infringement
in the United States is to either negotiate a license with the patent owner or
engage in patent litigation, the USPTO has implemented less expensive and less
time consuming procedures to allow third parties to provide prior art after
issuance of the patent at issue.

Of the opposition process itself -->

With respect to substantive issues, the U.S. version of the
opposition procedure set forth in the Committee Print proposed legislation
includes a nine-month limit from the time of patent issuance, which is intended to
ensure that patent owners are only under threat of opposition for a short
period of time after patent issuance and not for the entire life of the patent.
The length of the opposition proceeding itself is limited to 12 months, with a
six-month extension upon a showing of good cause.

Any opposer will be able to challenge the validity of the patent
claims on a variety of grounds, including double patenting, novelty, obviousness,
written description, enablement, utility and improper claim enlargement during
any reissue. An administrative patent judge panel will preside over the
proceeding, and oral arguments will be permitted. Discovery will include
depositions and limited cross-examination, but additional discovery may be permitted if the panel determines that additional discovery is required in the interests
of justice. Appeal from the opposition proceeding would be directly to the
Federal Circuit, eliminating any trial at the district court level. Such an
opposition will be able to be dismissed if it "lacks substantial merit."

For the proposed post-grant opposition, the evidentiary standard is
that of preponderance of the evidence, rather than the clear and convincing
standard, bringing the opposition standard into line with the examination
standard. In addition, the Committee Print does not require the identification of
the real party in interest, which would reduce the concern from opposing parties
that the simple act of opposing the patent would immediately alert the patent
owner to potential infringement. [LBE note: the idea that the patentee is attacked by an unknown opponent has been criticized by many] One drawback from an opposer's point of view is that the opposer will be barred from raising, in any subsequent proceeding, any issue of law or fact actually decided. However, additional factual information may still be provided in subsequent proceedings if it is determined that such a fact could not have reasonably been discovered or presented in the opposition
proceeding by that opposer. [LBE note: the issue of estoppel has been highly debated.]

The article contained the following paragraph:

The relative success in weeding out poor patents is evident when the
number of patent revocations is compared between the EPO opposition procedure
and the U.S. re-examination procedure. Only about one in 10 of such U.S.
re-examinations are revoked, while one in three of such EPO-opposed applications are
revoked. The median time to determine the outcome of the opposition, including
the opposition itself and any appeal, is about three years.

In comment, one notes that there are far fewer reexaminations in the US than oppositions in Europe, and that one should consider the impact on CLAIMS, not the impact on the "whole patent." In most reexaminations in the US, the scope of claims is narrowed.


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