Patent Term Adjustment Developments Since Exelixis, Inc. v. Kappos, 2012 WL 5398876 (E.D. Va. Nov. 1, 2012)

On November 1, 2012, the district court for the Eastern District of Virginia (EDVA) granted Exelixis its motion for summary judgment in Exelixis, Inc. v. Kappos (hereinafter Exelixis I). Judge Ellis, III, in granting the plaintiff’s motion, ruled that the USPTO has been incorrectly calculating the patent term adjustment (PTA) in cases where a first Request for Continued Examination (RCE) was filed more than three years after the filing date of the application. In December 2012, the USPTO appealed the district court’s ruling in Exelixis I and the Court of Appeals for the Federal Circuit (CAFC) is expected to weigh in on the issue by the end of this year.

In the aftermath of Exelixis I, over fifty civil cases have been filed in the EDVA seeking increases in PTA in view of its ruling. About a third of these cases have been stayed and held in abeyance pending a decision on appeal in Exelixis I. Two PTA lawsuit decisions since Exelixis I have demonstrated that reasonable judges disagree on whether there is an error on the part of the USPTO.  This suggests that the outcome of the appeal to the CAFC is less predictable and any further action by patentees in the coming months will have to factor in this uncertainty in the law. We are also aware of petitions for reconsideration of PTA filed post-Exelixis I that are pending at the USPTO.  As of February 18, 2013 the USPTO has not issued a statement or provided guidance as to how these petitions will be handled while its appeal in Exelixis I is pending.

In the remainder of this article, we briefly discuss recent district court rulings in Novartis AG V. Kappos (No. 10-cv-1138) and Exelixis, Inc. v. Kappos (No. 12-cv-0574) and PTA provisions in H.R. 6621 signed into law on January 13, 2013. We end by recommending a strategy for patentees to preserve their rights in light of these developments.

Novartis AG v. Kappos, No. 10-cv-1138 (D.D.C. Nov. 15, 2012)

      Novartis AG v. Kappos (No. 10-cv-1138), hereinafter Novartis, filed in the months following the CAFC’s decision in Wyeth v. Kappos, 591 F.3d 1364 (Fed. Cir. 2010), was decided on November 15, 2012. The plaintiff’s complaint included 23 patents for which PTA corrections were requested under different causes of action based in law and equity. For the patents where Novartis had argued that the first RCE filing dates entitled them to additional PTA, the D.C. district court (the pre-AIA court of exclusive remedy for PTA matters) ruled in their favor adopting the Exelixis I finding “that the PTO’s interpretation is contrary to the plain and unambiguous language of §154(b)(1)(B), and that it contravenes the structure and purpose of the statute.”

Two other rulings in Novartis may be of significance to patentees who are faced with the decision as to whether they should await the result of the Exelixis I appeal before they request a recalculation of PTA. Novartis attempted to challenge the PTA determinations in view of Wyeth for patents that fell outside the 180-day post-grant window. Novartis made two arguments, one under equitable tolling and the other under the discovery rule. The court ruled that 35 U.S.C. §154(b)(4)(A) should be considered as a “claim-processing rule” and therefore may be entitled to a rebuttable presumption in favor of equitable tolling. However, the court found that no equitable tolling applies to the PTA statute of limitations based on Novartis’ arguments that it did not know that certain challenges to the PTA’s interpretation of the statute were possible until one such challenge was decided in Wyeth  and another made by Abbott. The court reasoned that Novartis was free to raise the same issues addressed in Wyeth and in Abbott in its own claims within the statute of limitations. The discovery rule states that “a cause of action accrues when the injured party discovers—or in the exercise of due diligence should have discovered—that it has been injured.” Novartis contended that until the CAFC had affirmed the district court’s decision in Wyeth, Novartis had not discovered the harm and in the case of the post-three year RCE filing, it had not yet discovered the harm. The court while declining to rule on whether the discovery rule applies to 35 U.S.C. §154(b)(4)(A), dismissed Novartis’ argument as a “rehash” of the arguments for equitable tolling. The court held that all the facts that went into the PTA calculation were known to Novartis as of the date that the patent was granted and hence any procedural defect was discoverable on that date.

Exelixis, Inc. v. Kappos [No. 12-cv-00574]

On January 28, 2013, in a parallel case, Exelixis v. Kappos (No. 12-cv-0574) (hereinafter Exelixis II), Judge Brinkema of the district court for the Eastern District of Virginia arrived at the opposite conclusion as the court in Exelixis I when she granted the USPTO’s Motion for Summary Judgment. Judge Brinkema found that “… a reasonable interpretation of the statute and its legislative history support the conclusion that there is no reason to treat RCEs differently based upon when they were filed, and that accordingly, the PTO’s regulation deserves Skidmore deference because it is a ‘reasonable conclusion as to the proper construction of the statute.’”

Under a Skidmore analysis, the court must analyze whether “the agency has conducted a careful analysis of the statutory issue,” “the agency’s position has been consistent and reflects agency-wide policy,” and “the agency’s position constitutes a reasonable conclusion as to the proper construction of the statute, even if [the court] might not have adopted that construction without the benefit of the agency’s analysis.” Since the USPTO’s notice-and-comment rule-making process considered inputs from practitioners and took a year to implement after the law went into effect (more than a decade ago), the court found the PTA regulations to have met the threshold under Skidmore and gave deference to the agency’s construction of the statute.

The effect of H.R. 6621 signed into law on January 13, 2013

H. R. 6621 entitled “An Act to correct and improve certain provisions of the Leahy-Smith America Invents Act and title 35, United States Code” modified sub-sections of 35 U.S.C. §154(b) which relate to Patent Term Adjustment. Relevant PTA revisions from the amendment are summarized below:

  1. The Director now has until the date of issuance of the patent to transmit a notice of the PTA (the prior version of this provision required that notice of the PTA be transmitted to the applicant with the written notice of allowance).
  2. The applicant has one opportunity to request reconsideration of a PTA determination made by the Director. An applicant dissatisfied with the Director’s decision on the applicant’s request for reconsideration has the exclusive remedy by a civil action against the Director in the United States District Court for the Eastern District of Virginia within 180 days of the date of the Director’s decision on the applicant’s request for reconsideration. In other words, the applicant can no longer bypass the PTO and file a lawsuit directly with the court.  Now, the patentee may only reach the courts after the agency action is final. However, the applicant will now have 180 days from the date of the decision by the Director to file a lawsuit at the EDVA. Under the earlier version of 35 U.S.C. §154(b)(4)(A), the patentee had 180 days from the grant date of the patent to file a civil lawsuit. This provision’s amendment is consistent with the ordinary tolling rules that some of the courts have adopted.

The effective date of H.R. 6621 may be a cause for concern to patentees. The language of the bill suggests that any PTA proceedings commenced on or after the date of enactment are subject to the new provisions. This means that patent holders who did not timely file a Request for Reconsideration of the USPTO’s PTA award within two months of the grant date but who might want to bring a civil action for additional PTA within 180 days of the patent’s issue date will need to seek relief from the retroactive effectivity of the amendments to 35 U.S.C. §154(b)(4)(A). Whether this change in the law is significant enough to trigger equitable tolling of their claims remains to be seen.

How do the recent changes to 35 U.S.C. §154(b) and the recent PTA decisions translate into changes in patent practice?

The USPTO has already filed an appeal in Exelixis I and it likely that the ruling in Exelixis II is going to be appealed by the plaintiff and the two appeals will be consolidated. Until the appeals process has been exhausted patentees should continue to file PTA petitions to the Director (using a calculation based on Exelixis I) within two months of the patent grant date in order to preserve their rights.  It is also likely that the Director will not review any PTA petitions under Exelixis I filed while the appeal is pending, which means that the patentee can hold off on filing a complaint at the EDVA under the new provisions of 35 U.S.C. §154(b)(4)(A) until the CAFC has ruled on the matter. If the CAFC affirms Exelixis I, the USPTO will most likely grant the petitions for recalculations.

For patents that issued between August 22, 2012 and November 13, 2012 for which a patentee failed to file a petition for reconsideration of PTA but was intending to file a civil suit at the EDVA, we recommend promptly filing such a suit arguing equitable tolling of the statute of limitations under the new provisions of 35 U.S.C. §154(b)(4)(A). As the D.C. court in Novartis opined, equitable tolling has been justified in many cases where an unforeseeable change in law made it impossible for the petitioners to file their petitions in a timely fashion, and a judge may find this argument persuasive in the present situation.

 

Wyeth v. Kappos, 591 F.3d 1364 (Fed. Cir. 2010)

Abbott Therapeutics v. Kappos, 1:10-cv-01853 (filed October 29, 2010)

Categories: Patent term adjustment Tags:

Patent to the People: Applying Crowdsourcing to the Patent Lifecycle

October 31, 2012 Leave a comment

From funding a new technology startup to finding the best new restaurant in the city, crowdsourcing has impacted how we locate information, make decisions, and it can make seemingly impossible tasks a reality.  For example, websites such as Quora.com and Yahoo Answers, leverage the crowd to help answer user posed questions ranging from the esoteric to the basic. Kickstarter and Kiva leverage the crowd to fund entrepreneurial and charitable projects.  While Yelp and Zagat use the wisdom of the crowd to help with your dining out decisions, X Prize competitions encourage and motivate the crowd to achieve space exploration and other scientific pursuits.  The principles of crowdsourcing can be applied to esoteric fields such as patents as well.  This article examines the basics of crowdsourcing and application of crowdsourcing to the patent lifecycle.

Definition of Crowdsourcing

The concept of crowdsourcing is not new, although the formalization of the term is often attributed to Jeff Howe’s June 2006 Wired Magazine article “The Rise of Crowdsourcing”[i] as a combination of “crowd” and “outsourcing”.  A more complete definition of crowdsourcing as attributed to Arolas Estellés and Ladrón González may be stated as:

“… a type of participative online activity in which an individual, an institution, a non-profit organization, or company proposes to a group of individuals of varying knowledge, heterogeneity, and number, via a flexible open call, the voluntary undertaking of a task. The undertaking of the task, of variable complexity and modularity, and in which the crowd should participate bringing their work, money, knowledge and/or experience, always entails mutual benefit. The user will receive the satisfaction of a given type of need, be it economic, social recognition, self-esteem, or the development of individual skills, while the crowdsourcer will obtain and utilize to their advantage that what the user has brought to the venture, whose form will depend on the type of activity undertaken”.[ii]

Crowdsourcing can also be summarized as outsourcing tasks to an undefined or non-specified population that is motivated by monetary, reputation or other gains. Although crowdsourcing can be online or offline, the recent popularity and implementations of crowdsourcing hinge on the Internet, and thus, Internet as a tool or platform is also implicitly embedded in the definition of modern crowdsourcing.

Crowdsourcing can be classified based on the task to be sourced to the crowd, how the crowd is utilized, or a combination of both.  For example, types of crowdsourcing includes crowdvoting, where the crowd provides opinion to reach a judgment on a particular topic (i.e., Tripadvisor provides user generated reviews regarding hotels). Crowdfunding utilizes the crowd to contribute a small amount of money to fund a project (i.e., Kickstarter for funding projects ranging from technology startups to comic publications). Wisdom of the crowd utilizes the crowd to contribute large amounts of information to solve a problem or to aggregate them to create a more complete and accurate picture of a topic (i.e.,InnoCentive, which ‘enables scientists to receive professional recognition and financial awards for solving R&D challenges where solvers can submit solutions through the web which are reviewed by the seeker). Crowd inducement utilizes prizes, typically monetary to facilitate idea generation and discussion (i.e., the Netflix Prize offering one million dollars for the best collaborative filtering algorithm to predict film recommendations and the X-Prize includes twenty million dollars for the first team to land a rover on the moon). And microwork, which utilizes users to complete small tasks, typically human intelligence tasks for which computers lack aptitude (i.e., captchas for digitizing the archives of Google  Books and Amazon’s Mechanical Turk that asks the crowd to complete tasks such as reviewing satellite images for a small amount of money).

Shortcomings of the Crowd

There can be many pitfalls that could hinder the effectiveness of crowdsourcing. For example, it may be difficult to guarantee a minimum quality of the entries since members of a crowd are often distributed, anonymous and the participants may lack the proper credentials.  This may result in a large number of poor quality entries that can overwhelm and discourage the sponsor of a project.  Crowdsourcing can be susceptible to social influences where popularity can not only mislead – it can also derail a project by directing the crowd towards the wrong direction. One infamous example is when NASA crowdsourced the naming of a new room of the International Space Station resulted in the crowd being directed by comedian Stephen Colbert, whose name won the contest.

Furthermore, because of the egalitarian aspects of the crowdsourcing, experts or the best talents may either avoid the crowd since they may not be motivated by the same factors as the rest of the crowd, or the expert’s opinion or voice may be drowned by the many other participants of the crowd.

Many pitfalls of crowdsourcing were highlighted in an episode of the medical mystery TV show, House M.D. titled “Epic Fail”.  In the episode, a patient crowdsourced his medical diagnosis by offering a $25,000 reward for the correct answer online.  The patient’s doctors were swamped with various suggestions from the crowd (poor quality entries).  The patient decided on the most popular choice (popularity misdirection) which was incorrect.  Ultimately the correct diagnosis came from Dr. House, the expert, who eventually joined the crowd and anonymously submitted the right answer.  House was not motivated by the reward, instead, he was motivated by the lack of correct answers and because he was bored (expert participation).  Although the episode is fictional, it highlights that crowdsourcing does not always produce the correct answer, specifically, for tasks that require high level of expertise.  [iii]

Patent to the People

Various aspects of crowdsourcing can be applied to the patent lifecycle.  In particular, one of the challenges that may hinder the quality of the patents is the difficulty in uncovering relevant prior art that could impact the patentability or validity of a claim.  In the United States, the scope of prior art includes printed publications in this or a foreign country[iv].  A publication has to be shown that it has been disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art, exercising reasonable diligence, can locate it.”[v] An electronic publication, including an on-line database or Internet publication, is considered to be a “printed publication” within the meaning of 35 U.S.C. 102(a) and (b) provided the publication was accessible to persons concerned with the art to which the document relates.[vi]  Furthermore, a doctoral thesis indexed and shelved in a library is sufficiently accessible to the public can constitute prior art as a “printed publication.” Thus, the scope of possible prior art can be very broad and diverse, ranging from U.S. and foreign patent documents that are searchable using free or commercial databases, to various non-patent literature including doctoral theses, white papers, journal publications, to product specifications.

A well formulated search by a patent professional can uncover relevant prior art that can be invaluable to the pre-filing/patentability study as well as patent validity study.  There are situations where the wisdom of the crowd, especially a crowd comprising experts in the field have personal experience with a particular technology may provide additional insight.

Some of the patent related crowdsourcing websites include, the Patent Busting Project by the Electronic Frontier Foundation, the newly established Ask Patent Beta by Stack Exchange,Crowd IPR, the Peer-to-Patent project, and the Article One Partners platform.  This article focuses further on the more established Peer-To-Patent project and the Article One Partners platform.

Peer-to-Patent

The Peer-to-Patent project (P2P) was a pilot crowdsourcing program that started as a collaboration between the New York Law School and the U.S. Patent and Trademark Office (USPTO).  The goal of the project was to leverage community reviewers to help the USPTO to find the information relevant to assessing the claims of pending patent applications and improve the quality of patents. [vii]

The goal of P2P was to utilize organized public participation to improve the quality of issued patents.  The program involved having the crowd to 1) review and discuss posted patent applications, 2) research and locate prior art references 3) upload prior art references relevant to the claims, and 4) annotate and evaluate submitted prior art.  The P2P program then forwarded to the USPTO the top ten references along with commentary. The goal of the project was to prove that organized public participation can improve the quality of issued patents.

P2P was limited to patent applications that have been classified in any of U.S. classifications 380, 700, 703, 705 through 715, 717, 718, 719, or 726. These cover Computer Architecture, Software and Information Security, Business Methods and E-Commerce). At the conclusion of the pilot program, a total of 226 applications participated in P2P, nearly half (49 percent) of the applications came from three classes: 705, 707, and 709. Class 707 – Data Processing and class 709 – Electrical Computer and Digital Process systems are both part of Software classifications.[viii]

The Crowd

P2P’s crowd consisted of 2,800 registered reviewers with 686 active reviewers.[ix]  Many members of the crowd that participated in the program indicated that they were participating in the U.S.; however, reviewers were also from around the world including India, United Kingdom, Canada, and Japan.  Roughly one-third (34 percent) of the participants identified themselves as “computer professionals/technologists.” The next largest participant group in terms of background was those who identified themselves as “engineers” (17 percent), followed by “legal professionals” (9 percent), “patent professionals” (7 percent), “research scientists” (6 percent), and “students” (6 percent).[x]

The Motivation

P2P did not offer monetary reward for the crowd to participate. However, P2P gave out Prior Artist Awards to reviewers that submitted prior art that was later used in a USPTO office action.[xi]

The Result

In total, 226 patent applications were reviewed by reviewers (referred to as citizen-experts by P2P).  602 references were submitted by the reviewers, out of which 53% of the references were non-patent prior art.[xii]  Out of the 602 references submitted by the reviewers, 41 references were used in one or more rejections against 38 patent applications.  The final dispositions of the 38 applications where P2P references were used in a rejection at the time that the program concluded were: 22 applications or 58% were allowed, 3 or 8% were subject to a Request for Continued Examination, 3 of 8% were subject to an appeal and 10 or 26 percent were abandoned.[xiii]

In total, 6.8% (41 out of 602) of the reviewer submissions directly impacted the prosecution of 16.8% (38 out of 226 applications) of the participating application.  Furthermore, based on the survey conducted by the program, 20% of the examiners noted that P2P references would have gone undiscovered.  Assuming that the examiners would have found 80% of the reviewer submissions, then one can conclude that the Peer-to-Patent program produced only 8 references or 1.3% of the all references submitted that 1) directly affected prosecution of the application and 2) were inaccessible and/or would have been missed by the examiner.

Article One Partners

Article One Partners (AOP) is a privately held company started in 2008 that leverages the crowd to seek patent validity, freedom-to-operate and due diligence evidence.[xiv]  The main focus of AOP is to locate references that can impact the validity of an issued patent to use the references as either negotiation leverage, references for re-examination, and/or evidence for invalidity defenses during litigation.[xv]

AOP serves as a platform where a client would commission a study, such as to locate validity evidences for a patent, the crowd then review the study request, and send in research related to the Study, the individual who submitted the highest quality research wins a monetary reward of up to $5,000, as well as up to 10 Most Valuable Researchers winning $100 each.[xvi]

The Crowd

AOP’s crowd consists of 23,000 registered researchers with access to additional potential researchers via AOP’s affiliate programs.[xvii]  However, it is unclear how many of the registered researchers are active with AOP studies. AOP researchers are located in over 150 countries. 23% of the researchers have a hardware background, followed by medicine/pharma at 22%, biology at 14%, chemistry at 12% and software at 8%, 14% of the researchers have background in other fields.[xviii]

Members of AOP’s crowd are not all equal.  AOP implements a submission point system and a level system to distinguish the experience of the researcher.  For example, a new researcher is limited to 5 submissions per study, once a researcher advances in level (associate, researcher, senior, principal, master, and fellow), the number of submission per study the researcher can submit increases. [xix]

The Motivation

Perhaps the biggest difference between AOP and P2P is the cash award.  AOP offers the individual who submitted the highest quality research wins a monetary reward of up to $5,000, as well as up to 10 Most Valuable Researchers winning $100 each.  In addition, AOP offers profit sharing based on the level of the researcher.  The winners are also listed on AOP’s website, and some of the more prolific winners are featured in interviews.

The Result

AOP has awarded $3,410,500 to date from 612 completed studies.  AOP claims that 60% of the time, AOP studies resulted in “very high quality” prior art.  According to AOP, AOP references have been used in re-examinations and have been used to avoid litigations.[xx]

AOP specifically promotes locating foreign/non-English references, non-patent literature, non-digitized submissions and submissions from an obscure or unique resource.  This focus on non-traditional references is reflected in AOP’s award system and pricing structure.  For example, a general study which covers patent literature and non-patent literature carries a $5,000 award while a patent only study carries a $3,000 award. Additionally, AOP’s Most Valuable Researcher program, which awards $100 to up to 10 researchers, rewards identifying non-patent literature, non-digitized submissions, non-English reference and submissions from an obscure or unique resource.[xxi]

AOP’s emphasis on non-patent literature, non-digitized submissions, and non-English reference may direct the crowd away from more traditional resources such as digitized patent databases. In other words, the AOP’s incentive structure rewards identifying non-traditional references may be at the expense of more easily identifiable prior art, such as patents.  Additionally, the cost of sponsoring an AOP study is likely to be higher than conducting a traditional invalidity search.  Thus, an AOP study may be most effective as a supplement to a traditional search.

The Future of Patent Crowdsourcing

With the Americas Invents Act (AIA), the government seems to promote the public’s participation in the patent lifecycle with the newly established third party submission procedures.  For example, the AIA provides new opportunities for third party intervention in the prosecution process in the form of pre-issuance submissions.[xxii]

Specifically, pre-issuance submissions under the AIA allow a third party to submit references along with a concise description between publication of the application and the earlier of: (a) the date of a notice of allowance; or (b) the later of (1) six months after publication or (2) the date of the first rejection.  The USPTO has made pre-issuance submissions more accessible by making the submission free for up to three references[xxiii] and by making the submission anonymous.

Indeed, pre-issuance submission may become a venue used by crowd (general public, a competitor of the patent applicant, etc.) to participate in the patent lifecycle and may ultimately lead to improved patent quality.


[i] Howes, Jeff. The Rise of Crowdsourcing http://www.wired.com/wired/archive/14.06/crowds.html

[ii] Estellés Arolas, E.; González Ladrón-de-Guevara, F. (2012) Towards an integrated crowdsourcing definition. Journal of Information Science (in press).  http://www.crowdsourcing-blog.org/wp-content/uploads/2012/02/Towards-an-integrated-crowdsourcing-definition-Estell%C3%A9s-Gonz%C3%A1lez.pdf.

[iii] See Champion, Stanton. Four Crowdsourcing Lessons from House MD, http://blog.utest.com/four-crowdsourcing-lessons-from-house-md/2009/10/.

[iv] See MPEP 2132.01 Publications as 35 U.S.C. 102(a) Prior Art http://www.uspto.gov/web/offices/pac/mpep/s2132.html.

[v] In re Wyer, 655 F.2d 221, 210 USPQ 790 (CCPA 1981) (quoting I.C.E. Corp. v. Armco Steel Corp., 250 F. Supp. 738, 743, 148 USPQ 537, 540 (SDNY 1966)).

[vi] See In re Wyer, 655 F.2d 221, 227, 210 USPQ 790, 795 (CCPA 1981).

[vii] See About Peer to Patent http://peertopatent.tumblr.com/tutorials and http://peertopatent.tumblr.com/abouttheproject.

[viii]See page 18, Peer to Patent First Pilot Final Results,  http://dl.dropbox.com/u/2541719/First%20Pilot%20Final%20Results.pdf.

[ix] Id. at page 21-24.

[x] Id.

[xi] See Pilot 2 Prior Artist Awards http://peertopatent.tumblr.com/.

[xii] See page 26, Peer to Patent First Pilot Final Results,  http://dl.dropbox.com/u/2541719/First%20Pilot%20Final%20Results.pdf.

[xiii] Id.

[xiv] See How Did Article One Start? http://support.articleonepartners.com/entries/21785587-how-did-article-one-start.

[xv] See  Why Article One Overview http://www.articleonepartners.com/why-article-one.

[xvi] See Next Step in the Treasure Hunt http://www.articleonepartners.com/how-it-works/submission-rules.

[xvii] See Why is crowdsourcing better or different than using a search firm or a law firm to do the searching?http://support.articleonepartners.com/entries/21869437-why-is-crowdsourcing-better-or-different-than-using-a-search-firm-or-a-law-firm-to-do-the-searching.

[xviii] See Community Stats http://www.articleonepartners.com/meet-our-community/community-stats

[xix] Supra xvi

[xx] Supra xv.

[xxi] Supra xvi

[xxii] See 37 CFR 1.290 http://www.uspto.gov/aia_implementation/120707-preissuance_submission_fr.pdf

[xxiii] There is no fee required if the first submission by a third party in an application lists three
or fewer items, and is accompanied by the statement set forth in 37 CFR 1.290(g). The fee for a Third-Party Submission is currently $180 for every 10 documents listed or fraction thereof, as set forth in 37 CFR 1.290(f).

Categories: Prior Art Tags: , ,

Patent Marking

September 28, 2012 Leave a comment

On September 16, 2011 the America Invents Act (AIA) was signed into law.  Along with the landmark change to the patent system, namely, the switch to a first-to-file system, there were significant changes to patent marking that will change how damages are assessed when a patent is infringed as well as the consequences of falsely marking a product.

In order to recover damages for patent infringement, the infringer must have had notice of the infringed patent.1  Damages may be recovered only for infringement occurring after such notice.  In the absence of actual notice that the invention is patented, constructive notice may be given to the public by marking the product with the relevant patents.

Previous to the AIA marking a product required fixing thereon the word “patent” or the abbreviation “pat.” together with the applicable patent numbers.  If by character of the article this cannot be done, marking could instead be fixed to the packaging.

The downside to directly marking a product is that the patents that cover a product are not static.  New patents may issue after the product has launched.  Additionally patents may no longer be relevant due to design changes.  Older patents may expire while the product is still on the market or some of the patents could be invalidated.  Manufacturing changes to update the mark on a product or its packaging to include the current list of patents are burdensome and expensive.

Incorrectly marking a product with a patent that does not cover the product or no longer covers the product can lead to liability through false marking lawsuits.2  The fine for false marking is up to $500 per article that was falsely marked.  This could lead to incredibly high liability.  Before the AIA, any member of the public was allowed to bring a false marking claim in a qui tam action and was entitled to keep half of the penalty, the other half going to the government.  This led to the creation of a cottage industry of bounty hunters searching for products marked with expired patents and suing the makers of the products.  Some patentees considered not marking their products in order to avoid this risk.

With the passage of the AIA false marking claims are now much less likely.  Under AIA, only the federal government can sue for the $500 per article penalty.  Members of the public can no longer bring these suits.  A competitor who has suffered a direct competitive injury as a result of the false marking can bring a suit but only for recovery of damages adequate to compensate for the injury.  Additionally, marking a product with expired patents no longer constitutes false marking.  While the risk of a false marking claim is much less, it is still possible.  Patents that do not cover the product or have been invalidated could still be considered false marking.

Another change to patent marking with the AIA is the option to virtually mark the product.  Patentees now also have the option to mark by fixing the product or packaging with the word “patent” or the abbreviation “pat.” together with an address of a posting on the Internet that associates the patented article with the relevant patent numbers.  The website must be accessible to the public without charge to meet the marking requirement.  This greatly reduces to cost of updating the marking and reduces the risk of a false marking claim.  With virtual marking the patentee may add or subtract patents from the linked to website quickly and inexpensively without the need to alter manufacturing.  Additionally, virtual marking is beneficial where size restraints or aesthetics may have discouraged listing all of the relevant patents.

Patent marking is important to any patentee.  It not only discourages infringement but also allows additional damages in the case of infringement.  With the new rules to patent marking it is much easier and cheaper to keep marking up to date.

MaxVal’s Patent Marker website provides an online environment for patentees and the public to mark products with patent numbers and to search for patent related details about products.  For more information click here.


1 35 U.S.C. §287

2 35 U.S.C. §292

Categories: Uncategorized Tags: ,

USPTO Announces Rule Change in PTA Relating to Appellate Review

PTA Basics

Patent Term Adjustment (PTA), with its provisions codified at 35 U.S.C. §154(b), extends the term of a patent for certain examination delays at the USPTO. The non-overlapping sum of three kinds of Office delays, referred to by practitioners by their letter designations, A, B, & C, reduced by the delays attributable to the applicant, result in a day-for-day adjustment of patent term.

“A” delays under 35 U.S.C. §154(b)(1)(A)  and rules 37 C.F.R. §1.702(a) and 703(a) cover situations where the Office fails to come through on administrative milestones in examining the application such as mailing a first Office Action within fourteen months of the filing date or mailing subsequent office actions (rejection or Notice of Allowance) within four months of an applicant response.

Term adjustment due to “B” delays under 35 U.S.C. §154(b)(1)(B) and 37 C.F.R. §1.702(b) and 703(b) are based upon the USPTO failing to issue a patent within three years of the filing date of the application. The B-delay period does not include certain periods in the post-three year prosecution history of a patent such as the period after the filing of a Request for Continued Examination (RCE), the period during which an Examiner’s rejection is appealed to the Board of Patent Interferences and Interferences (BPAI)or a Federal court, and periods of delay due to interference proceedings or secrecy orders.

“C” delays under 35 U.S.C. §154(b)(1)(C) and 37 C.F.R. §1.702(c)–(e)  and 703(c)-(e) are adjustments to the term of the patent caused by USPTO delays caused  by interference proceedings, secrecy orders, and successful appellate reviews.

Applicant’s failure to engage in reasonable efforts to conclude prosecution of the application are calculated under the provisions of  37 C.F.R. §1.704.

Summary of Rule Changes

Currently, if an applicant files a Notice of Appeal (N/AP) when the B-delay window is open, the B-delay is tolled starting on the date on which the N/AP was filed and ends on the date of the last decision (by the BPAI or Federal Court) or on the date of mailing of an Office action, if the appeal does not result in a decision by the BPAI. The C-delay that results from a successful appeal is counted from the date of the filing of the N/AP until the date of a final decision by the BPAI or Federal Court that is in favor of the applicant. As is apparent from the preceding description, there is a lack of symmetry in the application of the delay rules. The B-delay clock stops on the date that the applicant files an N/AP and resumes after there is a decision on the appeal or if the Office
backtracks on its rejection, whereas, the C-delay only comes into play when the applicant is successful in appealing the rejection to the BPAI or Federal Court. In other words, if the Office were to reopen prosecution after the applicant filed the appeal brief, this is not treated as a successful appeal under §1.703(e) and the applicant gets no C-delay added to the patent term. Yet, the B-delay clock tolling deprives the applicant of a rightfully deserved adjustment of patent term. In this scenario, the applicant receives less PTA than what is rightfully due under the current rules.

In 77 FR 49354 (August 16, 2012), the USPTO in a Final Rule revised clauses within 37 C.F.R. §1.703 and 1.704 that relate to cases appealed to the BPAI or to a Federal Court and appears to have addressed the above inequity. The B-delay period under the revised rules is only tolled from the date that the jurisdiction of the appeal passes to the BPAI or Federal Court, until the date that there is a last decision by the appellate authority. The C-delay is counted from the date that the jurisdiction of the appeal passes to the BPAI or Federal Court up to the date of a final decision in favor of the applicant. Now, if the Office reopens prosecution after the applicant files the appeal brief, the C-delay is 0 days but there is no tolling of the B-delay since the jurisdiction was never passed to the BPAI or Federal Court.

The other revision to the PTA rules (the newly drafted rule §1.704(c)(11)) now penalizes the applicant for a delay in filing an appeal brief. While there is a three month deadline for almost all applicant tasks written in to 37 C.F.R. §1.704(b), the USPTO has now created an explicit category for an applicant delay during the appeal process.

The examples below illustrate some circumstances under which PTA changes will result from the revision of the rules.

Example 1– Office responds to the applicant’s Appeal Brief with a Notice of Allowance

Facts:

Applicant files an application on January 1, 2008 and receives a Final Rejection on December 1, 2011. Applicant files an N/AP on January 1, 2012, files an Appeal Brief on March 1, 2012, the Examiner mails a Notice of Allowance on June 1, 2012, and a patent issues on August 21, 2012.

Current Rule:

The B-delay in the absence of the notice of appeal would have run from January 1, 2011 (3 years from the filing date of the application) to August 21, 2012 (the issue date), a delay of 517 days. The application of current rule 1.704(b)(4) tolls the B-delay for the period between 1/1/2012 and 6/1/2012 (152 days) – reducing the B-delay from 517 days to 365 days. The current C-delay calculation in this case yields 0 days because none of the conditions of 37 C.F.R. §1.703(c) are met (the case was not successfully appealed to the BPAI or Federal Court).

New Rule:

Under revised rule §1.704(b)(4), there is no tolling of the B-delay (as the jurisdiction of the application never passed to the BPAI or Federal Court) and the B-delay remains at 517 days. The C-delay is unchanged at 0 days. In this example, the applicant gains 152 days of PTA compared to application of the current rule.
Example 2 –Applicant files an RCE after filing a Notice of Appeal

Facts:

Applicant files an application on January 1, 2008 and receives a Final Rejection on December 1, 2011. Applicant files an N/AP on January 1, 2012 and files an RCE on May 1, 2012 and the Examiner mails a Notice of Allowance on June 1, 2012, and a patent issues on August 21, 2012.

Current Rule:

The B-delay in the absence of an appeal would have run from January 1, 2011 (3 years from the filing date of the application) to May 1, 2012 (the RCE filing date), a delay of 486 days. The application of current rule 1.704(b)(4) tolls the B-delay for the period between 1/1/2012 and 5/1/2012 (121 days) – reducing the B-delay from 486 days to 365 days. The current C-delay calculation in this case yields 0 days because none of the conditions of 37 C.F.R. §1.703(c) are met (the case was not successfully appealed to the BPAI or Federal Court).

New Rule:

Under the new rule §1.704(b)(4), there is no tolling of the B-delay (as the jurisdiction of the application never passed to the BPAI or Federal Court ) and the B-delay remains at 486 days. The C-delay is unchanged at 0 days. However, since the RCE was filed more than 3 months after the N/AP was filed, the applicant delay under the new rule §1.704(c)(11) is the time between April 1, 2012 and May 1, 2012 (30 days). In this example, the applicant gains 121 days of PTA.

 

Rule Changes

The rule changes are as follows:

Rule Effectivity : Sep. 17, 2012
  Current Rule New Rule Effectivity
37 C.F.R. §1.703(b)(4) The number of days, if any, in the period beginning on the date on which a notice of appeal to the Board of Patent Appeals and Interferences was filed under 35 U.S.C. 134 and §41.31 of this title and ending on the date of the last decision by the Board of Patent Appeals and Interferences or by a Federal court in an appeal under 35 U.S.C. 141 or a civil action under 35 U.S.C. 145, or on the date of mailing of either an action under 35 U.S.C. 132, or a notice of allowance under 35 U.S.C. 151, whichever occurs first, if the appeal did not result in a decision by the Board of Patent Appeals and Interferences. The number of days, if any, in the period beginning on the date on which jurisdiction over the application passes to the Patent Trial 
and Appeal Board under §41.35(a) of this chapter and ending on the 
date that jurisdiction by the Patent Trial and Appeal Board ends under §41.35(b) of this chapter or the date of the last decision by a
Federal court in an appeal under 35 U.S.C. 141 or a civil action under
35 U.S.C. 145, whichever is later.
Applies to any application that receives a NOA on or after Sep. 17, 2012, and any patent that issues thereon.
37 C.F.R. §1.703(e) The period of adjustment under § 1.702(e) is the sum of the number of days, if any, in the period beginning on the date on which a notice of appeal to the Board of Patent Appeals and Interferences was filed under 35 U.S.C. 134 and §41.31 of this title and ending on the date of a final decision in favor of the applicant by the Board of Patent Appeals and Interferences or by a Federal court in an appeal under 35 U.S.C. 141 or a civil action under 35 U.S.C. 145. The period of adjustment under §1.702(e) is the sum of the number of days, if any, in the period beginning on the date on which jurisdiction over the application passes to the Patent Trial and Appeal Board under §41.35(a) of this chapter and ending on the date of a final decision in favor of the applicant by the Patent Trial and Appeal
Board or by a Federal court in an appeal under 35 U.S.C. 141 or a civil action under 35 U.S.C. 145.
Applies to any application that receives a NOA on or after Sep. 17, 2012, and any patent that issues thereon.
Current 37 C.F.R. §1.704(c)(11) is renumbered to 37 C.F.R. §1.704(c)(12)without any changes to the text. Sep. 17, 2012.
New 37 C.F.R. §1.704(c)(11) N/A Failure to file an appeal brief in compliance with §41.37 of this chapter within three months from the date on which a notice of appeal to the Patent Trial and Appeal Board was filed under 35 U.S.C.
134 and §41.31 of this chapter, in which case the period of adjustment set forth in §1.703 shall be reduced by the number of days, if any, beginning on the day after the date three months from the date on which a notice of appeal to the Patent Trial and Appeal Board was filed under 35 U.S.C. 134 and §41.31 of this chapter, and ending on the date an appeal brief in compliance with §41.37 of this chapter or a request for continued examination in compliance with §1.114 was filed.
 

What to do next?

Immediate PTA checks

  •  Identify whether any applications in your portfolio may be affected by these rule changes
  • Review recently issued patents to determine if filing a timely petition to recalculate PTA will result in an increase in patent term.

Practice Tips

  •  Avoid taking extensions after filing a Notice of Appeal after the new rule is in place

​If you need assistance with identifying applications and patents that might be affected by the rule changes click here to contact us.

——–

The BPAI has been renamed as a result of changes in the law (the elimination of Interferences in a First to File system). The BPAI’s new name is the Patent Trial and Appeal Board (PTAB). In this article we use BPAI throughout for the sake of convenience.

In an appeal to the BPAI, the jurisdiction of the application passes to the BPAI at the earlier of the date that a reply brief is filed or the expiration date of the period to file a reply brief.

Categories: Patent term adjustment Tags: ,

Digital Wallet Patent Landscape Primer

Digital wallet is a technology that facilitates fast and secure electronic transactions. This technology enables and enhances online and physical transactions using computers and portable devices like smart phones, or dedicated digital wallet devices.

In general, digital wallet technology can be broadly classified into the three segments: system, application, and device.  The system segment can be further broken down to two major sub segments viz. communications (device-to-payment point; device-to-device, etc.) and encryption technology.  The application segment includes technology such as payment services, online shopping, digital coupons, financial management, digital/electronic access, etc.  The device segment comprises the physical/hardware entity of the digital wallet. The device could be in the form of mobile phones, plastic cards, dongles, coupons, tokens, payment point (in-store kiosk), etc.

For brevity, this article provides a quick overview of the patent activities in the field of digital wallet communication technology. In general, digital wallet communication technology should be short ranged due to the proximity of the physical entity of the digital wallet and a payment point, low power consumption, and secure.  Digital wallet communication technologies that can be employed include:

 

Figure 1: Digital Wallet Communication Technology.

Some of the questions this article intended to answer include what is the patent filing trend? Which particular communication technology dominates? Who are the major players? And which jurisdictions see the most filing?

What is the Patent Filing Trend?

Figure 2: Filing Trend across Jurisdictions.

Which Technology is the Most Popular?

Figure 3: Technology Distribution based on Patent Filing.

Digital wallet communication technology distribution based on patent filing is presented in Figure 3.  As seen in Figure 3, RFID (radio frequency identification) and NFC (near field communication) are the most popular digital wallet communication technology in terms of patent filings.  Also, the analysis reveals that Bluetooth, SIM transactions, SMS, WAP and QR/Barcode-based digital wallet communication technology are also subject to significant patent activity.

Who are the Major Players?

Figure 4: Leading Assignees – Filing Trend.

The leading assignees of the digital wallet communication technology related patents and applications are presented in Figure 4.  As seen in Figure 4, Nokia Corp., is an early player in the field with significant patent activity dating back to 1999, however, Nokia’s patent activity in this field has slowed down recently.  Sony Corp. is also a major player with a first burst of patent activity dating back to 2000 and a second burst of activity in 2008.  Other early assignee includes Ericson, IBM, JP Morgan, and Gemalto. There are several late entrant assignees that started their patent activity around 2008, for example, ZTE Corp. experienced a surge in patent activity in 2008.  Other assignees that started major filing activities around that time frame include First Data Corp., Boku Inc., and Toshiba Corp.
Which Jurisdiction Experiences the Most Patent Activity?
Figure 5: Geographical Distribution.

Figure 5 shows the jurisdiction distribution of the digital wallet communication technology patent activity.  As seen in Figure 5, Asia (China, Japan, Korea, and Taiwan) experienced the most amount of patent activity followed by the U.S., and Europe.  Not surprisingly, digital wallet technology is more widely accepted and implemented in Asia, while the technology is gaining popularity in the U.S. and Europe.
Digital wallet technology seeks to lighten our pockets and make physical fund transactions easier.  This article serves as a primer of the patent landscape of digital wallet technology, for more in-depth analysis and the complete patent landscape report, please contact us.

Design Protection in India

Following the article on US Design Patents in our October 2011 newsletter, this month we discuss the  protection of industrial designs in India. Designs are protected under the Designs Act 2000, along with the associated Design Rules 2001 and (Amendment) Rules 2008. Information on filing design applications in India can be obtained from the Manual of Designs Practice and Procedure of the Patent Office.

DEFINITION

In India, a design is defined as “the features of shape, configuration, pattern, ornament or composition of lines or colors applied to any article whether two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device, and does not include any trade mark as defined in clause (v) of sub-section (1) of section 2 of the Trade and Merchandise Marks Act, 1958 or property mark as defined in section 479 of the Indian Penal Code or any artistic work as defined in clause (c) of section 2 of the Copyright Act, 1957.” A design is registered by filing one or more views of the design along with a statement of novelty claimed.

Differences with Respect to US Filing

Unlike in the United States, designs are subject to “registration” in India, i.e. a certificate of registration issued. However, apart from the difference in terminology, India, as signatory to the intellectual property treaty obligations under WIPO, has a strong legal framework for protecting industrial designs. Other differences include a 15 year term of validity (Sec 11 of the Designs Act) (10 year initial grant + 5-year renewal), while in the US system design patents are valid for 14 years. The term “copyright” is used in the Indian statute to mean the exclusive right to apply a design to any article in the class in which the design is registered.

Trends in Design Applications Filing

Trends in design application filings in India between 2004-2010 are shown in Fig. 1 and 2 based on data released in the Annual Reports of the Office of CGPDTM 2009-10.

Fig. 1: Yearwise trend of design applications filed in India over the past few years.

As seen in Fig. 1, there is a general upward trend in applications filed and registered, except for a marginal decrease in 2009-10.

Fig. 2: Design filing trends by origin of filing as domestic/foreign.

The number of design applications filed and registered by Indian applicants (Fig. 2) leads the foreign origin applications by 40-60%, which is contrary to the trend in utility patent applications, where over 80% of the filings in 2009-2010 (p.18) were filed by foreign nationals. These numbers show that design filings have perhaps been underutilized compared to utility patents, particularly in comparison with China where design filings exceed utility filings (WIPO, table A.4). With the growing interest in the Indian market, there is ample scope for growth of design filings in India.  As of 2010 some of the leading Indian design patent assignees were Crompton Greaves Ltd, MA Design India Pvt Ltd., Junaga Jewellery Pvt. Ltd., Tata Automobiles Ltd., Philips Electronics India Ltd., Anchor Electricals Pvt. Ltd., Tata Motors Ltd., Bajaj Auto Ltd., Eicher Goodearth Pvt. Ltd., Godrej & Boyce Mfg.Co. Ltd., Gold Medal Electricals Pvt. Ltd., Larsen & Toubro Ltd.

LITIGATION INVOLVING DESIGNS

In India, design litigation decisions are available through the official Govt. of India Website as well as through http://indiankanoon.org/. A compilation of Controller’s and court decisions is also given in Appendix 1 of the Manual of Designs Practice and Procedure.  The current position in interpreting design claims is based on the decision in GlaxoSmithkline Consumer Healthcare GmbH v Anchor Health & Beauty care Private Limited, PTC 2004 (29) 72. Here, the Delhi High Court applied the “ordinary observer test” although the language used was slightly different. It was held that novelty should be capable of making a design different and distinctive “at first sight of the consumer”.

Other interesting cases include Reckitt Benckiser (India) Ltd (Plaintiff) v. Wyeth Ltd (Defendant). Reckitt appealed the dismissal of its petition for an injunction against Wyeth to a Division Bench of the Delhi High Court. The question on appeal was whether prior registration in foreign jurisdictions could be used as “prior disclosure” under Section 4(b) of the Designs Act, 2000 to cancel a design registration and thus be used as a defence in an infringement lawsuit. The Division Bench (DB) reversed the holding in favor of the appellants Reckitt, upholding the validity of their design registration. The DB ruled that a design remains new or original even if it is published in India or abroad within the six month period following the filing of an application for registration of such design in the specified country so long as an application for registration of the design is filed in India within this six-month period.

REQUIREMENTS FOR DESIGN REGISTRATION

Design registrations must fulfill the following conditions:

  • The design must be new or original – and should not have been disclosed to the public anywhere in any form before the filing date
  • Must be distinguishable from known designs
  • Must be applicable on an article such as paper and appeal to the eye
  • Shall contain no scandalous or obscene matter
  • Is not merely a mechanical contrivance
  • Shall not be contrary to public order or morality

The novelty of the design should reside in the article taken as a whole instead of highlighting or pin-pointing any portion of the representation as novel. In addition to a statement of novelty, the Indian Patent Office requires disclaimers regarding the words, letters, numbers or trademarks present on the representation sheet(s), and with respect to any mechanical features, principle of action or operation of the article should be endorsed in all the representation sheets.

APPLICATION PROCEDURE

Applications should be duly filed using the prescribed form (Form-1) along with the prescribed fees, stating name in full, address, nationality, name of the article, class number, and address for service in India. The application shall also be signed either by the applicant or by his authorized agent.

Power of authority in Form 21 must accompany the application, if filed through an agent. Priority documents shall be filed along with the application in case of conventional application claimed under Section 44 of the Designs Act 2000. Currently the filing fee is Rs.1000 (about $20) per application.

An application for registration of a design under Section 5(2), 3(3), or 3(4) shall be addressed to the Controller of Designs, The Patent Office, CP-2, Sector-V, Salt Lake, Kolkata- 700091. (E-mail:controllerdesign.ipo (at) nic.in). Alternatively, the application can be filed with any of the other three Patent Offices at Delhi, Mumbai or Chennai. However, the examination and office actions are handled by the Kolkata office.

Design Classification System

India has adopted a new classification that conforms to the Locarno Classification of industrial designs.

Types of Design Applications

Two types of design applications are filed, a) ordinary applications that do not claim priority under section 5 or 44, and b) reciprocity applications. A reciprocity application claims priority to an application filed previously in a convention country. Such an application shall be filed in India within six months from the date of filing in a convention country, which is not extensible.

DESIGN PROSECUTION

The flow chart in Fig. 3 explains the following steps involved in design registration:

  1. The application for registration of design is filed complying with the requirements stated earlier
  2. The filed application is examined by the Examiner of Designs to check whether the applicationand all the documents satisfy the formal requirements and whether such design as applied toan article is registrable as per section 5(1) and under the provisions of the Designs Act 2000and Design (Amendment) Rules 2008. After thorough formality check if the application is  deficient in any aspect, the Examiner reports the deficiency to the Controller, who communicates  the statement of objections to the applicant
  3. The applicant should comply with rectification of the deficiencies within three months from thedate of communication of the objections failing which the application shall be treated aswithdrawn. The application will be taken up for substantive examination only after compliance ofthe objections to judge whether the design under consideration is a “design” under the Act;new or original; prejudicial to public order or morality and prejudicial to the security of India
  4. After substantive examination a statement of objections (if any) is sent to the applicant. If theapplicant wishes to contest the objection(s) issued by the examiner, he may respond to theobjections clearly stating the reasons. Then the Controller shall give a hearing to decide thecase. In case of any decision adverse to the applicant, the Controller shall issue a speakingorder
  5. Once the application is accepted after addressing the objections or after hearing the notice ofappeal from the court the controller issues notification in the Patent Office Journal as shown in  Fig. 4, after which the certificate of registration is issued.

Fig. 3:  Design registration process in India

Fig. 4: A typical notification of design registration in the Patent Office Journal

Effect of Indian Design Registration.

  1. When a design is registered, the proprietor of the registered design has copyright in the design for a period of ten years from the date of registration. It can be extended for another five years from the expiration of the original period of ten years by applying in the prescribed manner, i.e. by filing a renewal of registration in Form 3
  2. Use of registered design except through license or written consent of the registered proprietor is illegal by any person during the validity of registration
  3. A registered proprietor can sue for recovery of damages for any contravention of the design rights through copying of the registered design
  4. A registered proprietor can effect assignments and transmissions of the registered design and the details of the same should be entered in the Register of Designs at the Patent Office, Kolkata
  5. The person entitled by assignment, transmission or other operation of law to copyright in the registered design can register his title by filing an application in the prescribed form with the Controller of Designs
  6. The exhibition of a design, or of any article to which a design is applied, will not prevent the design from being registered or invalidate the registration, provided the exhibitor gives prior notice to the Controller of Designs in the prescribed manner. Such application for registration is to be made within six months from the date of first exhibiting the design or article or publishing a description of the design
  7. The provisions of the Patents Act 1970 with regard to certificates of validity of a patent and to the remedial action in case of groundless threats of action against infringement apply in the same manner in case of registered designs as in the case of patents
CONCLUSION

In India, design registrations are easier to obtain than utility patents. Average prosecution time is less than a year, compared to 5-7 years for a utility patent. Design registrations provide rights that can be enforced through the Indian legal system. There is therefore ample opportunity for businesses to protect their interests through design registrations at the Indian Patent Office. Maxval is well positioned to assist clients with preparing the required design illustrations, as well as in filing and prosecuting design applications in India, through our offices located at Coimbatore and Chennai.

Categories: Design Patent, India

DESIGN PROTECTION IN INDIA

DESIGN PROTECTION IN INDIA

Following the article on US Design Patents in our October 2011 newsletter, this month we discuss the  protection of industrial designs in India. Designs are protected under the Designs Act 2000, along with the associated Design Rules 2001 and (Amendment) Rules 2008. Information on filing design applications in India can be obtained from the Manual of Designs Practice and Procedure of the Patent Office.

DEFINITION

In India, a design is defined as “the features of shape, configuration, pattern, ornament or composition of lines or colors applied to any article whether two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device, and does not include any trade mark as defined in clause (v) of sub-section (1) of section 2 of the Trade and Merchandise Marks Act, 1958 or property mark as defined in section 479 of the Indian Penal Code or any artistic work as defined in clause (c) of section 2 of the Copyright Act, 1957.” A design is registered by filing one or more views of the design along with a statement of novelty claimed.

Differences with Respect to US Filing

Unlike in the United States, designs are subject to “registration” in India, i.e. a certificate of registration issued. However, apart from the difference in terminology, India, as signatory to the intellectual property treaty obligations under WIPO, has a strong legal framework for protecting industrial designs. Other differences include a 15 year term of validity (Sec 11 of the Designs Act) (10 year initial grant + 5-year renewal), while in the US system design patents are valid for 14 years. The term “copyright” is used in the Indian statute to mean the exclusive right to apply a design to any article in the class in which the design is registered.

Trends in Design Applications Filing

Trends in design application filings in India between 2004-2010 are shown in Fig. 1 and 2 based on data released in the Annual Reports of the Office of CGPDTM 2009-10.

Fig. 1: Yearwise trend of design applications filed in India over the past few years

As seen in Fig. 1, there is a general upward trend in applications filed and registered, except for a marginal decrease in 2009-10.

Fig. 2: Design filing trends by origin of filing as domestic/foreign

The number of design applications filed and registered by Indian applicants (Fig. 2) leads the foreign origin applications by 40-60%, which is contrary to the trend in utility patent applications, where over 80% of the filings in 2009-2010 (p.18) were filed by foreign nationals. These numbers show that design filings have perhaps been underutilized compared to utility patents, particularly in comparison with China where design filings exceed utility filings (WIPO, table A.4). With the growing interest in the Indian market, there is ample scope for growth of design filings in India.  As of 2010 some of the leading Indian design patent assignees were Crompton Greaves Ltd, MA Design India Pvt Ltd., Junaga Jewellery Pvt. Ltd., Tata Automobiles Ltd., Philips Electronics India Ltd., Anchor Electricals Pvt. Ltd., Tata Motors Ltd., Bajaj Auto Ltd., Eicher Goodearth Pvt. Ltd., Godrej & Boyce Mfg.Co. Ltd., Gold Medal Electricals Pvt. Ltd., Larsen & Toubro Ltd.

LITIGATION INVOLVING DESIGNS

In India, design litigation decisions are available through the official Govt. of India Website as well as through http://indiankanoon.org/. A compilation of Controller’s and court decisions is also given in Appendix 1 of the Manual of Designs Practice and Procedure.  The current position in interpreting design claims is based on the decision in GlaxoSmithkline Consumer Healthcare GmbH v Anchor Health & Beauty care Private Limited, PTC 2004 (29) 72. Here, the Delhi High Court applied the “ordinary observer test” although the language used was slightly different. It was held that novelty should be capable of making a design different and distinctive “at first sight of the consumer”.

Other interesting cases include Reckitt Benckiser (India) Ltd (Plaintiff) v. Wyeth Ltd (Defendant).  Reckitt appealed the dismissal of its petition for an injunction against Wyeth to a Division Bench of the Delhi High Court. The question on appeal was whether prior registration in foreign jurisdictions could be used as “prior disclosure” under Section 4(b) of the Designs Act, 2000 to cancel a design registration and thus be used as a defence in an infringement lawsuit. The Division Bench (DB) reversed the holding in favor of the appellants Reckitt, upholding the validity of their design registration. The DB ruled that a design remains new or original even if it is published in India or abroad within the six month period following the filing of an application for registration of such design in the specified country so long as an application for registration of the design is filed in India within this six-month period.

REQUIREMENTS FOR DESIGN REGISTRATION

Design registrations must fulfill the following conditions:

  • The design must be new or original – and should not have been disclosed to the public anywhere in any form before the filing date
  • Must be distinguishable from known designs
  • Must be applicable on an article such as paper and appeal to the eye
  • Shall contain no scandalous or obscene matter
  • Is not merely a mechanical contrivance
  • Shall not be contrary to public order or morality

The novelty of the design should reside in the article taken as a whole instead of highlighting or pin-pointing any portion of the representation as novel. In addition to a statement of novelty, the Indian Patent Office requires disclaimers regarding the words, letters, numbers or trademarks present on the representation sheet(s), and with respect to any mechanical features, principle of action or operation of the article should be endorsed in all the representation sheets.

APPLICATION PROCEDURE

Applications should be duly filed using the prescribed form (Form-1) along with the prescribed fees, stating name in full, address, nationality, name of the article, class number, and address for service in India. The application shall also be signed either by the applicant or by his authorized agent.

Power of authority in Form 21 must accompany the application, if filed through an agent. Priority documents shall be filed along with the application in case of conventional application claimed under Section 44 of the Designs Act 2000. Currently the filing fee is Rs.1000 (about $20) per application.

An application for registration of a design under Section 5(2), 3(3), or 3(4) shall be addressed to the Controller of Designs, The Patent Office, CP-2, Sector-V, Salt Lake, Kolkata- 700091. (E-mail: controllerdesign.ipo (at) nic.in). Alternatively, the application can be filed with any of the other three Patent Offices at Delhi, Mumbai or Chennai. However, the examination and office actions are handled by the Kolkata office.

Design Classification System

India has adopted a new classification that conforms to the Locarno Classification of industrial designs.

Types of Design Applications

Two types of design applications are filed, a) ordinary applications that do not claim priority under section 5 or 44, and b) reciprocity applications. A reciprocity application claims priority to an application filed previously in a convention country. Such an application shall be filed in India within six months from the date of filing in a convention country, which is not extensible.

DESIGN PROSECUTION

The flow chart in Fig. 3 explains the following steps involved in design registration:

  1. The application for registration of design is filed complying with the requirements stated earlier
  2. The filed application is examined by the Examiner of Designs to check whether the applicationand all the documents satisfy the formal requirements and whether such design as applied toan article is registrable as per section 5(1) and under the provisions of the Designs Act 2000and Design (Amendment) Rules 2008. After thorough formality check if the application is  deficient in any aspect, the Examiner reports the deficiency to the Controller, who communicates  the statement of objections to the applicant
  3. The applicant should comply with rectification of the deficiencies within three months from thedate of communication of the objections failing which the application shall be treated aswithdrawn. The application will be taken up for substantive examination only after compliance ofthe objections to judge whether the design under consideration is a “design” under the Act;new or original; prejudicial to public order or morality and prejudicial to the security of India
  4. After substantive examination a statement of objections (if any) is sent to the applicant. If theapplicant wishes to contest the objection(s) issued by the examiner, he may respond to theobjections clearly stating the reasons. Then the Controller shall give a hearing to decide thecase. In case of any decision adverse to the applicant, the Controller shall issue a speakingorder
  5. Once the application is accepted after addressing the objections or after hearing the notice ofappeal from the court the controller issues notification in the Patent Office Journal as shown in  Fig. 4, after which the certificate of registration is issued

Fig. 3:  Design registration process in India

Fig. 4: A typical notification of design registration in the Patent Office Journal

Effect of Indian Design Registration

  1. When a design is registered, the proprietor of the registered design has copyright in the design for a period of ten years from the date of registration. It can be extended for another five years from the expiration of the original period of ten years by applying in the prescribed manner, i.e. by filing a renewal of registration in Form 3
  2. Use of registered design except through license or written consent of the registered proprietor is illegal by any person during the validity of registration
  3. A registered proprietor can sue for recovery of damages for any contravention of the design rights through copying of the registered design
  4. A registered proprietor can effect assignments and transmissions of the registered design and the details of the same should be entered in the Register of Designs at the Patent Office, Kolkata
  5. The person entitled by assignment, transmission or other operation of law to copyright in the registered design can register his title by filing an application in the prescribed form with the Controller of Designs
  6. The exhibition of a design, or of any article to which a design is applied, will not prevent the design from being registered or invalidate the registration, provided the exhibitor gives prior notice to the Controller of Designs in the prescribed manner. Such application for registration is to be made within six months from the date of first exhibiting the design or article or publishing a description of the design
  7. The provisions of the Patents Act 1970 with regard to certificates of validity of a patent and to the remedial action in case of groundless threats of action against infringement apply in the same manner in case of registered designs as in the case of patents

CONCLUSION

In India, design registrations are easier to obtain than utility patents. Average prosecution time is less than a year, compared to 5-7 years for a utility patent. Design registrations provide rights that can be enforced through the Indian legal system. There is therefore ample opportunity for businesses to protect their interests through design registrations at the Indian Patent Office. Maxval is well positioned to assist clients with preparing the required design illustrations, as well as in filing and prosecuting design applications in India, through our offices located at Coimbatore and Chennai.

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