Another look at USPTO Allowance Rate

by Dennis Crouch

Here is a different look at the USPTO grant rate that looks at two numbers for each quarterly period: how many patents issued, and how many applications were abandoned.  These can be added together as a total number of applications disposed-of during the period.  The percentage reported in the chart below is the percent of patents out of that total disposal.

These numbers roughly conform to the work that examiners do on a quarterly basis, but I did not count allowances/rejections, but instead looked only at whether a patent actually issued or actually abandoned (typically by failing to respond to an office action).   You’ll note an upward trend since 2010 with allowance rate roughly matching the highs seen 20 years ago.

One caveat on this data. I only used published applications because those records are open.  Unpublished applications tend to have a somewhat lower allowance rate.


MedImmune Licensee Standing Does not Apply to Portfolio License

by Dennis Crouch

The Federal Circuit’s new decision in Apple Inc. v. Qualcomm Inc. (Fed. Cir. 2021) offers an interesting standing puzzle.

After some heated litigation, Apple licensed 20,000+ Qualcomm patents as part of a six-year covenant-not-to-sue which resulted in the litigation being dismissed with prejudice.  Meanwhile, the parallel inter partes reexaminations (IPRs) moved forward with regard to two particular Qualcom patents within the package of 20,000+.

Although the PTAB granted Apple’s IPR petitions, the Board eventually sided with Qualcomm — holding that Apple had not proven that the claims were invalid.  Apple then appealed to the Federal Circuit.  The PTAB does not worry about Article III standing — because the PTAB is not an Article III court.  However, standing comes into play once the case moves from the administrative agency into the appellate court.

In MedImmune, Inc. v. Genentech, Inc., 529 U.S. 118 (2007), the Supreme Court  held that a patent licensee has standing to challenge a patent’s validity even without stopping the royalty payments.  Here, Apple argued that it likewise has standing. The problem, according to the court, is that cancelling of the two Qualcomm patents would not actually impact Apple’s obligations under the license.  This contrasts with MedImmune where an invalidity finding would dramatically impact the royalty owed.

In Apple’s view, a licensee’s obligations to pay royalties for a license to 100,000 patents would provide standing to challenge the validity of any single licensed patent, even if the validity of any one patent would not affect the licensee’s payment obligations. We do not read MedImmune so broadly.

Slip Op.  The basic outcome here is that a broad portfolio license does not, on its own, create MedImmune-style standing for the licensee to sue to challenge the patent rights.

The court also rejected Apple’s argument that it has an interest in invalidating the patents because it might be sued again once the patent expires.  On appeal, the Federal Circuit found that argument too speculative and unsupported by any evidence.

Apple offers the sparsest of declarations in  support of standing, which are devoid of any of the specificity necessary to establish an injury in fact. Without more, we are left to speculate about what activity Apple may engage in after the expiration of the license agreement that would give rise to a potential suit from Qualcomm. This is insufficient to show injury in fact. . . . What products and product features Apple may be selling at the expiration of the license agreement years from now are not the kind of undisputed facts we may take judicial notice of because they may be reasonably questioned. . . . We are not fortune-tellers. Accordingly, we must decline Apple’s invitation to take judicial notice.

Slip Op.

In the end, I expect that Apple could have established standing, but chose instead to withhold details from the license and it upcoming product line that could have changed the outcome.


Google v. Oracle and the Mixed Question of Law and Fact

by Dennis Crouch

In Google LLC v. Oracle Am., Inc., 593 U. S. ____  (2021), the Supreme Court spends a few pages walking through procedural aspects of the fair use defense.

Like many patent law doctrines, fair use is a mixed question of law and fact. The defendant’s use of the asserted copyrighted work and its impact on the plaintiff are typically factual issues that must be proven by evidence as weighed by the factfinder (often a jury). These are questions such as “how much of the copyrighted work was copied” and “whether there was harm to the actual or potential markets for the copyrighted work.” Google at 19.  However, the questions of law emerge when we are categorizing the importance of the factual findings as well as asking the ultimate question of whether the use was a fair use.

The fact-law divide comes up in various ways: Is there a Constitutional right to a jury trial on the issue; lacking that may a jury still decide the issue; does proof require evidence (as defined by the Federal Rules of Evidence) proven to a particular standard; or instead do we simply look for the ‘right’ answer; on appeal, what is the standard of review — deference or not?  Fact/Law also comes up in patent prosecution, but examiners are not charged with making the distinction and the rules of evidence don’t apply.

At the trial court this leads to the very practical question of how easily a judge can dispose of the issue pre-trial.  Questions of law are often easy to determine pre-trial; some mixed questions are also relatively easy to determine pre-trial if there is no right to a jury determination; mixed questions involving substantial factual disputes and a right to a jury trial are hard.  In patent cases, courts are regularly making pre-trial determinations on claim construction and eligibility, both of which are ultimately questions of law but that can involve underlying factual determinations.  Obviousness is another mixed question.  Although  the ultimate determination of obviousness is a question of law, it is treated differently from claim construction and eligibility.  Rather than being decided by a judge, obviousness is typically decided by a jury as fact-finder.  The difference is that obviousness typically requires detailed factual determinations that are hard to separate from the ultimate conclusion of obviousness and that are subject to a Constitutional right to a jury trial.

In deciding an issue, a district court will typically separate its analysis between findings-of-fact and conclusions-of-law. This separation is expressly required in FRCP 52(a)(1) when a judge determines the facts without a jury.  District courts also decide other substantive questions pre- and post-trial.  However, those determinations are typically purely questions-of-law.  (Failure to state a claim; Summary Judgment; Judgment as a Matter of Law).

Back to Google: Oracle sued Google for copyright infringement, and Google raised a defense of Fair Use.  The district court gave the question of fair use to the jury who sided with Google.  On appeal, though the Federal Circuit reversed and found no fair use.  Although the jury had decided the issue, the Federal Circuit gave no deference to the jury’s legal conclusions.  In its subsequent analysis, the Supreme Court agreed with the Federal Circuit’s  procedural approach of de novo review of the legal conclusions but ultimately disagreed on the substance. Rather, the Supreme Court concluded that Google’s use was a fair use as a matter of law.

One typical difficulty in the law-fact divide is that the questions are often not easily separable. In Markman, the Supreme Court called claim construction a “mongrel practice” because it is a mixed question that is hard to separate-out.  Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996).   In Google, the court determined that the big questions of fair use should be treated as questions-of-law because they “primarily involves legal work.”

The Google court went on to cite Markman in concluding that there is no 7th Amendment Right to a Jury Trial on the doctrine of fair use. “As far as contemporary fair use is concerned, we have described the doctrine as an ‘equitable,’ not a ‘legal,’ doctrine.” Google at 20.  See U.S. Const. 7th Amd. (“In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.”).

The Court’s general approach to mixed questions of law is explained in some detail within its 2018 bankruptcy decision of U. S. Bank N. A. v. Village at Lakeridge, LLC, 583 U. S. ___, 138 S. Ct. 960 (2018). In that case, the mixed-question was whether a creditor qualified as a “non-statutory insider.”  In U.S. Bank, the court explained that “mixed questions are not all alike.”  Some mixed questions are more like questions of law requiring an “amplifying or elaborating on a broad legal standard.”  Those should be treated as questions of law.  Other mixed questions require analysis of narrow facts “that utterly resist generalization.”  Those should be treated as questions of fact.  “In short, the standard of review for a mixed question all depends—on whether answering it entails primarily legal or factual work.”

For the fair use analysis in Google, the court followed the U.S. Bank standard and determined that the fair use questions at issue in the case were primarily legal and thus should be reviewed de novo on appeal.

Bringing all this back to patent law, I don’t see anything in this analysis to disturb our current approaches to obviousness, claim construction and eligibility.  But, both Google and U.S. Bank are clear that they are focusing on the particular issues in the case at hand.  It may well be that the mixed question analysis will come out differently on a different set of facts.

The Next Chief Judge: Judge Moore

Chief Judge Prost took over as Chief at the end of May 2014 just after Judge Rader stepped-down from the position.  The position lasts for seven years and that date is approaching in May 2021. In addition, the statute prohibits a judge from being Chief Judge once they turn 70 years old.  Judge Prost is also turning 70 toward the end of May 2021.  28 U.S.C. 45. Thus, we’ll have a new Chief Judge within the next 7 weeks or so.

The next chief is defined by statute:

(1) The chief judge of the circuit shall be the circuit judge in regular active service who is senior in commission of those judges who—

(A) are sixty-four years of age or under;

(B) have served for one year or more as a circuit judge; and

(C) have not served previously as chief judge.

Judge Moore is the most senior active judge that satisfies the three statutory requirements and thus is the chief-apparent.  Judges Newman, Lourie, and Dyk are the three most-senior active judges.  However, they are all over the age of 64 and thus do not qualify to become the next Chief Judge.  Judge O’Malley is next in line following Judge Moore, but turns 65 in November 2021. Assuming that Judge Moore takes to the role and remains Chief Judge for her full 7 year term, the next Judge on deck will be Judge Chen in 2028. Since all of the current Judges are >50 years old, none would be eligible for the subsequent go-round in 14 years.

* I also apologize for openly discussing ages of these humans in such an uncouth way, but it is required by the statute.

Studying Nonobviousness

By Jason Rantanen

There are lots of quantitative studies of patent litigation appellate court decisions, going all the way back to P.J. Federico’s 1956 article Adjudicated Patents in the Journal of the Patent and Trademark Office Society.  One of the big limitations of these studies, though, is that there hasn’t really been any work done to examine how replicable their observations are – even for variables as seemingly simple as whether the court affirmed or reversed on a particular issue, or reached a particular outcome, such as whether a patent’s claims was obvious.  New studies compare their aggregate results to previous studies, but not the actual data themselves–even when studying the same set of cases.

In an article forthcoming in the Hastings Law Journal, Abigail Matthews, Lindsay Kriz and I set out to do exactly that: to examine the amount of agreement between two studies on nonobviousness around the time of KSR v. Teleflex, one that I did that was published in 2013 and one that was recently published by Judge Ryan Holte and Prof. Ted Sichelman.

Our reliability assessment reveals a complex picture.  Somewhat reassuringly, the results from the two studies are largely consistent for decisions from the same time period.  Surprisingly, however, fewer than 2/3rds of the decisions analyzed in both studies were the same—even when limited to the identical time period and using the same criteria.  Within that set of cases, however, the core data coding was largely identical, with a few notable exceptions.  Specifically, we find differences in the coding for procedural postures and in some coding related to judicial reasoning.

In addition, since the period covered by those two studies ended several years ago, we also updated the dataset through the end of 2019.  Here are some highlights from our findings:

  • The number of Federal Circuit decisions in appeals arising from the district courts that involved a § 103 issue peaked between 2010 and 2015, and in recent years has declined to half of that peak.
  • The percentage of Federal Circuit decisions with an outcome of “obvious” in appeals arising from the district courts remained high between 2006 and 2014, but since 2015 the number of “obvious” outcomes has fallen dramatically.
  • The Federal Circuit continues to affirm district courts on the issue of obviousness at a high rate (around 80% of the time since 2013), and—in contrast with the immediate post-KSR period studied Holte & Sichelman (2019) and Rantanen (2013)—since 2013, affirmances have been equally high for district court outcomes of “nonobvious.”
  • The number of grants of summary judgment involving § 103 that were reviewed by the Federal Circuit in its decisions has fallen substantially in recent years. Nearly all § 103 decisions arising from the district court that were reviewed by the Federal Circuit between 2016 and 2019 involved a bench or jury trial.

In the paper we talk about some possible explanations for this decline, including two obvious causes: the rise of inter partes review and patent eligible subject matter issues.  You can read the full preprint on SSRN here:  I’m hoping to have the data posted within the next few weeks.

Google v. Oracle: Use of Oracle’s API is a Fair Use

Google LLC v. Oracle America, Inc. (Supreme Court 2021)

In a 6-2 decision authored by Justice Breyer, the Supreme Court has held that Google’s copying of the JAVA API naming convention was a fair use as a matter of law.  The court did not decide the question of whether the API was copyrightable in the first place.

In his dissent, Justice Thomas (joined by Justice Alito) argues that the majority opinion “disregards half the relevant statutory text and distorts its fair-use analysis. . . . Oracle’s code at issue here is copyrightable, and Google’s use of that copyrighted code was anything but fair.”

The key lines from the case for patent attorneys:

Majority: [U]nlike patents, which protect novel and useful ideas, copyrights protect “expression” but not the “ideas” that lie behind it.

Dissent: Computer code occupies a unique space in intellectual property. Copyright law generally protects works of authorship. Patent law generally protects inventions or discoveries. A library of code straddles these two categories. It is highly functional like an invention; yet as a writing, it is also a work of authorship. Faced with something that could fit in either space, Congress chose copyright, and it included declaring code in that protection.

= = =

The case involves the software interface or Application Program Interface (API) for Oracle’s Java programming language.   What we’re really talking about here are the names of the various functions that a programmer might memorize such as “Math.max(a,b)” which returns the greater of two inputs.  Java is divided up into “packages” of function calls such as max.

Java is a popular language with many millions of skilled programmers.  As Google developed its Android platform, it wanted to simplify the adoption process for app developers. As such, it chose a language that the programmers know – Java.  The one problem is that Oracle wanted a substantial royalty and so Google instead recreated the entire language, including the functionality of thousands of function-calls.

What did Google copy?: It copied the naming convention of the functions (Math.max(a,b)) and their organization.  This is thousands of function names organized into 37 Packages.  Oracle claimed copyright to these names and their organization.  The Federal Circuit agreed with Oracle that (1) the API is protectable under copyright and (2) that Google’s use was not a fair use.

In its fair use analysis, the court placed substantial weight on the fact that the value of Java’s API is based upon the fact that “those who do not hold copyrights, namely, computer programmers, invest of their own time and effort to learn the API’s system” rather than in the inherent creativity of the expression.  Thus, the “‘nature of the copyrighted work’ points in the direction of fair use.”  Although the Supreme Court found Google “precisely” copied the JAVA API, it still found the use transformative — because it was being used on a handheld rather than a laptop.  For substantiality, Google only copied 11,000 lines of code.  The court found that insubstantial since it was less than 1% of Java as a whole.  Finally, regarding market impact, the court found that Sun was unlikely to be able to compete in the Android marketplace and that the copying by Google created a lots more market opportunity for others.

Obviously, there is lots more to this opinion.  Read it via the link above.

USPTO Grant Rate 2021

by Dennis Crouch

The following chart provides one look at USPTO historic patent grant rate for patent applications filed over the past 20 years.  The chart groups together patent applications as of their filing-month and then simply reports the percentage patented, abandoned, and still-pending.  The red-line in the chat excludes the still pending applications and thus reports the grant rate of disposed-of applications.

A few notes.

  • There are many ways to calculate a patent grant rate.  This one is perhaps the simplest in that I simply looked at the current status of each published utility application – serial number by serial number.  I treated all utility applications equal, regardless of whether it was part of a larger patent family or whether it was subject to an RCE.
  • Beware of recent grant rate data:  In my model here, there are only two ways that a patent can escape from being still-pending: Either (1) the patent issues or (2) the applicant abandons the application.  And, the former (disposals-by-patenting) typically take less time than the latter (disposals-by-abandoning).  As the PTO begins examining a cohort of patent applications, it typically issues a number of first-action allowances, while most applicants hold on for at least a final rejection before abandoning. What all this means is that more-recent grant rate data can be skewed.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

The AIA Patents have Arrived

by Dennis Crouch

The America Invents Act of 2011 included a major reshuffling of what counts as “prior art” against a given patent. 35 U.S.C. § 102 was substantially rewritten with a new focus on an application’s effective filing date, and zero focus on whether a patent applicant was the “first to invent.”  The new law applies only to post-AIA patents.  The Act defines these as any patent that “contains or contained at any time” a patent claim “that has an effective filing date” on or after March 16, 2013. We are now in the midst of a major change-over.  Most in-force patents are still pre-AIA, but most newly issued patents are post-AIA.

The pretty chart below provide a sense of where we stand for newly issued patents.  For 2021, 90%+ of newly issued patents are post-AIA, meaning that their effective filing date was on or after the March 16, 2013 threshold.  Patents coming out of TC-1600 (Biotech + Organic Chemistry) are the most likely to still be pre-AIA (18% pre-AIA in 2021) while TC-2800 (Semiconductors, Electrical and Optical Systems and Components) is at the other end of the table (4% pre-AIA in 2021).

The data here comes from the USPTO data files, but is generated primarily from applicant input on the application data sheet.  So, there are likely some mistakes. Further we do not have clear case law interpreting the threshold timing in any detail.

Patent Term: We know that in the USPTO, the patent term lasts 20 years from the effective filing date (not counting US provisional PCT and foreign national stage filing).  However, the US also has a generous patent term adjustment (PTA) program that provides patentees with additional patent term in cases where patent prosecution took too long.  Thus, although the clock is seemingly running on these still-pending pre-AIA applications, I expect that many of them will find their terms substantially adjusted. [Thanks to a reader for catching my typo above. Priority claims to a PCT application do count into the 20 year patent term.]

Transitions: Andrei Iancu

by Dennis Crouch

Former USPTO Director Andrei Iancu has returned to private practice — back at his Southern California firm Irell & Manella. Iancu had been managing partner of the firm before being nominated by President Trump to lead the Patent Office.

Congratulations to Dir. Iancu on navigating the tricky political waters of Washington DC these past several years.  I hope that Iancu’s measured success during rather extreme times will encourage others to step-up as well.

Certificates of Correction 2021

by Dennis Crouch

For the most part, Certificates of Correction are boring, simple, and quite common. 35 U.S.C. § 254 & 255 provide for correction of minor mistakes by the PTO and applicant respectively.  PTO mistakes are fixed when a mistake is “clearly disclosed by the records of the Office.”  For applicant-mistakes, the correction is allowed for “clerical or typographical nature, or of minor character” made in good faith.  Larger mistakes should be corrected via Reissue.  Errors can also be corrected as part of a reexamination or AIA trial (such as inter partes review).  In most cases applicants prefer the certificate of correction route because the procedures and approval process tend to be much more patentee friendly.  And, the minor corrections are more likely to have retroactive effect against past infringers.

The PTO grants the vast majority of requests for correction.  The most common denials are based upon the patentee’s failure to submit the correct forms.

Chart showing certificates of correction per year

The chart above shows the number of certificates of correction issued by the USPTO each year with a forecast through the end of 2021.* The chart shows a fairly small downward trend over the past several years.  Although the trend above is fairly small, I believe that it will actually prove dramatic — with a ~50% reduction in the number of corrections issued moving forward.  We can see forecast with some more clarity in the chart below.

The next chart shows the percentage of patents that have been corrected (patents grouped according to the date they issued).  Since this data only goes through March 31, 2021, only a very small percentage of patents issued in 2021 have been corrected. There simply has not been enough time for the patents to issue and be corrected within this three month period.  On the other hand, the pre-2020 data is fairly accurate because  85%+ of corrections are typically issued within the first two-years of issuance.**

I wrote above that patentees would generally prefer to amend claims as part of a certificate of correction rather than within an AIA trial.  The correction process is simpler, there is no opposing party, and the PTO rarely demands much evidence.

In Honeywell Intl. Inc. v. Arkema Inc., 939 F.3d 1345 (Fed. Cir. 2019), the Federal Circuit chastised the PTAB for creating roadblocks against a patentee from seeking correction in the midst of an AIA Trial.  The court explained that “the Director has not delegated its Section 255 authority to the Board.”  Id.  After the court decision, Honeywell was permitted by the PGR Panel to file a petition for Certificate of Correction of the priority claims.  “Honeywell’s mistake was inadvertently, i.e., unintentionally, failing to include a claim to the priority of three other Honeywell applications.” The petition was filed in May 2020 and is still pending before the Petitions Office.

There are currently dozens of certificate of correction fights going on within AIA trials (IPRs and PGRs).  Basic questions in the cases: (1) When should the PTAB permit a certificate of correction to be filed; (2) Should the PTAB await the outcome of the correction petition before issuing a final written decision; (3) Will the correction be given retroactive effect?

In the recent decision in Election Sys. & Software, LLC v. Hart Intercivic, Inc., PATENT 10,445,966 B1, 2021 WL 409335, at *4 (Patent Tr. & App. Bd. Feb. 5, 2021), the Board permitted the patentee to seek a certificate of correction as follows:

 The method of claim 25, wherein the data set wherein includes a candidate’s name . . .

Here, the second “wherein” was clearly a typo and the petitions office agreed to the correction.  When the correction got back to the Board, the panel refused to take the correction into account — explaining that “shifting the scope of this proceeding to consider the corrected claims could impede the Board’s ability to meet its statutory deadlines. By declining to give effect to the correction, we keep the proceeding properly moored to the Petition that was the basis for instituting this trial.”  A final written decision is not yet issued in the case.

SIPCO, LLC v. Emerson Elec. Co., No. 2018-1364 (Fed. Cir. May 3, 2018) involves a situation where the Certificate of Correction issued after the PTAB decision cancelling the claims, but before the appeal was heard.  Rather than deciding the case, the Federal Circuit ordered the PTAB to address “what, if any, impact the certificate of correction has on its final written decision in this case.” Id.   On remand, the PTAB held that

the Certificate, which issued after the Final Decision and after Patent Owner filed an appeal to the Federal Circuit, has no impact on the Final Decision in this case because it was not in effect during the proceeding.

Emerson Elec. Co. v. Sipco, LLC, IPR2016-00984, 2020 WL 407144, at *8 (Patent Tr. & App. Bd. Jan. 24, 2020). The Federal Circuit then affirmed the case without opinion.  There were several reasons why the Federal Circuit may have affirmed and therefore we don’t know their thoughts on the issue.  It also is not clear whether the correct claims can now be asserted (even retroactively).

= = = = =

* The first chart includes all certificates of correction for utility patents. About 5% of patents are associated with two or more certificates of correction.  Those are included within the first chart. I excluded those figures from the second chart which shows the percentage of patents with at least one certificate of correction.

** The large bump of 2009 patents was associated with a retroactive change in patent term adjustment calculation.  A cumulative frequency chart is provided below using certificates of correction issued Jan 2014 through March 2021.


World Trade Organization (WTO) members, including the US, are discussing a TRIPS waiver for intellectual property rights associated with COVID vaccines and treatments.  The US has historically been opposed, but President Biden’s newly confirmed US Trade Representative Katherine Tai promised during confirmation to fully consider the issue.

I recognize the critical importance of ensuring widespread access to lifesaving vaccines, diagnostics, therapeutics, treatments, and other key products worldwide in order to counter the pandemic and enable global economic recovery. If confirmed, I commit to examining the TRIPS waiver proposal thoroughly to determine its efficacy in enhancing our global health security and saving lives.

[Tai Testimony – Questions for the Record:  KatherineTaiSenateFinanceCommitteeQFRs2.28.2021].

IPO recently provided its input on behalf of US patent owners — arguing that there is “no data to suggest that patents and other IP rights are hindering vaccine development or delivery.” [Joint-IP-Association-Letter-Regarding-TRIPS-Waiver-Proposal-March-30-2020]

Tiffany Cunningham: Nominee for the United States Court of Appeals for the Federal Circuit

Tiffany Cunningham: Nominee for the United States Court of Appeals for the Federal Circuit

Tiffany P. Cunningham has been a partner at Perkins Coie LLP in Chicago, Illinois since 2014. She is a member of the Patent Litigation practice and serves on the 17-member Executive Committee of the firm. Ms. Cunningham serves as trial and appellate counsel for large multinational companies, as well as small enterprises, and individuals in complex patent and trade secret disputes.

Ms. Cunningham is a registered patent attorney before the U.S. Patent and Trademark Office. From 2002 to 2014, she worked in the Chicago office of Kirkland & Ellis LLP as an associate until she was elevated to partner in 2007. Ms. Cunningham began her legal career as a law clerk to Judge Timothy B. Dyk on the U.S. Court of Appeals for the Federal Circuit from 2001 to 2002. Ms. Cunningham received her J.D. from Harvard Law School in 2001 and her S.B. from the Massachusetts Institute of Technology in 1998.


New PatentlyO Law Journal Article: Covid-19 Pandemic’s Impact on the U.S. Patent System Through November 2020

New PatentlyO Law Journal article by Nicholas Shine.  Mr. Shine is  a J.D. Candidate 2021, BSEE, is a 3L student at the University of Denver, Sturm College of Law. This essay was conducted as a directed research project under the supervision of Professor Bernard Chao.  – Jason

The Covid-19 pandemic has had and continues to have a major impact on people and countries across the globe.  The pandemic has not only affected people, it has affected many facets of life including the economy.  The United States government has passed two measures in an effort to address the issues Covid has introduced.  The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided $2.2 trillion in economic stimulus. Both the CARES Act and the United States Patent and Trademark Office (USPTO) have provided relief to stakeholders with regard to patents and applications.

This essay examines patent abandonment rates and application rates to determine if they can shed light on how the Covid-19 pandemic affected innovation.  While the results show temporary perturbations, the pandemic has had minimal effect on overall trends.  This may suggest that abandonment rates and application rates may be surprisingly resistant to economic downturns or that the measurements are simply not good proxies for innovation.  Part II of this paper describes the data available from the USPTO and the methods used to work with the data. Part III examines the data as well as offer theories about the results obtained from the data.

Disclosure statement: This essay was conducted as a directed research project under the supervision of Professor Bernard Chao.  Nick Shine has been employed part-time as a law clerk at Polsinelli’s Denver office.   He has no conflicts that he is aware of, and the study required no funds.

Read: Nicholas Shine, Covid-19 Pandemic’s Impact on the U.S. Patent System Through November 2020, 2021 PatentlyO Law Journal 27 (2021) (Shine.2021.COVID-19Impact)

Prior Patently-O Patent L.J. Articles:

  • Thomas F. Cotter, Is Global FRAND Litigation Spinning Out of Control, 2021 PatentlyO Law Journal 1 (2021) (Cotter.2021.GlobalFRANDLitigation)
  • Colleen V. Chien, Nicholas Halkowski, Maria He, and Rodney Swartz, Parsing the Impact of Alice and the PEG, 2020 Patently-O Law Journal 20 (2020) (Chien.2020.ImpactOfAlice)
  • Paul R. Michel and John T. Battaglia, eBay, the Right to Exclude, and the Two Classes of Patent Owners, 2020 Patently-O Law Journal 11 (2020) (Michel.2020.RightToExclude)
  • Thomas F. Cotter, Two Errors in the Ninth Circuit’s Qualcomm Opinion, 2020 Patently-O Patent Law Journal 1 (2020). (Cotter.2020.TwoErrors.pdf)
  • Jasper L. Tran & J. Sean Benevento, Alice at Five, 2019 PatentlyO L.J. 25 (2019) (Tran.2019.AliceatFive.pdf)
  • Bernard Chao, Implementing Apportionment, 2019 PatentlyO L.J. 20 (Chao.2019.ImplementingApportionment)
  • Jeremy C. Doerre, Is There Any Need to Resort to a § 101 Exception for Prior Art Ideas?, 2019 PatentlyO L.J. 10. (2019.Doerre.AnyNeed)
  • Colleen V. Chien, Piloting Applicant-Initiated 101 Deferral Through A Randomized Controlled Trial, 2019 Patently-O Patent Law Journal 1. (2019.Chien.DeferringPSM)
  • David A. Boundy, Agency Bad Guidance Practices at the Patent and Trademark Office: a Billion Dollar Problem, 2018 Patently-O Patent Law Journal 20. (Boundy.2018.BadGuidance)
  • Colleen Chien and Jiun-Ying Wu, Decoding Patentable Subject Matter, 2018 PatentlyO Patent Law Journal 1.
  • Paul M. Janicke, Patent Venue: Half Christmas Pie, And Half Crow, 2017 Patently-O Patent Law Journal 13. (Janicke.2017.ChristmasPie.pdf)
  • Paul M. Janicke, The Imminent Outpouring from the Eastern District of Texas, 2017 Patently-O Patent Law Journal 1 (2017) (Janicke.2017.Venue)
  • Mark A. Lemley, Erik Oliver, Kent Richardson, James Yoon, & Michael Costa, Patent Purchases and Litigation Outcomes, 2016 Patently-O Patent Law Journal 15 (Lemley.2016.PatentMarket)
  • Bernard Chao and Amy Mapes, An Early Look at Mayo’s Impact on Personalized Medicine, 2016 Patently-O Patent Law Journal 10 (Chao.2016.PersonalizedMedicine)
  • James E. Daily, An Empirical Analysis of Some Proponents and Opponents of Patent Reform, 2016 Patently-O Patent Law Journal 1. (Daily.2016.Professors)
  • Tristan Gray–Le Coz and Charles Duan, Apply It to the USPTO: Review of the Implementation of Alice v. CLS Bank in Patent Examination, 2014 Patently-O Patent Law Journal 1. (GrayLeCozDuan)
  • Robert L. Stoll, Maintaining Post-Grant Review Estoppel in the America Invents Act: A Call for Legislative Restraint, 2012 Patently-O Patent Law Journal 1 (Stoll.2012.estoppel.pdf)
  • Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29.  (Morgan.2011.AIAAmbiguities)
  • Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Journal 12 (sarnoff.2011.derivation.pdf)
  • Bernard Chao, Not So Confidential: A Call for Restraint in Sealing Court Records, 2011 Patently-O Patent Patent Law Journal 6 (chao.sealedrecords.pdf)
  • Benjamin Levi and Rodney R. Sweetland, The Federal Trade Commission’s (FTC) Recommendations to the International Trade Commission (ITC):  Unsound, Unmeasured, and Unauthoritative, 2011 Patently-O Patent Law Journal 1 (levi.ftcunsound.pdf)
  • Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent Law Journal 111 (Collins.KingPharma.pdf)
  • Robert A. Matthews, Jr., When Multiple Plaintiffs/Relators Sue for the Same Act of Patent False Marking, 2010 Patently-O Patent Law Journal 95 (matthews.falsemarking.pdf)
  • Kristen Osenga, The Patent Office’s Fast Track Will Not Take Us in the Right Direction, 2010 Patently-O Patent L.J. 89 (Osenga.pdf)
  • Peter S. Menell,  The International Trade Commission’s Section 337 Authority, 2010 Patently-O Patent L.J. 79
  • Donald S. Chisum, Written Description of the Invention: Ariad (2010) and the Overlooked Invention Priority Principle, 2010 Patently‐O Patent L.J. 72
  • Kevin Collins, An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology, 2010 Patently-O Patent L.J. 24
  • Etan Chatlynne, Investigating Patent Law’s Presumption of Validity—An Empirical Analysis, 2010 Patently-O Patent L.J. 37
  • Michael Kasdan and Joseph Casino, Federal Courts Closely Scrutinizing and Slashing Patent Damage Awards, 2010 Patently-O Patent L.J. 24 (Kasdan.Casino.Damages)
  • Dennis Crouch, Broadening Federal Circuit Jurisprudence: Moving Beyond Federal Circuit Patent Cases, 2010 Patently-O Patent L.J. 19 (2010)
  • Edward Reines and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, Part II, 2010 Patently‐O Patent L.J. 7  (2010) (Reines.2010)
  • Gregory P. Landis & Loria B. Yeadon, Selecting the Next Nominee for the Federal Circuit: Patently Obvious to Consider Diversity, 2010 Patently-O Patent L.J. 1 (2010) (Nominee Diversity)
  • Paul Cole, Patentability of Computer Software As Such, 2008 Patently-O Patent L.J. 1. (Cole.pdf)
  • John F. Duffy, The Death of Google’s Patents, 2008 Patently O-Pat. L.J. ___ (googlepatents101.pdf)
  • Mark R. Patterson, Reestablishing the Doctrine of Patent Exhaustion, 2007 Patently-O Patent L.J. 38
  • Arti K. Rai, The GSK Case: An Administrative Perspective, 2007 Patently-O Patent L.J. 36
  • Joshua D. Sarnoff, BIO v. DC and the New Need to Eliminate Federal Patent Law Preemption of State and Local Price and Product Regulation, 2007 Patently-O Patent L.J. 30 (Download Sarnoff.BIO.pdf)
  • John F. Duffy, Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21. (Duffy.BPAI.pdf)
  • Joseph Casino and Michael Kasdan, In re Seagate Technology: Willfulness and Waiver, a Summary and a Proposal, 2007 Patently-O Patent L.J. 1 (Casino-Seagate)

An incredible invention (incredible = not credible).

In re Hu (Fed. Cir. 2021)

Huping Hu (PhD, JD) and his spouse Maoxin Wu (MD, PhD) have been working for many years to understand human consciousness and its relationship to quantum theory.  In a series of patent applications, the pair have disclosed and claimed various applications of quantum entanglement.

Pending claim 1 of their Application No. 11/944,631 lists three easy steps for taking advantage of quantum entanglement. The basic approach:

  1. Create quantum entanglements between an originating & a targeting substance (“by irradiating said substance with magnetic pulse, laser light or microwave, or letting said substance sit for at least thirty days”);
  2. Separate the substances;
  3. Heat/cool/alter the originating substance.

The result then is a “change in weight, temperature and/or pH value of said target substance.”  The figure above shows a schema “for non-locally influencing a biological system in vivo such as a human body by first applying said target substance into said system in vivo and then manipulating the originating substance quantum-entangled with said target substance. [Published Application: 20090114526A].  This application as well as two others are pending in the case:

  1. Application No. 11/944,631 (non-local effects via quantum entanglement);
  2. Application No. 13/449,739 (treatment device for humans emitting quantum-entangling photons or magnetic pulses);
  3. Application No. 13/492,830 (treatment with water-based target);
  4. Application No. 11/670,996 (similar)

The Patent Office rejected applications as inoperative and the Federal Circuit has affirmed.  Operability is not expressly required by the patent act, but is directly derived from the utility doctrine of 35 U.S.C. § 101 (“new and useful”).  In addition, an inoperative creation also lacks enablement — especially in situations like this where the claims are directed to a functional result and not just the machine assembly.

On appeal, Hu argued that the USPTO based its decision on speculation, skepticism and ignorance rather than evidence.  The USPTO presented no prior art or any other contrary evidence.

On appeal, though, the Federal Circuit found that the USPTO had presented a prima facie case by noting that the invention: “violates the first law of thermodynamics,” is “contrary to traditional understanding of chemistry,” and “violates the classical laws of physics” including conservation of mass.   The Board noted an “absence of any known scientific principles explaining how Appellant’s invention could possibly operate in this manner, the absence of any cogent explanation in Appellant’s Specification regarding the general principals [sic] or mechanisms causing this to occur, and the absence of any verifiable test data reasonably attributable to the purported result, the Examiner reasonably characterized Appellant’s invention as being of an incredible nature.” Although Hu presented 25 scientific articles, the Board failed to find any scientific basis supporting the particular claims in Hu’s applications.

The appellate panel explained its support for the conclusion:

The PTO, as the nation’s guardian of technologic invention, must be receptive to unusual concepts, for the core of invention is unobviousness. However, concepts that strain scientific principles are properly held to a heightened standard, typically measured by reproducibility of results. Here the Board was presented with an apparent departure from conventional scientific understanding, and the Board appropriately sustained the examiners’ requirements for experimental verification. The Board applied a reasonable and objective standard, and acted reasonably in sustaining the examiners’ requirements. Should further investigation bring peer recognition and verifiable results, the PTO and the scientific community would surely be interested.


Note here – the result of this decision is not barring patentability of this type of invention, but rather a requirement that the inventor provide a better showing that the invention actually works as claimed.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Pre-Litigation Investigation of Patent Validity

by Dennis Crouch

I previously wrote about the Federal Circuit’s decision in WPEM, LLC v. SOTI Inc., 2020-1483 (Fed. Cir. Dec. 9, 2020).  The case focuses on pre-filing investigation — the amount of investigation that a patentee must conduct before filing a patent infringement lawsuit.

Here, WPEM filed an infringement action against SOTI, but later dismissed the action after learning that the patent claims were very likely invalid.  The district court awarded attorney fees to the defendant based upon the fact that “WPEM conducted no pre-filing investigation into the validity and enforceability of the Asserted Patent.” WPEM, LLC v. SOTI Inc., 2020 WL 555545 (E.D. Tex. Feb. 4, 2020).  On appeal, WPEM argued that the law strongly presumes that a patent is valid and, as such, does not require any pre-filing investigation of patent validity.  The Federal Circuit did not disagree with this argument in principle, but found this particular case to be a special case because the accused product is also the prior art.  According to the Federal Circuit the fact that the accused product was on-sale before the patent’s priority date means that the dismissal also very-much about infringement.  The federal Circuit explained:

Instead, the court [implicitly] based its award of attorneys’ fees, in part, on the frivolous nature of WPEM’s infringement position . . . an issue that could have easily been foreseen with an adequate pre-suit investigation. . . . As the court reasoned, because the Accused Technology is prior art to the ’762 patent, “if WPEM prevailed on its assertion that the Accused Technology is covered by the Asserted Patent, it would have had the effect of invalidating, rather than infringing, the Asserted Patent.” Because it is undisputed that the Accused Technology is prior art to the ’762 patent, WPEM could not bring a successful infringement suit.

What the court wrote here makes sense at one level, but it also proves too much.  A patentee will never win an infringement lawsuit after admitting that the prior art anticipates the invention.  Still, I don’t believe that the court intended to conclude that pre-filing investigation requires an investigation of validity issues.

In its new petition for writ of certiorari, WPEM asks two questions:

1. Does a patent’s presumption of validity afforded by 35 U.S.C. §282 limit a district court’s discretion to find a case exceptional under 35 U.S.C. §285 when it is only later discovered the accused technology is prior art?

2. Given the clear and convincing evidence standard to invalidate a patent, does a district court have the discretion to find a case exceptional under 35 U.S.C. §285 based upon asserted but unproven grounds of invalidity and unenforceability?



The requirement for pre-filing investigation is substantially written-down in Rule 11 of the Federal Rules of Civil Procedure:

(b) Representations to the Court. By presenting to the court a pleading … an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

FRCP 11(b). Rule 11 has its own sanctions regime, but egregious violations of the requirements may also serve as a basis for fee shifting under the Patent Act as an “exceptional cases.”  In its decision, the Federal Circuit did not discuss Rule 11.

Intentional Over-billing of Clients Leads to 2-year Suspension

by David Hricik, Mercer Law School

A partner at a major firm had been suspended initially for six months for intentionally over-billing certain clients for 450 hours of work she and other lawyers had not performed.  (Apparently, one justice initially decides the penalty in a bar proceeding there.). Bar counsel then argued to the entire court that six months was insufficient, and the Massachusetts Supreme Court agreed.  In its opening paragraph, the court stated:

The single justice acknowledged the respondent’s “admittedly cavalier attitude toward client billing,” but concluded that “the large number of hours she reported in 2015 is not substantial evidence that all or even most of the 450 hours at issue in this case were fraudulently billed.” Our focus, however, is not on the quantum of excessive fees that were billed, but on the fundamental dishonesty inherent in the respondent’s client billings themselves. It is not the sheer number of unworked hours that establishes the misconduct but, rather, the dishonesty manifested by billing for them at all.

The case, In the Matter of Zankowski (Mass. March 25, 2021) is here.

Yes, it’s a state case. But, consistent with this, over the years I’ve heard various speeches by attorneys from the OED say that they’re forgiving of many things — mistakes happen, hindsight is often 20-20 — but intentional misconduct is not one of those things I’ve heard them mention. As the Massachusetts court wrote, billing for them at all is what indicates a serious violation. And, related to that, many state disciplinary rules, like the USPTO Rules, require certain members of firms to have in place policies to ensure compliance with the ethical rules, and so one lawyer’s misconduct could cause ripple effects.

Ford v. Montana: Supreme Court on the Scope of Personal Jurisdiction

Note – this is a civil procedure case that I’ve been following. Many lawyers will be interested, even if not directly related to intellectual property. Dennis Crouch

Ford Motor Co. v. Montana 8th Judicial District (Supreme Court 2021)

Markkaya Gullett was killed in a Ford Explorer crash near her home in Montana.  Gullett’s estate sued Ford on a product liability type claims.  Ford argued that the state lacks personal jurisdiction over the global auto company.  The Supreme Court has sided with Gullett’s estate — finding that the 14th Amendment does not prohibit this case from moving forward.

Over the past decade, the Supreme Court has tightened-up the 14th Amendment personal jurisdiction test both in terms of General Jurisdiction and Specific Jurisdiction.  Although the U.S. Constitution serves as the foundational basis for the large number of precedential cases, the text is quite short: “nor shall any State deprive any person of life, liberty, or property, without due process of law.”  The Constitutional requirements of personal jurisdiction are due process requirements.

General Jurisdiction: Ford has a longstanding permanent relationship with Montana, advertises heavily in the state, and receives hundreds-of-millions-of-dollars in revenue from in-state sales. Still, under Daimler AG v. Bauman, 571 U. S. 117 (2014), state courts will not have General Jurisdiction over the the company since it still isn’t “at home” in the state.

With Specific Jurisdiction, the Court’s recent decision in Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty., 582 U. S. ___ (2017) refocused attention on a required nexus between the the defendant’s contacts with the forum state and the cause of action.  The decision suggested to many that defendant’s connections should have a causal-link with the cause of action.  BMS also rejected a sliding-scale approach that would allow for fewer related minimum contacts in situations where the defendant has many ongoing unrelated contacts with the forum state.

Although Ford sells Explorers in Montana, the particular Ford Explorer here was not designed, manufactured, or sold in Montana. The vehicle ended-up in Montana after a series of re-sellings and relocations.  The plaintiff alleges that Ford designed, manufactured & sold a defective product (and failed to warn), but none of those actions – with respect to this particular vehicle – were directed to the state of Montana.  As such, Ford argued that it lacked minimum contacts with the state because the action did not “arise out of or relate to the defendant’s contacts.”

The Supreme Court rejected Ford’s causal-link requirement and put emphasis on the “or relates to” portion of the quote above.

None of our precedents has suggested that only a strict causal relationship between the defendant’s in-state activity and the litigation will do. As just noted, our most common formulation of the rule demands that the suit “arise out of or relate to the defendant’s contacts with the forum.” The first half of that standard asks about causation; but the back half, after the “or,” contemplates that some relationships will support jurisdiction without a causal showing.

Slip Op.  One thing interesting here is that the court suggested that its prior case in this area should construed “as though we [are] dealing with language of a statute.” Quoting Reiter (1979).  The “or” has meaning.

Now we have a line-drawing problem with what counts as “relating to,” and the majority opinion wrote that “real limits” can be discerned from precedent.

Those who have read BMS know that it was about sales of Plavix.  Although BMS sold the Plavix in California, the none of plaintiffs associated with the Supreme Court case bought Plavix in California or were injured in California.  In that case, the court found no minimum contacts.  In Ford, the distinction appears to be that the defendant was injured in Montana. The court writes: “Ford serves a market for a product in the forum State and the product malfunctions there.”  The problem with this distinction is that the difference has to do with the plaintiff’s activity, not the defendant’s activity. Yet, it still qualifies as a minimum contact by the defendant.  I think the answer is perhaps that “minimum contacts” is a term of art that means more than what it might imply from the two words themselves.  The court’s express concern in BMS was federalism — we should be cautious about California handling product liability cases about injury/sales that occurred in other states.  In this case Federalism points to Montana being an appropriate forum because a Montana citizen was injured while driving a car registered in Montana on a Montana road.

The majority opinion was authored by Justice Kagan and joined by Chief Justice Roberts and Justices Breyer, Sotomayor, and Kavanaugh.  Justices Alito and Gorsuch both wrote concurring opinions with Justice Thomas joining Justice Justice Gorsuch’s opinion.

Justice Alito, who penned the BMS decision explained that the difference between those cases is whether the state has a “legitimate interest” in hearing the case at hand.  Here, he found that no question — injury on Montana roads is enough to give Montana a state interest.  And, there is nothing fundamentally unfair about having Ford litigate these cases in the state.

Justice Gorsuch wrote an interesting concurring opinion suggesting that it is time for a new Shoe. “International Shoe just doesn’t work quite as well as it once did.”