USPTO releases report on patent examination outcomes after the Supreme Court’s Alice decision

The United States Patent and Trademark Office (USPTO) published a report authored by its Chief Economist titled, Adjusting to Alice: USPTO patent examination outcomes after Alice Corp v. CLS Bank International. The report highlights how recent actions undertaken by the USPTO have brought greater predictability and certainty to the determination of patent eligibility in the technology areas most affected by the decision.

“We have heard anecdotally from both examiners and applicants across the entire spectrum of technologies that our 2019 guidance on Section 101 greatly improved the analysis in this important area of patent law,” said Andrei Iancu, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. “The Chief Economist’s report now confirms this general perception, especially with its critical finding that uncertainty decreased by a remarkable 44%.”

The report’s analysis by the USPTO’s Office of the Chief Economist found that one year after the USPTO issued its January 2019 Revised Patent Subject Matter Eligibility Guidance (2019 PEG), the likelihood of Alice-affected technologies receiving a first office action with a rejection for patent-ineligible subject matter had decreased by 25%. Likewise, uncertainty about determinations of patent subject matter eligibility in the first action stage of patent examination for the relevant technologies decreased by 44% over the first year following publication of the 2019 PEG compared to the previous year.

“The primary economic function of the patent system is to provide an incentive for greater innovation,” according to Dr. Andrew Toole, Chief Economist of the United States Patent and Trademark Office and principal author of the report. “Using an evidence-based approach, our report highlights the significant impact of the Supreme Court’s Alice decision on patent examination outcomes and the important stabilizing role played by the USPTO. This is what innovators and investors need to confidently promote entrepreneurship, create jobs, and advance science and technology.”

Director Iancu added, “I have long said that in order to ensure that the United States remains the global leader in the technologies of the future, our patent system must move beyond the recent years of confusion and unpredictability on subject matter eligibility. It is now clear that our recent guidelines mark a significant step in that direction, and I ask all involved in our treasured patent system to come together and solve, once and for all, this fundamental issue.”

The full report is available for download from the USPTO’s website.

All Patent and Trademark Applicants, Patentees and Trademark Owners Who Are Affected by Covid-19

The United States Patent and Trademark Office (USPTO) considers the effects of the Covid-19 outbreak that began in approximately January 2020 to be an “extraordinary situation” within the meaning of 37 CPR 1.183 and 37 CPR 2.146 for affected patent and trademark applicants, patentees, reexamination parties, and trademark owners.

Patent applicants will be able to file a petition to revive and the USPTO will waive the fee for those “who were unable to timely reply to an Office communication due to the effects of the coronavirus outbreak, which resulted in the application being held abandoned or the reexamination prosecution terminated or limited.”

The petition to revive “must include a statement that the delay in filing the reply required to the outstanding Office communication was because the practitioner, applicant, or at least one inventor, was personally affected by the Coronavirus outbreak such that they were unable to file a timely reply.”

Trends For Women Inventors

The United States Patent and Trademark Office (USPTO) released a report on the trends and characteristics of U.S. women inventors named on U.S. patents granted from 1976 through 2016. The report delivers several important findings, including:

  • The share of patents that include at least one woman as an inventor increased from about 7 percent in the 1980s to 21 percent by 2016.
  • Even with this increase in patent counts, women inventors made up only 12 percent of all inventors on patents granted in 2016.
  • Gains in female participation in science and engineering occupations and entrepreneurship are not leading to broad increases in female inventors earning a patent.
  • Technology-intensive states, as well as those where women comprise a large percentage of the state’s overall workforce, show higher rates of women inventors.
  • Women inventors are increasingly concentrated in specific technologies, suggesting that women are specializing in areas where female predecessors have traditionally patented rather than entering into male-dominated fields.
  • Women are increasingly likely to patent on large, gender-mixed inventor teams, and are less likely than men to be an individual inventor on a granted patent.

“Women inventors have made and continue to make key contributions,” said Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO Laura Peter. “We look forward to working with industry, academia, and other government agencies to identify ways to increase the number of women inventors in all sectors of our economy.”

The full report can be found online at www.uspto.gov/learning-and-resources/ip-policy/economic-research/progress-potential.

Best Practices for Design Patents- Conclusion

By Debby Winters

We have discussed various aspects of design patents in this series of blog posts. In short, design patents should be considered to provide an alternative or additional means of protection for an invention, and generally have a lower cost, higher allowance rate, and faster timeline than utility applications. The guidelines outlined in this series should be considered when preparing an application for an ornamental design. However, you should always consult with a licensed patent attorney before moving forward with your application. We would be happy to serve as your patent attorney. Good luck!

Best Practices for Design Patents

By Debby Winters

The first examination to undertake is to understand what a design patent is and how it differs from a utility patent.

U.S. design patents cover the ornamental design of an object having practical utility. The subject matter claimed is the design embodied in or applied to the article and not the article itself.  In other words, the subject matter of a design patent application may relate to the configuration or shape of an article, to the surface ornamentation applied to an article, or to the combination of configuration and surface ornamentation. In contrast to a utility patent that protects the way an article is used and works,  a design patent protects the way an article looks.

I am often asked whether a client should seek a design or a utility patent. While it depends on the invention, a U.S. design patent provides a number of advantages when compared to a U.S. utility patent. First, design patents have a higher allowance rate. Second, design patents have a faster time to final resolution. Finally, design applications are typically less than half the cost of utility applications due to their expedited prosecution and the limited specification required in design patent applications.

The five areas for our discussion on best practices will focus around the following:

  1. Know the Subject Matter Qualifications
  2. Drawing Quality is Key
  3. Figure Views Should be Consistent
  4. Use of Solid vs. Broken (Phantom) Lines
  5. Include Additional Embodiments

We will discuss each in a separate blog post starting with the first so keep reading!

What Every Startup Needs To Know: IP Pitfalls- Poorly Written Or No Agreements- Part Nine

By Debby Winters

Using poorly written agreements or no agreements at all can be a disaster for the startup. Not only is the valuation of a startup based on the IP that it owns, but also on the agreements with IP clauses. Examples are not just limited to things you typically think of as IP agreements but can include employment, consulting, funding, collaboration, settlement, licensing, research, and material transfer agreements. Thus, poorly drafted or non-existent IP-related agreements can be problematic for a startup.

Because of a lack of sufficient funding, many startups attempt to save legal expenses by using template IP-related agreements from a variety of non-professional sources, including the internet. However, such agreements can fail to include clauses that adequately protect the startup’s interest and in many cases, can include clauses that jeopardize a startup’s IP. Thus, when using IP-related agreement templates, the startups should have such agreements at the very least vetted by IP professionals. Startups can also do themselves a disservice by using an attorney who is not familiar with the nuances of IP law.

Many IP-related agreements, particularly research agreements, generally include confidentiality, publication, and IP clauses. The startup should review confidentiality and publication clauses to ensure that confidential information, including trade secret information, is protected from disclosure and that the startup has the right to review manuscripts and other materials containing confidential information before publication. With respect to the IP clauses, the startup should make sure the language allows for retaining its own IP and for protecting jointly developed IP.

Furthermore, with respect to patent license agreements involving a third-party licensor, startups need to make sure that the license agreement provides all the rights needed to commercialize the licensed technology, includes future improvements to the technology, and retains the right to sublicense the technology. The agreement should also have a sufficient termination clause in the event the startup needs to opt-out of the agreement.  The agreement should also specify the relevant field of use and possibly other fields for future expansion. Importantly, the startup should review patents to ensure that the commercialized product materials, methods, and tools are properly claimed with patent life remaining. This should be drafted and reviewed by an experienced IP attorney.

In conclusion to the series of blog posts dealing with common IP pitfalls for a startup, the process of bringing a new startup business to life and in launching new products to the marketplace can be an exciting time. However, many startups are so focused on bringing a new product or service to market that they fail to take the necessary steps to protect the associated IP. Failure to put an IP plan in place can cripple valuation and expose the startup to potential third-party infringement risk. In contrast, startups can protect and exploit their IP assets to build value and revenue by developing an IP plan as part of their conception, creating an action plan to protect IP assets including protection of confidential information, securing ownership rights to the IP, conducting freedom-to-operate searches, and ensuring properly drafted IP-related agreements are in place.

If you need help with your IP or with protecting it, let me know.

What Every Startup Needs To Know: IP Pitfalls- Failure to Identify Third-Party Rights- Part Eight

By Debby Winters

Next in this series, we will discuss the failure of the startup to recognize thrid-party rights. When we think about third-party rights in the IP, we are thinking about competitors who may have a patent for a technology within a product. Every startup should be cognizant that its company commercialization may be blocked by this type of third-party right. Accordingly, startups, at an early stage, should consider a “freedom to operate” (FTO) search or clearance to assess litigation risks. A FTO is performed to make sure that commercial products, marketing and use of the product, process or service do not infringe the IP rights of third-parties.

An FTO analysis begins by searching issued patents or pending applications and obtaining a legal opinion from a licensed patent attorney knowledgeable in that field as to whether the product, process, or service may be considered to infringe one or more patents owned by others. Patents that limit the startup’s FTO can be addressed by buying or licensing the underlying technology or patent, by cross-licensing the technology or patent, or by creatively “inventing around” the patented invention by altering the startup product or process, thus avoiding infringement.

An example of how to “invent around” would be in software development, where a startup chooses to incorporate open source software into its code. However, open source licenses also need to be carefully reviewed to ensure compliance with license terms. In some instances, the use of open source code in a startup product may transform the startup’s proprietary code into open source software resulting in public disclosure of the proprietary code. It is always best to consult a licensed patent attorney.

A startup will sometimes use third-party photographs, images, or text in marketing or product support materials. In such cases, the startup should investigate if permission is required to use the material, identify the rights needed, and contact the owner for permission or a license. Startups should make sure the copyright permission or license agreement is in writing.

Comprehensive trademark searches should be conducted early in the business planning process to make sure that the desired business, product, or service name does not conflict with a registered trademark. A startup that fails to conduct a proper trademark search risks receiving a cease and desist letter or even being sued.  This may necessity a need to rebrand after launch and incur the tangible and intangible costs associated with rebranding.

Businesses need broad awareness when hiring new employees, especially those that may have knowledge of competitor’s trade secrets. This is another way to infringe on a third-party’s IP rights.  New employee agreements should include clauses that prohibit employees from transferring or using proprietary information or materials from previous employers. The startup should also verify that the new hire is not subject to any binding non-compete agreements from former employers.

In dealing with third-party rights, startups are well-advised to consider their options at an early stage. In some cases, minor product or service changes, payment of a small licensing fee to the patent or copyright owner, and/or changing potentially problematic trademarks early on and implementing careful employee hiring practices may be sufficient to avoid future disputes and can improve a startup’s chances of attracting business partners and investors to support its business development plans.

In our next blog we will discuss the pitfalls of using poorly drafted agreements to cover IP, and the danger of not using a written agreement at all.