US Supreme Court Strengthens Non-Obviousness Test for Patentability

In a long-awaited decision in the patent case KSR v. Teleflex, the U.S. Supreme Court refined the standard for determining whether an invention is "obvious" and therefore not patentable.

In a seminal decision Graham v. John Deere, 383 U.S. 1, 17-18, 148 USPQ 459, 467 (1966), the Supreme Court laid the foundation for an obviousness analysis under U.S. patent law by establishing a tripartite test. The three factual inquiries are (A) determining the scope and content of the prior art, (B) ascertaining the differences between the prior art and the claims at issue, and (C) resolving the level of ordinary skill in the pertinent art. In close cases, secondary considerations, such as long-felt but unsolved needs, or unsuccessful attempts by others to solve the problem, may be used in resolving obviousness.

To make the obviousness standard more objective, the U.S. Court of Appeals for the Federal Circuit (CAFC) had promulgated an additional test: the finding of obviousness must be supported by some "teaching, suggestion, or motivation that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed." ("TSM test") This additional test has now been partially overturned by the U.S. Supreme Court.

The Supreme Court in KSR, did not repudiate the CAFC requirement by completely eliminating the TSM test, since such a ruling would have profoundly and retroactively brought into question several tens, if not hundreds, of thousands of patents issued under the previous CAFC standard. The decision holds that the TSM test is not to be applied as a rigid, inflexible requirement. Although the TSM test may still be utilized in a determination to combine two or more references, a clear written teaching or suggestion in a reference is no longer required, and the general knowledge of a person having ordinary skill may be brought to bear on the obviousness issue.

The Supreme Court decision appears to reflect the view in the non-patent community that patents were being too easily granted by the USPTO. It has been said that USPTO grant of patents for only slight or inconsequential improvements was actually stifling the progress of science and useful arts, rather than promoting it, as mandated by the U.S. Constitution.

The USPTO lost no time in promulgating a Memorandum to the Patent Examining Corps, in which the KSR decision was analyzed. The direct guideline that concluded the memorandum was that "in formulating a rejection under 35 U.S.C. §103(a) [non-obviousness provision] based upon a combination of elements, it remains necessary to identify the reason why a person of ordinary skill in the art would have combined the prior art elements in the manner claimed." The reason need not be articulated or even suggested by a specific reference, and the general knowledge in the industry may be relied upon.

The practical effect of the KSR decision is that the USPTO Office Actions should continue to provide "reasons" for combining references. Arguments that a teaching, suggestion or motivation to combine references is lacking no longer can be counted on to provide a sure basis for overturning a rejection. This may make it harder to obtain allowance of pending claims, supporting the recent USPTO policy to apply more stringent requirements before allowing an application. A decrease in the allowance rate from about 70% to 54% was listed as one of the USPTO accomplishments in its fiscal 2006 report. In patent enforcement or litigation, the KSR decision will provide a stronger defense to accused infringers in an attack on patent validity, and is bound to increase patent litigation costs as the validity of a patent will gain prominence as a contested issue in more cases. These considerations, together with those brought by another Supreme Court decision directed to limitations on the Doctrine of Equivalents, make careful patent prosecution all the more important.

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Microsoft Corp. v. AT&T Corp.

The Supreme Court's recent interest in patent matters continued with its decision in Microsoft Corp. v. AT&T Corp. In a 7-1 decision, the Court held that Section 271(f) of the Patent Act does not extend to cover foreign duplication of software from a master copy supplied from the U.S. Because patent law is territorial—there is no such thing as a world-wide patent—a U.S. patent covers infringing acts occurring within the United States, but generally disregards allegedly-infringing acts occurring elsewhere in the world. The single exception to this principle is Section 271(f) of the Patent Act, which calls for infringement liability for the unauthorized supply of "components" of a patented invention for "combination" abroad.

In the present case, AT&T is the assignee of a patent on a computer to digitally encode and compress recorded speech. In the U.S., a computer installed with Microsoft WINDOWS infringes AT&T's patent—WINDOWS incorporates software code that, when installed, enables a computer to process speech in the manner claimed by the patent. For foreign-made computers sold abroad, Microsoft sends each manufacturer a master version of WINDOWS, either on a disk or via encrypted electronic transmission, which the foreign manufacturer uses to generate copies. The copies are then installed on the individual machines.

The Court framed the issue before it as: Does Microsoft's liability for patent infringement extend to computers made in another country when loaded with WINDOWS software copied abroad from a master disk or electronic transmission dispatched by Microsoft from the United States? To this, the Court answered "No."

The underlying questions the Court ultimately attempted answer in this decision concern: (1) defining and treatment of "abstract software," and (2) issues with the supply of software copies. Regarding abstract software, the Court stated: "Until it is expressed as a computer-readable "copy," e.g., on a CD-ROM, WINDOWS software, indeed any software, detached from an activating medium remains uncombinable…Abstract software code is an idea without physical embodiment, and as such, it does not match Section 271(f)'s categorization: "components" amenable to "combination." Concerning the supply of copies, the Court stated: "[T]he very components supplied from the United States, and not copies thereof, trigger Section 271(f) liability when combined abroad to form the patented invention at issue. Here, as we have repeatedly noted, the copies of WINDOWS actually installed on the foreign computers were not themselves supplied from the United States." Justice Stevens, in the lone dissenting opinion, stated that: "[I]f a disk with software inscribed on it is a "component," I find it difficult to understand why the most important ingredient of that component is not also a component."

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Bona Fide Intent to Use Requires Hard Facts, Not Merely Subjective State of Mind

In a recent non-precedential but citable decision, the Trademark Trial and Appeal Board (TTAB) sustained an opposition by Intel Corporation, against an intent-to-use (ITU) application for the mark IDEAS INSIDE. In Intel Corp. v. Emeny, Opposition No. 91123312, Applicant, Steven Emeny, filed an ITU application covering a broad listing of goods and services, including computer-related goods, along with more than two hundred items of apparel. Intel's initial opposition included claims of likelihood of confusion and dilution of Intel's INTEL INSIDE mark, but was subsequently limited to the assertion that applicant lacked a bona fide intent to use the mark in commerce at the time the application was filed.

When an applicant lacks a bona fide intent to use the mark in commerce at the time of filing an ITU-based application, the application is invalid. Therefore, such lack of intent is an appropriate ground for an opposition or cancellation proceeding. The TTAB opined that an applicant's intent must be shown by "objective" evidence in the form of "real life facts measured by the actions of the applicant," and not merely by the applicant's arguments about his subjective state of mind. Such objective evidence, which was lacking in this case, can include documentation showing plans to use the mark on the goods or services claimed, marketing plans, business plans, or licensing programs. Although it is difficult for a Trademark Examining Attorney to determine bona fide intent in an ex parte context, this case exemplifies that a trademark applicant should be prepared to objectively demonstrate its good faith, if tested in an inter partes opposition or cancellation proceeding.

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AstraZenica's Process Patent Claims for PRILOSEC® Invalidated on "Inherent Anticipation" Ground

Omeprazole, the generic name for the popular anti-heartburn drug PRILOSEC®, operates in a unique manner by transforming into its active ingredients in the acid-producing cells of the stomach lining and then inhibiting gastric acid production. Because omeprazole degrades in acidic and neutral environments, it must be protected while traveling to the acid-producing cells in the stomach by an enteric layer. AstraZenica's U.S. Patent No. 6,013,281 (the "'281 patent") claims a method for making an omeprazole formulation composed of a core containing the active, acid-inhibiting ingredient, a protective, enteric coating surrounding the core, and a water-soluble separating layer between the core and protective layer. Specifically, the patent recites a process for creating the separating layer by causing an in situ reaction involving the enteric-coating material and the core, producing an omeprazole formulation having three distinct layers.

In 2001, AstraZeneca filed suit for infringement of the '281 patent claims against several pharmaceutical companies seeking permission from the Food and Drug Administration to market generic versions of PRILOSEC®. The district court found that, while the '281 patent claims were infringed, the claims were invalid in view of a prior Korean patent application that recited or anticipated all of AstraZenica's claim limitations, either explicitly or inherently. In a 2-1 decision (Judge Rader filing the majority opinion with Judge Bryson concurring), the Court of Appeals for the Federal Circuit affirmed the district court decision holding that the in situ separation layer was formed when practicing the invention disclosed in the prior art. Therefore it was the natural result of practicing the invention and was inherent to the disclosure even though it was not explicitly disclosed in the Korean patent application.

Judge Rader's majority opinion and Judge Newman's concurring-in-part, dissenting-in-part opinion do differ in what is to be considered "inherent" in a disclosure and in how to evaluate and weigh the proof required to support such a finding. In the present case, questions arose as to whether following the process disclosed in the Korean patent application resulted in the formation of an in situ layer under all conditions or only under limited conditions. While this decision appears to have settled the issues present in this case, it certainly leaves room for further discussion of "inherent anticipation."

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SWEEPSTAKES AND CONTESTSa bonanza of brand awareness or a potential minefield for the unwary

Sweepstakes and contests are two common promotional games that can significantly increase brand awareness and can quickly create a "buzz" around a new product. However, there is a vast array of laws and regulations that pose numerous pitfalls to the unwary game promoter or sponsor. Putting on a sweepstakes or contest involves much more than simply announcing the promotion, collecting entries, and giving away prizes. All sweepstakes and contests will be subject to both federal and state laws which can vary widely in their complexity and the affirmative steps required of the promoter or sponsor prior to conducting the game. For a nationwide game that means compliance with federal laws and the laws of all 50 states.

The most important requirement that promoters and sponsors must keep in mind is that the game cannot be considered an illegal lottery. That is the game must not require "consideration" to play, hence the common buzz words "No purchase necessary." The definition of "consideration" varies by state and may include additional prohibitions on what a potential entrant may or may not be required to do or provide to participate in the game. Other potential pitfalls that game promoters and sponsors must be aware of include: (1) registration and bonding requirements (which may require up to 30 days advance registration of a game); (2) satisfying the "alternative means of entry" requirement; (3) requirements for running an "online" game; (4) the amount and detail of disclosure required in "rules" of the game; (5) eligibility of entrants; (6) advertising of sweepstakes; and (7) fulfillment and post-fulfillment issues, including posting a list or lists of winners or sending the winners list to the required state authority and obtaining the proper releases from the winners.

A successful sweepstake or contest will provide invaluable brand awareness, goodwill, and excitement. A promotional game that does not comply will all federal and state laws, however, can lead to civil liability, civil fines, and criminal penalties.

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The Muddle in Montenegro

Although almost a year has passed since Montenegro declared its independence from Serbia and became the 192nd member state of the United Nations, Montenegro IP Office (MIPO) has yet to be established and is not expected to open until September 2007 at the earliest. With no Trademark Act or similar legislation currently in place, the mechanics of protecting one's IP rights in Montenegro are far from certain. The transitional provisions were supposed to provide that the trademarks filed or registered in Serbia and Montenegro prior to Montenegro's independence (June 3, 2006) would be revalidated in Montenegro by means of a simple deposit procedure. Since MIPO has yet to become functional, however, the transitional rules have not been finalized.

WIPO has added Montenegro (ME) designation to its Madrid system in December 2006.

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Digital Radio on the Ropes

The Copyright Royalty Board (CRB) has announced its decision on Internet radio royalty rates, rejecting all of the arguments made by webcasters and adopting the "per performance" rate proposal put forth by SoundExchange (a group created by the RIAA to handle collection of royalties due to performers) instead. The rates will be enforced retroactively from the beginning of 2006, effectively bankrupting many small independent webcasters. CRB defines "performance" as a streaming of one song to one listener, so an Internet radio station with an average audience of 500 listeners would have to pay a royalty on each of the 500 "performances" for every song it plays. Under prior licensing scheme, the amount of royalty paid to a song's performers was based on a percentage of revenue; the newly-announced rates involve a predetermined per-song, per-listener fee that will increase annually at an average rate of 25% for the next four years.
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Traditional Stations Stiff George and Ringo

One aspect that emerged from the Copyright Royalty Board's decision on Internet royalty rates is the difference in treatment of traditional and digital radio stations. Traditional radio stations only pay royalties to composers of songs by purchasing blanket licenses from ASCAP and BMI. Digital radio stations pay these royalties as well, but must now also pay the performance royalty to SoundExchange that terrestrial stations do not pay. Thus, if a traditional radio station plays "Yellow Submarine," only John Lennon and Paul McCartney—the composers—are compensated; whereas if that same song is played via a webcast, George Harrison, Ringo Starr and Brian Jones would also be paid as performers (under this arrangement Lennon and McCartney would each receive a composer and a performer royalty.) The reasoning for the difference in treatment is two-fold. One is the belief held by performers that airtime translates into sales. Two stems from the Digital Performance Right in Sound Recordings Act of 1995 (DPRA), which removed the exemption from digital broadcasting under the guise that digital radio broadcasts were a perfect digital copy (with no degradation) of the original sound recording. (Even though in practice this is not true because all digital streams use "codecs" to compress the digital audio to lower bitrates. This process degrades the audio, and even though the change may not be perceptible to the ear, the result is certainly not a perfect digital copy of the original.)
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USPTO Proposes Changes for Reconsideration of Final Office Actions

The USPTO has recently proposed a rule change that would reduce the time frame for responding to a Final Office Action in trademark cases. In current practice, a request for reconsideration of an examining attorney's final refusal must be filed within six months of the mailing date of the final action. The proposed change to 37 CFR 2.64 would require that the request for reconsideration be filed within three months of the mailing of the final action. In addition, the request would need to be filed through the Trademark Electronic Application System ("TEAS"). The purpose of this amendment is to facilitate the likely disposition of an applicant's request for reconsideration prior to the six-month deadline for filing an appeal to the Trademark Trial and Appeal Board ("TTAB") or petition to the Director on the same final action. The intent is to obviate the need for some appeals or petitions, and to reduce the need for remands and transfers of applications on appeal. The requirement for using TEAS would expedite the examining attorney's notice of and access to the request. The request for reconsideration, however, would not extend the time for filing an appeal or petitioning the Director on that action. Applicants would also still have the opportunity to submit amendments for the full six-month period from the date of the final action. The USPTO expects that this rule change would relieve some of the burden on the TTAB, promote prompt and more efficient handling of the case, decrease applicant's costs, and reduce the pendancy of the case. Comments to the proposed rule change are being accepted by the Commissioner for Trademarks through April 16, 2007.
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USPTO Issues First Patent under New Accelerated Examination Procedure

The USPTO, to further combat the impression that it is slow in granting patents, has instituted an accelerated examination program (http://www.uspto.gov/web/patents/accelerated/) available to applicants who desire to have their applications examined within 12 months of their filing date. Generally, a Petition to Make Special has been available to accelerate examination in certain circumstances, for example, for an inventor who is over 65 or where the claims of a patent application are considered to be infringed. The new program was instituted in fall 2006. Grant of a Petition to Make Special under the Accelerated Examination Procedure makes USPTO treatment of such applications a priority. The first such patent, US Patent No. 7,188,939, issued to Brother Kogyo Kabushiki Kaisha of Nagoya, Japan, was filed on September 29, 2006 and issued in less than six-months on March 13, 2007. The patent claims improved ink cartridges.

The new procedure differs significantly from the previous Petition to Make Special. Several onerous requirements must be met for filing a Petition under the new procedure. Also, significant rights, available in normal examination, are waived and time deadlines are accelerated. Among the application requirements are electronic filing and prosecution, limitation of the number of claims to 3 independent and 20 total, limitation of claims to a single invention or acknowledgement that a restriction requirement response must include an election without traverse, agreement to an examiner interview, which may be conducted before examination starts, conducting a pre-examination search using both classification and word criteria, and filing of an accelerated examination support document that not only is complete, but also directs the examiner's attention to each disclosure in a cited reference where a claim limitation can be correlated, and a detailed explanation of how the claims are patentable over the prior art, among others. The intent of the procedure requirements is to be "analogous to the analysis an examiner uses when locating a relevant prior art reference" and determining its relevance. In effect, the procedure is calculated to certify that the Examiner's job has already been done and the only remaining step is approval and allowance.

Several drawbacks are immediately apparent to this new procedure. Granting special status to a number of recently filed applications will necessarily delay the examination of other pending applications. The recent experience of the Mexican Industrial Property Office (IMPI) apparently was not taken into account. By law, IMPI must examine new applications within a certain time period, but in complying with this section of the law, older pending applications have languished. Also, the procedures require meeting extensive mandatory steps, and may be subject to inadvertent (or not) discrepancies by the applicant or practitioner. The new procedures necessarily rely on the applicants' good will efforts to aid the examination process. Such reliance may lead to extra complications in later enforcement action by the patent owner, and leave an opening for an accused infringer to raise inadequacy of the search and inequitable conduct charges as possible defenses. Litigators will be pleased.

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Dot Asia Land Rush Expected

In October of 2006, ICANN announced the launch of a new regional ccTLD, .asia, intended to service entities and individuals with a presence in the 73 countries defined as being part of the Asia/Australia/Pacific region and expected to be very attractive to those doing business in the region. Registrations of the .asia domain name will most likely be rolled out on a "Sunrise" basis, somewhat similar to the procedure employed for the .eu domain. A draft of the rules has been released, with the final version expected sometime in March of 2007. The first sunrise period will be reserved for government entities, and the second will give trademark owners priority to register domains using their trademarks. Unlike the .eu registration process that had no "cut-off" date for recent registrations, leading to a flurry of applicants seeking to register their trademarks before sunrise began in order to be eligible for the first wave, the .asia procedure is expected to first allow trademark owners with "established marks"--those filed on or before March 16, 2004--to submit applications, followed by a period in which owners of a registered mark applied on or before December 6, 2006 will be given the opportunity. Rather than a "first come, first served" policy, conflicting successful applications for the same domain will be auctioned to the highest bidder, as it is thought that those applicants willing to pay a higher price will be more likely to actually use the domain.
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IP Australia Pitches In to Help USPTO

In its continuing effort to reduce the growing backlog of pending U.S. patent applications, the U.S. Patent and Trademark Office (USPTO) has extended its pilot project with IP Australia, whereby IP Australia will continue to provide search and examination services on international patent applications filed with the USPTO under provisions of the Patent Cooperation Treaty (PCT). In the next year of the project, starting March 12, 2007, IP Australia will process up to 1,200 PCT applications, covering a range of technologies. The USPTO receives about 50,000 international PCT applications annually.

The USPTO will review the work of IP Australia to ensure that it meets USPTO standards for quality and accuracy. IP Australia's Director General Ian Heath explained some of the benefits IP Australia will receive from the project, including moving closer to the vision of being an office of choice and for enhancing the international reputation of IP Australia.

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Digital Fingerprints on the iTunes

Gracenote digital fingerprint technology has exposed what appears to be a major case of musical plagiarism when it identified a recording of Liszt's 12 "Transcendental Études" attributed to late pianist Joyce Hatto as the work of a different artist. Further investigation confirmed the recordings were identical, and when other Hatto recordings came under scrutiny, many more were found to have been originally recorded by other artists. Some tracks had been tempered with, possibly to disguise their origin. In one instance the tempo was reduced by 15.112% to alter the tone. William Barrington-Coupe who runs Concert Artist label responsible for publishing the infringing works has initially denied any wrongdoing, saying the sound waves prove nothing. Sound engineers disagree, noting that even similar performances by the same artist hold detectable differences--variables such as the timber of the room, the type and placement of microphones and the noise inherent in the recording system make each recording unique. It remains to be seen whether major labels whose copyrights were violated will choose to pursue the matter in court.
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CAFC Holds That Foreign Company Only Needs "Use" in U.S. for 2(d) Opposition

The Court of Appeals for the Federal Circuit (CAFC) has reversed the Trademark Trial and Appeal Board (TTAB) ruling in First Niagara Ins. Brokers, Inc. v. First Niagara Financial Group, Inc. First Niagara Insurance Brokers, Inc. (FN-Canada) had sought to oppose registration of First Niagara Financial Group, Inc.'s (FN-US) intent-to-use trademark applications on the claim of priority under Section 2(d) of the Trademark Act, which requires only prior "use" in the U.S. FN-US had argued that FN-Canada, which has no physical presence or registered trademarks in the United States, did not establish the priority necessary to prevail on a likelihood-of-confusion claim because it had not used its marks "in commerce" in the U.S. In overturning the TTAB's agreement with FN-US, the CAFC ruled that the proper standard of Section 2(d) is that the mark or trade name must have been previously "used in the United States by another." The Court noted that the language of prior use "in commerce" was absent from the statute. It found that the privilege of an opposer claiming priority under Section 2(d) attaches to all opposers, regardless of whether they are foreign or domestic. The TTAB's decision was reversed and remanded for further proceedings, based on FN-Canada's ample use of its marks in the United States to satisfy the use requirements of Section 2(d). The implications of this case may be broad and far-reaching, if it is held that a foreign company has standing to bring a 2(d) opposition based on its "use" in the U.S. merely through its activities on the Internet.
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Medimmune v. Genentech

Until recently, patent licensees have been faced with Hobson's choice when they believed that the licensed patent was invalid or unenforceable or was not infringed by their product. On the one hand, the licensee could terminate or breach the license (creating a "case or controversy" required for federal jurisdiction and satisfying the "actual controversy" requirement of the federal Declaratory Judgment Act) and seek a court declaration regarding the status of the patent. This approach, however, poses the risk of significant monetary exposure-treble damages and licensor's attorney fees-and a potential injunction if the licensor prevails. On the other hand, the licensee could continue to abide by the terms of the license agreement; without a justifiable case or controversy, the courthouse door was closed to the licensee.

In Medimmune, Inc. v. Genentech, Inc., the Supreme Court addressed this dilemma, concluding that a licensee need not "bet the farm" by breaching the agreement in order to challenge the underlying patent. In a footnote, the Court explained how the constitutional case or controversy requirement is met by stating that a licensee who pays royalties either in fear of an injunction or for fear of treble damages is being coerced in a way that creates case or controversy-a clear departure from the existing law. The decision is worded broadly enough to cover all forms of intellectual property, not just patents. Case makes mention of but does not address contractual provisions that could be used to block claims by licensees in good standing.

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"Gmail" confusingly similar to "G-mail...und die Post geht richtig ab"

Last week's ruling from the Office for Harmonization in the Internal Market (OHIM) has set Google back in its fight for the right to use the Gmail name in Europe. Google's opponent is German-born 32-year-old venture capitalist Daniel Giersch who founded a same-day mail delivery service called G-mail (short for Giersch-mail) some six years ago. The service provides e-mail accounts ending in "gmail.de" and offers a "hybrid mail" option where electronically-sent documents are printed out by the company and physically delivered to local addresses. Empowered by earlier rulings in German district court ordering Google to remove all "Gmail" references from its German service and cease issuing gmail.com accounts to German residents, Giersch went on to oppose Google's CTM applications, citing his German registration for "G-mail...und die Post geht richtig ab" [translation: "G-mail...and the mail goes right off"] issued in 2000. Google has downplayed OHIM refusal to register its Gmail mark on a pan-European basis, saying it will not affect Google's current use of the mark in Europe.
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USPTO Battling Perception of Patent System in Crisis

The US patent system has been cited from various quarters as being "broken" or "in crisis". The general opinion regarding patents is that they are not being granted based on the patentee's innovative ideas, but that patents are obtained on the ability of the inventor's attorneys to convince the US Patent and Trademark Office (USPTO) that distinguishing (and sometimes minute) features between the claimed invention and what was known before, the prior art, rise to the level of a patent grant. The public has become jaded also to news media accounts of high profile cases, such as the US Supreme Court ruling in a patent case involving everyone's favorite electronic gadget, the Blackberry, which threatened to shut down the system by a patent holder who did not manufacture or sell any products, but merely held patents that could have conceivably blocked use of the Blackberry in the US.

Earlier this year, a number of "town hall meetings" were held by John Doll, Commissioner for Patents and James Toupin, the agency's General Counsel, to alert the patent community of proposed PTO rule changes that were intended to address these and other problems faced by the USPTO, including the large and increasing backlog of patent applications in the USPTO. The presentations were directed to those people most affected by the proposed rule changes, including patent attorneys, patent agents, independent inventors and members of the small business community. In the meeting held in Chicago in February, the local patent community voiced its strong dissatisfaction and dissent with most of the proposed rule changes, which sentiments were mirrored by patent practitioners all over the US. Several organizations have strongly opposed the implementation of the controversial rule changes in public comments to the USPTO regulatory body as to the proposed rules.

One goal of the US Patent Office has always been the issuance of timely and valid patents. The USPTO has experienced a patent pendency backlog, especially in certain technologies, that has continued to increase over the years to the extent that in some cases, the technology has become obsolete before the patent issues. However, every year on average for the last ten, 10% more patent applications have been filed than the year before. In some areas, the average period of a patent application from the time it is filed to its being taken up substantively for the first time now exceeds six years. Patent application pendency for some applications exceeds 10 years from the filing date to grant date.

The USPTO has been actively seeking to address the patent pendency problem by hiring additional patent examiners. Intending to hire 1000 new patent examiners per year for five years the USPTO exceeded that goal by over 200 for fiscal year. The USPTO acknowledges that hiring new examiners will not, by itself, solve the backlog problems. The PTO figures are somewhat misleading because the rate of examiner attrition does not allow the USPTO to expand its corps of seasoned examiners to address the noted problems. In fiscal 2005, the USPTO hired 959 new examiners, but in the same period, 425 examiners retired, resigned or were let go (attrited in USPTO parlance).

Other elements of the USPTO strategy to address the perceived problems include changes to internal operations of the USPTO and others set forth in a 2006 fiscal year end reportiv. Training of new examiners is a crucial matter, but the traditional way of providing such training, one-on-one hands on training by seasoned examiners, was found to hinder examination of new applications and thus added to the backlog. To free the examining corps to examine, examiner training has been replaced by a university model. This has led the USPTO to claim that patent quality has increased, using an internal USPTO metric, the patent error rate as determined by USPTO quality control. The error rate of examined applications has been reduced from an average of about 5% in previous years to 3.6%.

Additional USPTO rule changes proposed in January of this year will most likely not be implemented as they were panned by the patent community as drastically changing the way that the USPTO would interact with inventors and their attorneys. Additional legislative input was contemplated in Congressv toward reform of US patent law, but the political landscape has been changed by the November election with as of yet unknown ramifications. The proposed overhaul of patent laws was also intended to address general dissatisfaction within the technology community, and especially the cutting edge Information Technology community, of the patent system and IP enforcement by the US court system. The US patent system has been seen, even among the general public, as being counterproductive to the goals set forth in the US Constitution "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." Additional input is expected from the US Supreme Court from a decision expected before June 2007 in a patent case that may change the standard of obviousness, making it more difficult to find a claimed invention patentable, or a patent valid.

Past public opinion of the patent system as providing the economic framework for bringing innovative ideas to market and thereby catapulting the US into the technological supremacy, has been supplanted by the general feeling that the patent system is being gamed by unscrupulous actors to keep innovative technology from reaching the market. This tend has been seen as holding up general technological progress. Abraham Lincoln, the only US President to be awarded a patent, considered that "[t]he patent system . . . secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things." The limited monopoly of a patent granted to a patentee the right to exclusively exploit an invention during the life of the patent, and so provides incentive to inventors to invent and discover "a new and useful process, machine, manufacture, or composition of matter or any new and useful improvement thereof. . ." The next year is expected to provide additional insight in whether the US Congress and USPTO efforts to revamp the patent system will serve these admirable goals.

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New Exemptions to Prohibition Against Circumvention of Technology

The Digital Millennium Copyright Act (DMCA) contains numerous provisions that guard against individuals attempting to circumvent copyright controls or protection in various technologies. However, pursuant to terms of the DMCA, the Librarian of Congress has issued a rule setting out six classes of works that will be subject to three-year exemptions from the statute's prohibition against circumvention of technology. The proponents of these exemptions were able to demonstrate that the prohibition on circumventing access control had a substantial adverse effect on the ability of people to make non-infringing uses of the six particular classes of copyrighted works. The six classes of copyrighted works, subject to additional restrictions, are: 1) audiovisual works included in the educational library of a college or university's film or media studies department; 2) computer programs and video games distributed in formats that have become obsolete and that require the original media or hardware as a condition of access; 3) computer programs protected by dongles that prevent access due to malfunction or damage and which are obsolete; 4) literary works distributed in ebook format when all existing ebook editions of the work contain various access controls; 5) computer programs in the form of firmware that enable wireless telephone handsets to connect to a wireless telephone communication network; 6) sound recordings, and audiovisual works associated with those sound recordings, distributed in compact disc format and protected by technological protection measures that control access to lawfully purchased works. Those who may benefit from three of the newer classes of exempted works include owners of wireless telephone handsets who want to continue to use the handsets when they switch to new wireless carriers, film professors making compilations of film clips for classroom instruction, and those who test, investigate and correct security vulnerabilities on compact discs that are distributed with access control technology that compromises the security of personal computers. The exemptions went into effect on November 27, 2006, and will remain in effect until October 27, 2009.
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Perfumer's Tagline Causes a Stink

Perfumer Sephora most recent promotion using the tagline "The Greatest Gift Show on Earth," landed it in court with the greatest of ease. The marketing campaign features a swinging trapeze artist animation and a festive organ grinder's monkey. Once the Ringling Bros. and Barnum & Bailey circus, which has been using its famous "The Greatest Show on Earth" mark since the 1890's, learned of the promotion, it filed a suit against Sephora and its parent company, the Paris-based LVMH Moet Hennessy Louis Vuitton SA, in the U.S. District Court in Manhattan.
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Priority Document Electronic Exchange Program Between USPTO and EPO

The United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO) are set to launch a new free service that will simplify filing procedures in each others offices by allowing patent application priority documents to be exchanged between the two offices electronically. Filing of priority documents is required when applicants are claiming an earlier application filing date in one patent office based on a prior application filing in another. Claiming priority is a valuable tool for businesses investigating whether to pursue patent rights globally because it provides additional time for making a decision as to whether and how extensively to pursue worldwide protection. Under the Paris Convention for the Protection of Industrial Property, a patent applicant may file an application in one Paris Convention member country (the priority document), and within 12 months, file corresponding applications in other member countries, while obtaining the benefit of the first application's filing date. Paris Convention filings are a critical component in many applicants' global business and patenting strategies and represent a substantial portion of worldwide patent activity. It is expected that as a result of this agreement, substantial benefits of reduced expenses and paperwork will ensue when filing a Paris Convention application in the EPO. Other treaties also provide for foreign application rights. For example, the Patent Cooperation Treaty (PCT) can effectively defer the decision of whether and in which countries to file a patent application up to 2 ½ years from the original priority document filing date.
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