AIA and Patent Prosecution: Navigating the Ethical Grey Area - - PowerPoint PPT Presentation

AIA and Patent Prosecution: Navigating the Ethical Grey Area

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WEDNESDAY, JULY 24, 2013

Presenting a live 90-minute webinar with interactive Q&A

Mercedes K. Meyer, Partner, Drinker Biddle & Reath, Washington, D.C. Kevin E. Noonan, Ph.D., Partner , McDonnell Boehnen Hulbert & Berghoff, Chicago

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AIA and Patent Prosecution: Navigating the Ethical Grey Areas

July 24, 2013 Mercedes Meyer, Ph.D. Kevin Noonan, Ph.D.

We’re Not Your Lawyers

• These materials are public information and have been prepared solely for

educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law and practice. These materials reflect only the personal views of the speakers and are not individualized legal advice. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, Drinker Biddle & Reath LLP and McDonnell Boehnen and the speakers cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with either firm or either speaker, or any combination thereof. While every attempt was made to insure that these materials are accurate, errors or

• missions may be contained therein, for which any liability is disclaimed.
• And nothing represents the views of any sentient life form on the earth or universe,
• r any parallel universe, alive or dead, fictitious or real! This is for entertainment

purposes only.

6

What we will try to cover!

• The timeline of change.
• Who really gets in trouble.
• The AIA.
• The New USPTO Ethics Rules.
• Daily Business of Prosecution, Litigation,

Opinions, Transactions.

• Some Solutions?

7

Timeline of Change - Date Insanity

• Remembering dates and their application will be a matter of

diligence, competence and avoiding negligence.

6/8/95 URAA 11/29/99 AIPA 12/10/04 9/16/2011 9/16/2012 3/16/2013

• Best mode
• Virtual & false marking
• OED Stat. of limitations
• Micro entity status
• PTE

9/26/2011

• Oath & Dec
• Preissuance submission
• Supplemental exam
• IPR
• PGR for business

methods

• 17 years from grant

to 20 years from filing

• CONS/DIVS/CIPS
• Claim of benefit – 1.78
• Publication after 18 mos.
• Inter partes reexamination
• RCE v. CPA practice

Prioritized Exam

5/29/00

PTA 154(b)

• CREATE Act

103(c)

• Final rules for

interferences and appeals (9/10/04) Myriad 6/13/13

• FITF
• Derivation
• Loss of

interference

• Repeal of statutory

invention registration

• PGR for everything

else Prometheus 3/21/2012

New PTO Ethics Rules

8

Who Gets In Trouble?

Why? & How?

WHO: Statistics

• FY2012

– 28 cases of reciprocal decisions, 27 of non- reciprocal.

• 22 suspensions, 18 reprimands, and 15 exclusions.

– 100 warning letters. – Grievance types (generally): neglect, dishonesty, fraud, misrepresentation, and fee issues.

• Requiring more than one issue.

10

HOW: Complaints at OED

• OED – reviews complaints, conducts

investigations and enforces the Code.

• Complaints

– Can come from an examiner, a client, published decisions and news articles, state bar associations, or opposing counsel in inter partes proceedings.

• No formal “complaint” is required.

– Reciprocal Discipline: Practitioners are subject to discipline…regardless of whether their conduct was related to practice before the Office.

11

What Rules?

• 1985 – PTO Code adopted.

– Still current rules even though based upon “Model Code” which states have replaced with “Model Rules.” – Model Rules not same as PTO Code.

• 2012 – OED proposes changing to slightly

modify the Model Rules.

• 2013 – May 3, 2013 new USPTO rules effective,

based on ABA Model Rules (lessens conflicts with state ethical requirements).

12

Neglect Examples

Less Severe More Severe In re Kubler (D2012-04)

• Neglected to communicate with

clients.

• Lacked an uniform system of client

notification and reply. Reprimanded In re Rayve (D2011-19)

• Failed to notify clients of correspondence.
• Allowed applications to become

abandoned. Suspended for 2 years In re Shippey (D2011-27)

• Neglected multiple matters entrusted to

him.

• Engaged in multiple counts of professional

misconduct.

• Handled matters without adequate legal

preparation.

• Failed to seek lawful objectives of client.
• Failed to carry out employment contract

with clients. Excluded

13

Fraud Examples

Less Severe More Severe In re Chan (D2011-21)

• Had clients sign oaths or declarations prior

to any application preparation, thus violated the oath that person reviewed the application. Reprimanded In re Bollman (D2010-40)

• Filed 6 boxes of IDS documents in 4 cases.
• Failed to read, review, or inspect any of

them.

• Thus, made false certifications to the Office.

Reprimanded In re Edelson (D2011-13)

• Provided false or misleading status information on

patent, PCT, and TM matters to clients.

• Failed to keep himself informed of the status and

allowed applications to go abandoned without client consent.

• Provided false or misleading information to OED

during investigation. Suspended for 3 years In re Massicotte (D2012-22)

• Provided the Office with false or misleading

information in connection with petitions to review three abandoned trademark applications. Suspended for 2 years

14

Fee Examples

Less Severe More Severe In re Scott (D2011-34)

• Had 5 checks returned for insufficient

funds.

• Agreed to new trust account with Florida

bar monitoring. Reprimanded In re Johansen (D2011-35)

• Had 2 checks dishonored for insufficient

funds.

• Each to revive abandoned applications.
• But both applications were not revived.

Reprimanded In re Ames (D2011-25)

• Abandoned applications and clients

without consent.

• Failed to refund fees.

Excluded In re Peterson (D2011-54)

• Convicted of theft from client’s business

checking account by using a check debit card to withdraw funds and writing checks

• n account without client’s knowledge,

permission, or consent. Excluded

15

AIA Changes

Buckets in Brief

Missed dates Averments & Certifications Potential Failure to Comply with a Duty / New Options First Inventor to File (FITF). Patent Term Extension. Inter partes reexams. PGR / IPR. Preissuance submissions Inter partes reexamination. Rule 99 procedures are now gone. PTE. Inventor’s Oath. Inventor’s Oath. Micro Entity / Small Entity. Supplemental Examination. Best Mode. First Inventor to File (FITF). Marking. Preissuance submissions. IPR / PGR / Derivation / Interference. 42.12 PTAB Sanctions. Rules 99 / 292.

17

Missed Dates

• Classic Problems:

– Annuities / maintenance fees. – Failure to timely file (FITF affects these dates).

• New / Emerging Problems?

– Transitional applications. – Botched application drafting for US and abroad. – New Inventor Declarations.

• DIVs / CONs filed after 9/16/2012 – a hypothetical.
• Declarations for new applications filed after application.

– Rule 292. – Timely filing of PGRs, IPRs, PTEs.

18

Averments / Statements / Certifications

• Combined Power of Attorney and

Declaration- PRACTICALLY GONE:

– Why: inventors vs. “applicant”. – Changes: required use of ADS.

• Micro entity status.

– Proving you qualify. – What about marriage? – Inventors vs. universities: can lose rights if the correct entity is not named.

19

Averments – Good News

• Lack of deceptive intent averments no longer

required for:

– Correction of inventorship of an application / patent. – Retroactive grant of a foreign filing license. – Initiation of a reissue application. – Sustaining the validity of the remaining claims in a patent for which some of the claims are rendered invalid.

• BUT….. has it really gone away? Whose

deceptive intent? Duty of care/investigation?

20

Failure to Comply with a Duty

• Best Mode – penalty gone, but duty remains.

– http://www.uspto.gov/aia_implementation/faq.jsp – Only §282 defense removed. – Remember 1.105, 18 USC §1001 & 35 USC §257(e), Preissuance submissions by angry inventors, and the real fraud exception of Therasense.

• What if your client doesn’t want you to disclose the best mode?
• Consolidated Aluminum Corp. v. Foseco Int’l Limited, 910 F.2d 804

(Fed. Cir. 1990) in view of Therasense .

– Old 37 CFR 10.23 – the practitioner can be subject to investigation. – Usually tied to written description and enablement problems. – Suits pending before 9/16/11.

21

Failure to Comply with a Duty

• First Inventor to File – changes to §102/§103

– Publication issues – what does “otherwise available to the public” mean. – On Sale – “on sale anywhere in the world”. – Disclosure anywhere in the world in any language. – Death of the Hilmer doctrine. – Designation of AIA status of claims.

• Marking

– Whose duty is it to inform regarding marking?

• Preissuance Submissions

– Duty to monitor published application?

22

Supplemental Exam

• §257(a): “A patent owner may request supplemental

examination of a patent in the Office to consider, reconsider, or correct information believed to be relevant to the patent[.]”

– “Relevant” NOT the same as “material” – not an admission

• f materiality.

– Applies to all patents; allows PTO to consider, reconsider or correct information. Safe harbor for new information submitted in SE. – Safe harbor inapplicable to civil actions before SE request. – Other / better options: reissue, ex parte reexamination?

23

Supplemental Examination

• Fraud exception [§257(e), 125 STAT. 326-327]

– (e) FRAUD.—If the Director becomes aware, during the course of a supplemental examination or reexamination proceeding …, that a material fraud on the Office may have been committed in connection with the patent that is the subject of the supplemental examination…the Director shall also refer the matter to the Attorney General for such further action as the Attorney General may deem appropriate. – Remember the Bollman OED decision above about the 6 boxes of documents.

24

SE – The Numbers

• At least 18 requests have been filed.

– At least 3 without SNQ / 9 with SNQ. – 4 tied to litigation.

• Englishtown v. Rosetta Stone, Inc. (D. Mass)
• EagleView Technologies, Inc. v. Aerialogics LLC (W.D. Wa)

– Appear to be moving fast for now. – May be a good Prometheus / Myriad fixing method. – Not a pre-litigation “car wash” – no large IDS submissions, e.g. – intended to be way to correct specific deficiencies.

25

PTAB Sanctions

• 37 CFR 42.12 (a): The Board

may impose a sanction against a party for misconduct, including:

– (2) advancing a misleading or frivolous argument or request for relief; – (3) Misrepresentation of a fact; – (7) Any other improper use of the proceeding, including actions that harass or cause unnecessary delay or an unnecessary increase in the cost of the proceeding…

• Genentech v. Chiron, 75

USPQ2d 1881 (BPAI 2004) (Unpublished).

26

New Ethics Rules

Like the Model Rules – But not entirely – an abridged review

Some “Notable” Differences?

• Comparing the Rules

– http://www.uspto.gov/ip/boards/oed/Aba vsUSPTO.pdf

• Definition of “Fraud” and

“Fraudulent” – 11.1

• Tribunal means “the Office, a

court…” – 11.1

• 11.101 - Competence
• 11.106(c) – Confidentiality
• 11.105 & 11.107-110 – Waivers &

Writings

• 11.106 - Confidentiality
• 11.108(e)(3) and (4) – Fee

advancement

• 11.108(i)(3) – Interest in a patent
• r application
• 11.115 – Client records on funds

– patent agents

• 11.302 – Expediting proceedings

– patent laches

• 11.303 – Candor toward a

tribunal

• 11.404 – Electronically stored

information

• 11.704 – Fields of Practice
• 11.804 – Misconduct
• 11.901 – Savings clause

RED = Different from MRPR GREEN = updated alignment with MRPR

28

37 CFR § 11.1: Fraud and Fraudulent

• [Added to 37 CFR § 11.1 by this rule

package, replacing previous definition.]

• Fraud or fraudulent means conduct that

involves a misrepresentation of material fact made with intent to deceive or a state

• f mind so reckless respecting

consequences as to be the equivalent of intent, where there is justifiable reliance

• n the misrepresentation by the party

deceived, inducing the party to act thereon, and where there is injury to the party deceived resulting from reliance on the misrepresentation. Fraud also may be established by a purposeful omission or failure to state a material fact, which

• mission or failure to state makes other

statements misleading, and where the

• ther elements of justifiable reliance and

injury are established.

• Different from ABA Model

Rule definition.

• Gross negligence included
• Deliberate omission.
• “Material fraud” is not

defined.

• Does this now throw us in

conflict with the decision in Therasense?

• Unitherm Food Sys. Inc. v.

Swift-Eckrich Inc.

29

37 CFR § 11.1: Tribunal = The Office

• [Added to 37 CFR § 11.1 by this rule

package.]

• Tribunal means the Office, a court,

an arbitrator in a binding arbitration proceeding or a legislative body, administrative agency or other body acting in an adjudicative capacity. A legislative body, administrative agency or other body acts in an adjudicative capacity when a neutral official, after the presentation of evidence or legal argument by a party or parties, will render a binding legal judgment directly affecting a party’s interests in a particular matter.

• Definition is more

expansive than MRPR and appears to include the entire Office.

30

37 CFR § 11.101: Competence

• § 11.101 Competence.
• A practitioner shall

provide competent representation to a client. Competent represen- tation requires the legal, scientific, and technical knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

• This is needed to get a

patent registration number.

• What about Trademark

attorneys practicing before the USPTO?

31

Waivers & Writings

• Old Model Code did not

require explicit writing requirements.

• 11.105 – Scope of

representation and fee terms are preferably in writing.

• See also 11.107-11.110

(conflict of interest), 11.112, 11.117 and 11.118.

32

37 CFR § 11.106(c): Confidentiality of Information

• (a) A practitioner shall not reveal

information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation, the disclosure is permitted by paragraph (b) of this section, or the disclosure is required by paragraph (c) of this section.

• (c) A practitioner shall disclose to

the Office information necessary to comply with applicable duty of disclosure provisions.

• 11.106(c) is not present in MRPR

1.6. It differs from old § 10.57(c) which recited “may reveal”.

• ISSUE: Can you OR must you cite

a confidential document of one client that pertains to the patentability of another client’s claims under Rule 11.106?

– See J. Nies dissent in Molins PLC v. Textron Inc., 48 F.3d 1172 (Fed. Cir. 1995). – Noisy withdrawal?

• ISSUE: Best mode required for

patentability.

33

37 CFR § 11.108(e)(3)&(4)

• (3) A practitioner may advance

costs and expenses in connection with a proceeding before the

• ffice provided the client remains

ultimately liable for such costs and expenses; and

• (4) A practitioner may also

advance any fee required to prevent or remedy an abandonment of the client’s application by reason of an act or

• mission attributable to the

practitioner and not to the client, whether or not the client is ultimately liable for such fee.

• Not present in MRPR 1.8.
• Generally be clear on what you

will advance on costs and expenses in your engagement letter.

34

37 CFR § 11.108(i)(3)

• (i) a practitioner shall not

acquire a proprietary interest in the cause of action, subject matter of litigation, or proceeding before the Office which the practitioner is conducting for a client, except that the practitioner may, subject to the other provisions in this section:

• (3) in a patent case for a

proceeding before the office, take an interest in the patent

• r patent application as part
• r all of his or her fee.
• See old 37 C.F.R. § 10.64.
• Reasonable fee issues may still

exist within state jurisdictions.

35

37 CFR § 11.115: Safekeeping property

• Practitioner in a foreign country
• (5) Patent agents and persons

granted limited recognition who are employed in the United States by a law firm. The records kept by a law firm employing one or more registered patent agents or persons granted limited recognition under § 11.9 are deemed to be in compliance with this section if the types of records that are maintained meet the recordkeeping requirements of the state where at least one practitioner

• f the law firm is licensed and in

good standing, the recordkeeping requirements of the state where the law firm’s principal place of business is located, or the recordkeeping requirements of this section.

• Practitioner in a foreign country must

have funds in a separate account in that country or elsewhere with the consent of the client.

• Patent agents are not governed by

MRPR in any state. If Agent had no record keeping practice, then update.

• Do not change your record keeping if

already in compliance with state

• requirements. 11.115(f)(4) and (5)

are safe harbors.

• 11.115 extends to practitioners
• utside the US.

36

37 CFR § 11.302 – Expediting Proceedings

• § 11.302 Expediting

proceedings.

• A practitioner shall

make reasonable efforts to expedite proceedings before a tribunal consistent with the interests of the client.

• Patent laches, stays,

and filing multiple continuations.

• If the client wants it,

then what?

• What about RCEs?

37

37 CFR § 11.303: Candor toward a Tribunal

• (a) A practitioner shall not

knowingly:

• (1) Make a false statement of

fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the practitioner;…

• (e) In a proceeding before the

Office, a practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions.

• Use of the term “tribunal”.
• 37 CFR 10.23 is gone, but it is

spread around in other new rules.

38

37 CFR § 11.404: Respect for rights of third persons

• (b) A practitioner who

receives a document or electronically stored information relating to the representation of the practitioner’s client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender.

• Not in the original proposed

PTO ethics rules.

• Applies to e-discovery and

metadata.

• The rule corresponds

exactly to MRPR 4.4.

39

37 CFR § 11.704 – Fields of Practice

• § 11.704 Communication of fields of

practice and specialization.

• (b) A registered practitioner who is

an attorney may use the designation “Patents,” “Patent Attorney,” “Patent Lawyer,” “Registered Patent Attorney,” or a substantially similar

• designation. A registered practitioner

who is not an attorney may use the designation “Patents,” “Patent Agent,” “Registered Patent Agent,” or a substantially similar designation. Unless authorized by § 11.14(b), a registered patent agent shall not hold himself or herself out as being qualified or authorized to practice before the Office in trademark matters or before a court.

• The list differs from what is

allowed under the ABA MRPR:

– (b) A lawyer admitted to engage in patent practice before the United States Patent and Trademark Office may use the designation “Patent Attorney” or a substantially similar designation.

40

37 CFR § 11.804 –Misconduct

• (a) Violate or attempt to violate the USPTO

Rules of Professional Conduct…

• (b) Commit a criminal act…
• (c) Engage in conduct involving dishonesty,
• fraud, deceit or misrepresentation;
• (f) Knowingly assist a judge, hearing officer,

administrative law judge, administrative patent judge, administrative trademark judge, or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law;

• (g) Knowingly assist an officer or employee of

the Office in conduct that is a violation of applicable rules of conduct or other law;

• (h) Be publicly disciplined on ethical or

professional misconduct grounds by any duly constituted authority of (1) a State, (2) the United States, or (3) the country in which the practitioner resides; or

• (i) Engage in other conduct that adversely

reflects on the practitioner’s fitness to practice before the Office.

• 10.23 is gone, but exists a little in

11.804.

• (g) to (i) do not exist in the

comparable MRPR 8.4.

41

37 CFR § 11.901 – Savings clause

• § 11.901 Savings clause
• (a) A disciplinary proceeding based
• n conduct engaged in prior to the

effective date of these regulations may be instituted subsequent to such effective date, if such conduct would continue to justify disciplinary sanctions under the provisions of this part.

• (b) No practitioner shall be subject to

a disciplinary proceeding under this part based on conduct engaged in before the effective date hereof if such conduct would not have been subject to disciplinary action before such effective date.

• This rules has no cognate rule

under the ABA MRPR.

• Effective date is May 3, 2013.

Before that we had the prior USPTO Code in place.

42

Navigational Solutions

Daily Business

• Prosecution

– changes to fees, forms, duties, rules. – Prosecution transparency and conflicts of interest.

• Opinions

– Two sets of statutes and rules to know – determine which applies.

• Licensing

– Cost of the above is more expensive.

• Litigation

– More laches & stays / less inequitable conduct? – More options with IPR, SE, CBM, and eventually PGR.

• Fees – with increasing options / steps, come decreases in

efficiencies or increases in costs – communicate them.

44

Prosecution & Opinions Solutions

• Docketing – review and update your call-ups.
• Forms software – outsourcing forms software

to others.

• Written description software.

– Writing applications, updating claims. – Writing opinions.

• Educating your staff and professionals.

45

Additional Solutions

• Update your checklists for opinions, prosecution, and

due diligence.

• Update your “best” practices.

– Form letters and checklists.

• Brainstorm with your group on issues, if possible

regularly.

• Engagement Letters

– Outline your duties with your client.

• What actions are you responsible / not responsible for?
• Payment of fees.

– Point out that duty of candor may require you to file and comment on another client’s patent.

46

Thank You!

Mercedes K. Meyer, Ph.D.

Drinker Biddle & Reath LLP Mercedes.Meyer@dbr.com 202-842-8821

Kevin E. Noonan, Ph.D.

McDonnell Boehnen Hulbert & Berghoff LLP noonan@mbhb.com 312-913-2145

47

Additional Materials

• Changes to Representation of Others Before the United States Patent and

Trademark Office (April 2004) 68 Fed. Reg. 69442.

– https://www.federalregister.gov/articles/2013/04/03/2013-07382/changes-to-representation-

• f-others-before-the-united-states-patent-and-trademark-office#h-10
• Consolidated Aluminum Corp. v. Foseco Int’l Limited, 910 F.2d 804 (Fed. Cir. 1990)
• Genentech v. Chiron, 75 USPQ2d 1881 (BPAI 2004) (Unpublished).
• IPO Presentation Harmonization and Enforcement of USPTO Ethical Standards in

the Post-AIA Era of June 6, 2013.

• Melissa N. McDonough, “To Agree, or Not to Agree: That is the Question When

Evaluating The Best Mode Preferences of Joint Inventors After Pannu V. Iolab Corp.,” 80 S. Cal. L.R. 151 (2006).

• Unitherm Food Systems Inc. v. Swift-Eckrich Inc., 375 F.3d 1341 (Fed. Cir. 2004).
• MaCharri Vorndran-Jones et al., “Top Five Dangers for the AIA Unwary, 5 Landslide

10 (2013).

• USPTO Publishes Final Rule Adopting New Rules of Professional Conduct,

http://www.patentdocs.org/2013/04/uspto-publishes-final-rule-adopting-new- rules-of-professional-conduct.html

48