America-Israel Patent Law

Reneging on a Notice of Allowance

In US patent practice, the conclusion of ex parte patent prosecution is marked the issuance of a Notice of Allowance, at which point (a) the applicant has three months to pay the issue fee and (b) control of the application passes from the examining corps to the USPTO’s publications branch.  Other than review applicants’ requests for after-allowance amendments, the examiner’s involvement in the application ceases at this point.  That’s not to say that under unusual circumstances, the PTO can’t withdraw the allowance of the application; there’s case law that says until the patent issues, the PTO can withdraw the allowance and place the application back into the examination queue, even if the issue fee has been paid.  But it’s almost unheard of for the USPTO to do this.  Even in the dark days of Jon Dudas’ “quality assurance program”, to the best of my knowledge the quality assurance checks took place before notices of allowance were mailed; applications were not withdrawn from allowance by the QA process.

By now it should be clear where I’m going with this: the procedure in Israel is similar, BUT… In Israel, upon conclusion of substantive examination, the applicant is mailed a notice of allowance (technically called a “notification before acceptance”), telling the applicant to pay the publication fee (now officially called the “acceptance fee”) within a set time period.  The applicant pays the fee, notice of the acceptance is published, and if three months go by without an opposition being filed, voila!  The applicant is now a patentee.

So you would think.  But I spoke with a colleague who recently received such a notice of allowance from the ILPTO, and then a short time later received a letter withdrawing the notice of allowance and re-opening prosecution as a result of the ILPTO’s own QA program.  (The new reference cited, so I am told, was irrelevant.)  Why this couldn’t have been done before the mailing of the notice of allowance is anyone’s guess.  One wonders what would have happened had the applicant immediately paid the acceptance fee, since publication of the fact that the application was accepted is now supposed to take place on the ILPTO’s web site very soon after the fee is paid.

One also wonders if, yet again, the ILPTO has overstepped its authority, although the relevant statutory and regulatory provisions are less than clear on this point.  Section 17(a1) of the statute says that the examiner “shall accept the application if he is convinced that the conditions of this section [viz. that the invention meets the substantive requirements for patentability and the application meets the formal requirements - DJF] are met; in his notice [to the applicant] the date of acceptance shall be noted.”  Section 20 of the statute says that if the invention or the application doesn’t meet the requirements of the statute, the ILPTO will inform the applicant of the basis for rejection; section 21 give the applicant the right to respond.  It’s not clear from the statute itself if a notice of acceptance per section 17 precludes the further issuance of an office action under section 20. 

The implementing regulations aren’t much more helpful in this regard.  Rule 41 sets forth what an Examiner must include in an Office Action; Rule 42 sets out how the procedure for the applicant’s response, and Rule 43 discusses the further examination of the application by the ILPTO after a response is filed, including the issuance of further OAs per Rule 41.  Rule 52 says that if the application has been accepted per section 17 of the statute, the ILPTO will notify the applicant and ask for payment of the acceptance fee, which Rule 52 says the applicant has three months to pay. 

So the statute doesn’t explicitly prohibit the ILPTO from withdrawing a notice of allowance, and substantively, it’s inconceivable that the ILPTO would not be allowed to withdraw a notice of allowance if it became aware of a compelling reason to do so: if the ILPTO is supposed to be the gatekeeper for ensuring that only valid patent patents are granted, it should be able to correct its own mistakes in examination prior to publication of the fact that the application has been accepted.  Indeed, with regard to oppositions, section 34 of the statute explicitly reserves to the Commissioner the ability to refuse to grant an application that has been opposed, even if the opposition itself is withdrawn, on the basis of materials that came to the Commissioner’s attention during the course of the opposition and that “in accordance with which there was no basis to allow the application in the first place”. 

But that same statutory section could be read as saying that for procedural reasons, the grounds on which the Commissioner can withdraw a notice of allowance are limited: the Commissioner is not empowered at that point to reopen substantive prosecution and look for more prior art himself, he can only refuse to grant the application on the basis of materials that came to his attention as a result of the opposition.  This, it can be argued, implies that the mailing of the notice of allowance marks the end of ILPTO’s involvement in looking for prior art (or other defects itself), i.e. that once the ILPTO mails a notice of allowance, substantive prosecution is closed and the ILPTO it cannot sua sponte withdraw the notice of allowance, absent some very compelling reason to so.  It’s hard to believe that a routine QA check that could have been carried out earlier would qualify as a compelling reason.

Regardless of whether or not the ILPTO is empowered to withdraw a notice of allowance as it did in the case of my colleague, conducting QA review after the mailing of a notice of allowance is a really dumb policy, more appropriate for the wise men of Chelm than the PTO of country that’s a world leader in innovation.  

How Not to Advertise Your Docketing Program

Being a patent practitioner comes with certain liability risks.  There are many dates to keep track of (the one-year anniversary of the earliest priority date, dates of public disclosures and offers for sale, national phase deadlines, deadlines in various countries for filing powers of attorney, translations and the like, deadlines for responding to Office Actions, and deadlines for paying renewal fees, to name a few), and if you miss one of them, you can forfeit your client’s rights.  If the value of the lost patent or patent application can be easily demonstrated, and you don’t have the ability to buy forgiving legislation for your client like The Medicines Company’s lawyers did after they missed the deadline for filing for a Patent Term Extension for Angiomax® (bivalirudin), you could be on the hook for a lot of money.  Thus was born patent attorney malpractice insurance.

Of course, an ounce of prevention is worth a pound of cure, so to reduce the likelihood of patent catastrophe, most patent attorneys use a docketing program to warn them of upcoming deadlines.  There are quite a few of these programs on the market, offering various degrees of robustness, flexibility, features and accessibility over a wide range of costs.  But even with the use of the most sophisticated docketing software and the world’s best administrative staff, dates are sometimes missed.  Think of it as probability in action: over thousands of applications, statistically there’s going to be an error from time to time.  The most common cause of missed deadlines – at least to judge from reading the decisions of the Israel PTO in response to requests to revive abandoned patents – is the incorrect entry of a due date in the docketing program.  More expensive programs allow the user to input in a base date and automatically calculate follow-on dates; less expensive programs require the user to enter those follow-on dates himself.  Either way, there’s room for error.

Because of the particular nature of patent practice (as opposed to general law firm practice), it should come as no surprise that patent practitioners themselves were and are involved in the development and marketing of some of the available docketing programs.  Y is such a person.  Y is an Israeli patent practitioner.  He developed his own docketing program and then began marketing it to other patent practitioners.  I’ve no idea how successful that venture has been, but as of this writing his web site includes an advertisement for the product. 

What I found intriguing was not Y’s docketing program, but a recent decision of the ILPTO concerning a lapsed patent under Y’s care.  The PCT application was filed in Australia on December 14, 2005, and Y attended to the national phase entry in Israel on June 24, 2007.  The patent was granted on March 31, 2011.  The applicant apparently entrusted Y to pay the renewal fees, but the renewal fee due at 6 years from the filing date of the application wasn’t paid on time, nor was it paid during the 6-month grace period for such payments.  So the application went abandoned.  Y only became aware of this in 2013, when he paid the 6-year renewal fee in June and was informed that the patent had lapsed more than a year before. 

Y then petitioned the ILPTO to revive the patent.  Under sections 59 and 60 of the Israel patent statute, the Commissioner is empowered to revive lapsed patents if the overdue renewal fees are paid, the Commissioner is convinced that the cause the lapse is reasonable, the patentee did not want the patent to go abandoned, and the petition for revival is filed as soon as possible after the lapse becomes known to the patentee or the party responsible for paying the renewal fees.  According to Y, who signed a declaration in support of the revival petition, the non-payment was reasonable, because Y had mistakenly calculated the renewal fee deadline from the date of national phase entry rather than the PCT filing date, and the other conditions set forth in section 60 were met. 

The Deputy Commissioner denied the petition.  Section 15 of the statute establishes the filing date for Israel patent applications as the day on which the application was submitted to the ILPTO including the name of the applicant, the filing fee, and a description of the invention.  But section 48C specifically says that section 15 doesn’t apply to PCT applications, and that the filing date of a PCT application is determined in accordance with the Patent Cooperation Treaty itself.  Moreover, both the filing receipt and the certificate of patent indicated the filing date as December 14, 2005. 

In short, this wasn’t a case of a mistaken entry in the docketing program, it was a case of a mistaken understanding of the law. The Deputy Commissioner basically said, ignorance of the law isn’t a good enough excuse for missing the renewal fee payment.

She might have added that ignorance of the law isn’t exactly a ringing endorsement for potential buyers of Y’s docketing program either.  Even if this is one mistake that Y is certainly not going to repeat.