America-Israel Patent Law

John Belushi at the Israel Patent Office, or, Court to Israel PTO: Delay to Pay Doesn’t Automatically Mean “No Way”…Even if the Patentee Gives Multiple Stories

I’ve written in the past about petitions to revive Israel patents (or patent applications) that went abandoned for failure to take some action, most often failure to pay a renewal fee.

The most common such situation has been failure to pay the first renewal fee, which is due within three months for the grant of the patent. Whereas the ILPTO normally sends email notices before the deadline for payment of the renewal fees due at 6, 10, 14 and 18 years from filing, in the past it did not send an explicit notice reminding patentees of the fee due within three months of grant. Rather, until relatively recently, the practice of the Israel PTO was to include such notice on the back of the printed copy of the patent certificate, which was sent by snail mail.

This procedure was rife with opportunities for screw-ups: sometimes the certificate wouldn’t arrive (not a surprise in view of the continually declining state of Israel Post); or it would sent to the wrong address; or if it reach the right person, the notice on the back of the certificate would be overlooked. And this explains why it was the first renewal fee that was most commonly missed. (At the urging of yours truly and others, the ILPTO now includes a notice about this first renewal fee in the cover letter that is sent by email with the copy of the patent certificate.)

I’ve also written in the past about the perils of acting pro se (in patents or in anything else), especially when you’re unfamiliar with the relevant statute and regulations.

Enter one Mr. Ron David, who owns an auto body shop where he installs roof racks on cars. Working with a colleague, he developed a kit for mounting the roof rack, and sought to patent this. He hired local counsel to file an Israel patent application (no. 240582; a PCT application was also filed), and prosecuted the application through to allowance.

At that point, apparently in a cost-saving measure, he fired local counsel. And then didn’t pay the first renewal fee. Oops. He only found about the error a few years later, when his colleague told him that competitors were making knock-offs and the colleague found that the patent was no longer in force. So, still acting pro se, Mr. David tried to revive the patent. After several procedural mis-steps, he eventually got the Israel PTO to consider his request, and even got to an oral hearing (this time with re-hired local counsel) in early 2023.

If you recall the movie “The Blues Brothers”, there’s a classic scene (one of many in that film) in which Jake Blues, played by John Belushi, explains to his jilted fiancé (played by Carrie Fisher), who has a loaded machine gun pointed at him, why he didn’t show up for the wedding that her family had gone to much trouble to organize:

“I ran outta gas. I had a flat tire. I didn't have enough money for cab fare. My tux didn't come back from the cleaners. An old friend came in from outta town. Someone stole my car. There was an earthquake, a terrible flood, locusts. It wasn't my fault!! I swear to God!!”

I don’t know if Mr. David has seen this film, but his cumulative explanations to the ILPTO and (then to the district court) about why he didn’t pay the renewal fee on time were somewhat reminiscent of this scene. He said that the patent certificate – the one with the renewal reminder printed on the back where normal people don’t notice it – was sent not to him but to his colleague, who was not responsible for the Israel patent (but who’s address was the one on file with the ILPTO after Mr. David fired his patent counsel, and who was responsible for the patents outside of Israel, and who as noted above was the one who first informed Mr. David of the possible infringement and the lapse of the patent), who didn’t forward the document to Mr. David. And he thought that his colleague would pay the fee (even though – see a few lines above – he also said his colleague wasn’t responsible for the Israel patent). And, being familiar with trademark practice, he assumed that patent renewals were like trademark renewals, once every ten years, so how was he supposed to know that a renewal fee was due so soon after the grant of the patent? Plus, for two years during the corona virus scare, his business wasn’t active. And who would pay all this money to draft, file and prosecute a patent, and then let the thing go abandoned?

Sections 59 and 60 of the statute says that a patent can be revived, provided the Commissioner is convinced that (a) the lapse happened for “reasonable causes”, (b) the patentee didn’t want the patent to lapse, and (c) the reinstatement request was filed as soon as possible after learning of the lapse. Needless to say, on the Jake Blues-type pleadings, the Deputy Commissioner wasn’t convinced that the circumstances surrounding the lapse per se were reasonable.

Here I’ll interject one point. The same regulations that establish the renewal fee dates and amounts also clearly establish that the ILPTO has to send out notices to patentees before renewal fees are due. My reading of those regs is that if the Office doesn’t send such a notice, no renewal fee is due and the patent doesn’t lapse. The ILPTO takes a contrary view and has, through its own case law, conveniently excused itself from the latter requirement, asserting that although it does in fact normally send out such notices, if the Office fails to send out a notice, the responsibility for renewals is ultimately on the patentee, regardless of the ILPTO’s behavior.

Mr. David appealed to the District Court. The ILPTO argued that, given the conflicting versions of facts presented by Mr. David, it was not possible to determine that the cause of the lapse was reasonable (and, as noted in the Deputy Commissioner’s decision of March 2023, presenting conflicting arguments showed a lack of good faith).

Reading through the materials in the file, it’s clear that this was a case of multiple factors leading to the initial non-payment, and that by acting pro se, Mr. David not only caused the initial screw-up (because competent local counsel would have told him there’s a first renewal fee to pay) but messed up his own arguments in the revival proceedings.  On the other hand, the ILPTO’s take seemed rather harsh and formalistic: it’s clear from reading the materials that, indeed, Mr. David didn’t know there was a fee to pay, and had no desire for his patent to lapse. Why WOULD a small business owner prosecute a patent application to grant and then not pay the first renewal fee? The fact that after learning of the lapse occurred, he did a bad job of lawyering for himself (viz. provided conflicting explanations for the non-payment), doesn’t derogate from the conditions of section 60 having been met.

Which is probably why, at the oral hearing in the appeal in September 2023, the District Court judge strongly suggested to the ILPTO that it agree to reinstate the patent, which it did, with caveats that it was doing so only in this particular case, and that really Mr. David had a responsibility to track the status of his patent.

All’s well that ends well, I suppose. It’s worth mentioning that at the court hearing, counsel for the Office argued that upon lapse, the invention became public domain, and by reinstating the patent, “the public” would be prejudiced. That’s an argument that I’ve heard multiple times over the years, and I’ve never bought it. The statute establishes the conditions for reinstatement; it’s not for the ILPTO to add further, extraneous consideration to the mix. Moreover, the statute itself in section 63 includes a carve-out for parties that rely on the lapse to begin practicing the invention or who have made substantive preparations to do so: they can continue to practice the invention even after reinstatement. It seems that paternalism remains part of the mindset of some in the ILPTO.

Initial Israel Patent Renewal Fees (Follow-Up Post) and Mailing Dates/Deadline Dates

In May I wrote about the problem with the way in which the Israel PTO notified patentees of the initial renewal fees that are due within three months of the grant of the patent: by including such notice on the back of the patent certificate, which was (and still is) sent by regular Israel Post, the Office risked the patentee either not receiving the certificate and renewal fee notice (because of the unreliability of Israel Post), or the patentee ignoring the notice because of its being printed on the back of the patent certificate.  I wrote then that there was an easy solution to the problem:

“[T]he Israel PTO already sends the attorney of record an email notice when the patent is granted, which currently reads, “You are informed that the [patent] application has matured into a patent and the Office’s records have been updated accordingly.  The patent certificate will be generated and uploaded to the Office’s web site in the next few days.”  It would take minimal effort to add a sentence to that letter that says, “In accordance with Regulation 86, you are reminded that the first renewal fee is due three months from the date of grant of the patent.”  Such a reminder would likely reduce the number of patents that lapse for non-payment of the first renewal fee(s).”

Evidently someone at the Israel PTO was paying attention, as this morning I received such a notice of renewal as part of an email attachment telling me the patent had granted, which notice included the following language:

For your attention: a renewal fee must be paid within three months of the date of grant of the patent (which appears on the first page of the patent certificate).  This period may only be extended for six months, subject to payment of an extension fee.

Non-payment of the renewal fee in the aforesaid time period will result in lapse of the patent without prior warning!

Additional details regarding renewal fees can be found on the back of the patent certificate.

This appears to be a new and welcome addition to the ILPTO’s standard notification of issuance of the patent.  Of course, the patent certificate wasn’t included with the email, and as of this writing it still hasn’t been posted on in the database, so that’s the next thing the ILPTO can work on.  Nevertheless, this is progress of a sort: it fulfills the ILPTO’s duty to remind patentees – at least those represented by counsel – of the deadline for the first renewal fee.  However, as I noted in the previous blog post, I suspect that most practitioners don’t wait for the ILPTO, and simply docket the relevant dates of their own accord. I don’t know if pro se inventors – the ones most in need of such reminders – receive these kinds of notices by email.

The non-inclusion of the patent certificate led me to discover a discrepancy within the ILPTO’s system.  Notice of the allowance of the patent in question published in the Patents Journal on April 1, which meant that oppositions had to be filed by July 1.  Since July 1 was a Friday, when the Israel PTO is officially closed, the deadline for filing oppositions was by law extended to Sunday, July 3.  This means that the patent should have granted today, July 4, and presumably that’s why the letter I received informing me of the grant of the patent was sent today and not yesterday. 

But when I look at the “nesach” for this patent from the ILPTO database – sort of the official printout of the status of the patent – it shows the grant date as July 2, not July 4, thus foreshortening the deadline to pay the first renewal fee by two days.  I suspect that the ILPTO’s systems that calculate deadlines have been programmed accordingly, but clearly this is a glitch in the system.  I’m curious what the patent certificate itself will say regarding the grant date.  To be safe I docketed for October 2, but the discrepancy could become an issue if someone goes to pay their renewal fee on October 3.

It’s also interesting that the current Patents Journal was published on July 1, which was a Friday (as was April 1 of this year), when the ILPTO is officially closed.  I know that the USPTO publishes its Gazette every Tuesday, regardless of the date – my grandfather had a patent issued by the USPTO on December 25, when the USPTO was clearly closed, so in that respect publication of the Israel Patents Journal on a day when the ILPTO is closed isn’t unusual.  But what will happen when the first of the Gregorian month falls on Shabbat (Saturday)? Publication on that date would be legally and politically problematic.  We’ll see what happens on October 1, 2022.  (January 1, 2022 was also Saturday, but because of the change in the electronic publication format of the Patents Journal, all publications that would have taken place then were pushed off until February 1, 2022.)

Initial Patent Renewal Fees at the Israel PTO: A Problem With An Easy Solution

Patent renewal (or maintenance) fees in Israel are due for five periods of time: for years 0-6, 7-10, 11-14, 15-18, and 19-20 of a patent’s lifetime.  Normally, the fee for the next period is due by the appropriate anniversary of the filing date, viz. at years 6, 10, 14 and 18 from filing, and is payable from three months before the deadline until as many as six months afterward (with the payment of the appropriate extension fee).  (There is also an option to pay all 20 years up front.)  However, the fee for years 0-6, and for any additional renewal fees that accrued during patent prosecution, is not due while the patent application is pending, but rather is due within three months of the grant of the patent, with this deadline also being extendible by up to six months.  Failure to pay the fee results in lapse of the patent; when that happens, the patentee can petition for reinstatement of the patent.

The patent statute itself has little to say about renewal fees: §56 says that in order for a patent to remain in force, payment of such fees must be made “as has been established [in the regulations]”, and §57 establishes the six-month grace period for late payment of renewal fees.  The heavy lifting with regard to renewal fees falls to the Regulations, specifically to regulations 85-88 and paragraph 12 of the second addendum to the regulations, which set forth inter alia the aforesaid five periods for payment of renewal fees and the amount for each renewal fee. 

Regulation 86 explicitly states that “The Registrar shall send a notice to the patentee regarding every period for which he must pay a renewal fee, not later than three months prior to said period.”  Although the ILPTO has for years maintained that this statement is merely exhortative rather than compulsory (an issue beyond the scope of the present blog post), it nevertheless is usually good about sending out such reminders, usually by email to the attorney of record.  Additionally, because the deadlines for payment of most of the renewal fees are predictable (as noted, on certain anniversaries of the patent filing date), it’s easy to program these into a docketing system.

There’s one situation, however, in which the Israel PTO consistently fails to adequately inform patentees of the renewal fee, and that’s for the first renewal fee (or renewal fees, if the patent is granted more than 6 years after filing), which is due 3 months after grant.  Rather than send the patentee (or attorney of record) a notice by email, the ILPTO sends the notice by snail mail.  As I’ve blogged about before, Israel Post is bad, and has been really bad for at least 15 years.  If anyone in the private sector wants to get a letter to someone in Israel, he sends it via private courier, or alternatively via registered mail with the Israel Post, so that when it isn’t delivered to its intended recipient, the sender at least has a record of such.  No one in Israel who wants to be sure a document gets into the hands of the person who’s supposed to get it, let alone that the person receives it in a timely fashion, sends such a document by regular post.

And yet, that’s exactly what the Israel PTO does with its notices about the first renewal fee. 

To make matters worse, that notice is usually printed on the back of the Patent Certificate, which the ILPTO also sends by regular Israel Post.  Inasmuch as the electronic file is now the official record, and the patent certificate appears in the file (usually a few days after the patent is granted), there’s no need to send the physical certificate. But the Israel PTO does, with the reminder about the first renewal fee printed on the back.  Which means that (a) many patentees never receive the notice (since the certificate that appears in the electronic file does not contain the renewal fee reminder on the back), and (b) many patentees who do receive the notice don’t pay attention to it, because it’s printed on the back of the patent certificate.

I suspect that most patent firms in Israel don’t wait for the patent certificate to show up, but instead (a) docket to see that no opposition to the grant of the patent was filed by the deadline to file oppositions, and if no opposition was filed (b) docket to pay the first renewal fee within three months of grant (which occurs automatically upon expiration of the opposition period).  But not everyone is represented by counsel, and sometime inventors try to save money by taking it upon themselves to handle administrative matters.

Given the foregoing, it should come as no surprise that of the petitions to revive patents that lapsed for failure to pay renewal fees, roughly half pertain to lapses that occurred for failure to pay the first renewal fee.  And seeing as how the Israel PTO allocates personnel and office resources to handle such petitions (including to render decisions on the petitions), and how the preparation of such petitions likewise consumes significantly more time and effort than does the paying of the initial renewal fee on time, it would benefit everyone if the Israel PTO would start sending out email notices, reminding the patentee of any renewal fees that are due within three months of grant of the patent.  

This shouldn’t be difficult to do: the Israel PTO already sends the attorney of record an email notice when the patent is granted, which currently reads, “You are informed that the [patent] application has matured into a patent and the Office’s records have been updated accordingly.  The patent certificate will be generated and uploaded to the Office’s web site in the next few days.”  It would take minimal effort to add a sentence to that letter that says, “In accordance with Regulation 86, you are reminded that the first renewal fee is due three months from the date of grant of the patent.”  Such a reminder would likely reduce the number of patents that lapse for non-payment of the first renewal fee(s).

While we’re on the subject of lapsed patents, it is interesting – and inexplicable – that the ILPTO sends the attorney of record a notice when a patent application lapses for failure to respond to a communication from the ILPTO, but that it does not do so when a patent lapses for failure to pay a renewal fee.  Notice of lapse of a patent is only published in the Patents Journal.  I do not make a practice to scour the list of lapsed patents – and the list is published only as numbers of the lapsed patents, without any other identifying information – to see if any of my clients’ patents have lapsed.  Because of this, it’s not uncommon for a patentee to discover the failure to pay a renewal fee when he goes to pay the next renewal fee (due to a notice in his or his attorney’s docketing system, not because of a notice from the ILPTO, since the ILPTO doesn’t send renewal fee reminders for lapsed patents).  It would be helpful for the ILPTO to program its systems to send out notices when patents lapse for non-payment of renewal fees, and not simply publish a list of numbers of lapsed patents.

English Translation of Israel PTO Notice About Work Arrangements Under Coronovirus Shut Now Available

Further to yesterday's blog post, today the ILPTO published an English translation of its notice about work arrangements during the Coronavirus shutdown.

Update March 27: the ILPTO published a further clarification on March 25. English version here. If you're recording a pledge against a patent, the 90-day limit to do so still applies, and the office will record the pledge. If you are a patent practitioner trainee on now unpaid leave, you should read the update.

Updates from Israel PTO Re: Work During Coronavirus Shut-Down

On Saturday night, March 21, the Israel cabinet agreed to reduce the number of public sector employees still working.  Yesterday, March 22, the Israel PTO published a four-page explanation of how it is implementing this decision, which remains in effect until May 1, 2020 or until the ILPTO publishes a new notice, whichever comes later.  [Update, March 24: the ILPTO has now published its own English translation of the notice.]  The main points are that:

• many employees were already working from home, and will continue to do so; registration certificates will continue to issue, and the Patents, Trademarks and Designs Journals will continue to publish at the end of each month;
• the ILPTO will strive to meet its obligations under treaties (e.g. providing PCT search reports on time), and to issue renewal certificates on time, but certain services (recording assignments, licensing new practitioners, notices of formal defects in PCT national stage applications, daily notices of outgoing correspondence) will be delayed at least until after Passover (April 15, 2020);
• the ILPTO will continue to accept submissions electronically and, for those parties permitted to do so, in person or by regular post, but in-person meetings and proceedings before the ILPTO, including hearings in adjudicatory proceedings, will remain in suspension;
• deadlines for filing new applications, responses to office actions and the like will not be held in abeyance, but non-statutory deadlines in adjudicatory proceedings will be suspended;
• applicants or other parties in proceedings before the ILPTO who are unable to timely make submissions as a result of coronavirus-related circumstances may request extensions or reinstatement based on those circumstances, which will be taken into account when deciding whether or not to grant the extension or reinstatement;
• in cases in which the ILPTO has an announced policy capping the number of extensions, that cap will be temporarily be waived, but statutory deadlines (e.g. for opposing a patent application or requesting a patent term extension) cannot be waived;
• in order to allow applicants/owners to file requests for extension/reinstatement, at least until May 1, 2020, no files will be closed for an applicant’s/owner’s failure to take an action, nor will the ILPTO send pre-file closure notices (which in many instances are a prerequisite for closing a file).

We elaborate on each of these below.

There are two ways in which the coronavirus outbreak affects the ILPTO: fewer people are physically in the ILPTO, and by order of the Cabinet, the ILPTO’s workforce needs to be reduced; and parties with matters before the ILPTO may be unable to meet deadlines.  Yesterday’s letter clarifies how the ILPTO is dealing with both of these aspects.

In the main, the ILPTO is attempting to maintain a “business as usual” approach.  Thus the ILPTO will still do intake on new patent, trademark and design applications; examiners will still examine cases, although the pace of examination will slowed; the Office will continue to publish the Patents, Trademarks and Designs Journals each month; and the Office will issue registration certificates, although the Notice recommends that, given possible disruptions in Israel Post, registrants download copies of the certificates.  The ILPTO will likewise strive to meet its obligations under international treaties, such as PCT examination, and it will deal with requests for immediate processing of applications, e.g. due to the inventor’s age. 

However, certain less-critical functions will be suspended altogether: the processing of changes in ownership or the name of the applicant/owner, recording of liens and the like (except for changes in local address for service, which will still be processed); the processing of registration of new practitioners and registration for practitioner examinations (except for complaints against practitioners); the sending of notices regarding formal defects in PCT national stage applications; and the emails that the ILPTO sends to practitioners, informing them of the cases in which correspondence issued, to enable practitioners to track that correspondence (in case a piece of correspondence wasn’t received). 

For over a week the ILPTO has not been receiving the public, and this will continue, which means inter alia that there will be no in-person examiner interviews, nor will any hearings in adjudicatory matters take place.  The notice states that there will, however, be someone answering the telephone during regular business hours. With most personnel remaining at home, it is unclear if callers will be able to obtain the clarifications they seek, even if they get through to the ILPTO.

Perhaps of greater to interest to parties with deadlines in matters before the ILPTO is the question, “Whither my deadline?” 

The first thing to note is that the Commissioner has discretion about granting deadlines in many matters, but certain deadlines are set by statute and cannot be extended.  Specifically, in patent matters, the following deadlines are not extendible:

• for third parties to request immediate examination of another’s patent application per §18(c);
• for filing an opposition to patent a application under §30,
• for payment of renewal fees per §56 and §57,
• for opposing the reinstatement of a patent under §61,
• for notifying the Commissioner of the granting of extension orders for reference patents in the USA and Europe under §64E(e)(2),
• for opposing the grant of a patent term extension (PTE) under §64F,
• for paying the fees to keep a PTE in force under §64M,
• for submitting a PTE application under §64O,
• to oppose under §73(c) the revocation or cancellation of a patent, and
• to oppose a change in the Register under §170(c).

Similarly, the deadlines for opposing a trademark registration and for paying trademark renewal fees per §24 and §33 of the Ordinance cannot be extended, and the deadlines for certain actions in design registrations are likewise not extendible.  (From the wording of the Notice, it sounds like the Commissioner would like to have the authority to extend some of these deadlines, but knows that he doesn’t, and may seek a change in legislation at a later time to address this.)

Second, in all other cases the Commissioner has discretion to grant extensions.  In some instances, though, he has published notices according to which, a priori, he has limited the number of extension available.  Thus, for example, during the substantive examination phase of a patent application, the ILPTO’ stated policy is that it will grant extensions without a showing of cause upon the payment of a fee, but that it will not grant more than four months of extension at one time, and not more than 12 months’ extension total over the course of examination.  The Notice says that at least until May 1, 2020, these caps will not be emplaced, and that extension periods falling within the period of March 22, 2020 through May 1, 2020 inclusive will not be included in capped period.

In some instances in which the Commissioner has discretion to grant an extension or to reinstate an application or registration, there is a criterion for granting the extension/reinstatement, either by dint of the statute or self-imposed by the ILPTO.  Thus, for example, a patent applicant who fails to file an application within the priority year may request an extension for the priority claim, and per §164 the Commissioner may only grant such extension if he determines that the failure to timely file in Israel was due to circumstances over which the applicant had no control and that could not be prevented.  In other instances, a showing of “reasonable cause” must be made.  The Notice points out that inability to file a document or pay a fee on time due corona virus-related circumstances may constitute circumstances that amount to “reasonable cause” or circumstances over which the applicant had no control, but that each case will be judged on its own merits.  Requests for extension on such basis may be made either before the initial deadline, or retroactively.

The Notice states that deadlines in adjudicatory proceedings are suspended at least until May 1, 2020 or further notice, whichever is later, but that the adjudicators will continue “to work as normal”, which we understand to mean that decisions in cases in which all hearings and submissions have concluded will continue to issue.

The Notice says that, in any event, in order to allow parties that have missed deadlines to make their case for extension/reinstatement, until May 1, 2020 or further notice, whichever is later, no files will be closed for failure to take a required action, nor will the ILPTO send pre-file closure notices, which in many instances are a prerequisite for closing a file.

Finally, it is to be noted that the ILPTO would have been closed anyway for Passover, from April 8 through April 15, 2020, inclusive.  Hence any deadlines that fall on these dates would in any event have been statutorily deferred to April 16, 2020, and thus filings or payments due on these dates will be considered timely if made on or before April 16, 2020.

 

Update, March 27:

(a) the ILPTO published an English version of its March 22 announcement.

(b) on March 25 the ILPTO issued a further clarification in both Hebrew and English: since the statute imposes a 90-day limit to record a pledge against a patent, the ILPTO will continue to process the recording of such pledges. And if you're a patent practitioner trainee and you're now on unpaid leave, you should read the announcement

Express Abandonment of an Israel Patent Application – A(nother) Disconnect Between the Statute and the Electronic Filing System

This post arises from a question that was put to me by a colleague.  He wanted to expressly abandon an Israel Patent Application, but when he went into the electronic filing system to do so and chose “cancellation of patent” as his action, the system told him, “Nyeah nyeah nyeah, you can’t do that in this application”.  (Ok, the teasing was only implicit, but the result was the same.) 

It turns out the system wasn’t wrong.  Section 21B of the statute says in black and white that up until the time of grant, an applicant can cancel (לבטל) his patent application.  Section 73A says that a patentee may request that the Commissioner erase or cancel the patentee’s patent (בעל פטנט רשאי לבקש מהרשם למחוק או לבטל פטנט שניתן לו).

Before continuing, a few words about cancellation/erasure of a patent. 

First, the difference between cancellation (bitul) and erasure (mekhika) is the former has the effect that the patent was never granted (73A(a); it's like the annulment of a marriage), but erasure only takes effect from the day on which the request to erase was filed (73A(b)).  It’s not hard to envision situations in which a patentee would prefer one to the other. 

Second, third parties can oppose the cancellation or erasure of a patent.  I’ve never understood the rationale behind that provision, but I suppose it’s there to protect, say, someone who claims he’s the actual owner of the patent and will be harmed by the cancellation/erasure thereof.  And for those US practitioners who were apoplectic about last year’s SCOTUS decision in Oil States, which said that patents aren’t property but a franchise, the ability of a third party to object to a patentee disposing of its property suggests that a similar situation obtains in Israel.  But I don’t think that question has been tested yet.

Third, third parties can request cancellation (but not erasure) of a patent (73B), whereas they can't request cancellation (or erasure) of an application, presumably because they can oppose the grant of the patent, inter alia on grounds that they are the actual owner of the patent. 

Now back to our story.  Clearly, 21B controls in my colleague’s situation, and he should be able to cancel his patent application.  So what was the problem?  Well, let’s look at the choices listed in the electronic filing system.

The first choice is בקשה לביטול פטנט על ידי בעל הפטנט לפי סעיף 73א, request to cancel a patent by the patentee per section 73A.  This apparently is what my colleague chose, and since he was dealing with a patent application rather than a granted patent, the system didn’t let him choose this action for his patent application.  When properly selected, this action requires payment of a hefty fee (over 4000 NIS).  Notwithstanding the title, which refers only to cancellation, presumably this action covers both cancellation and erasure, and the patentee is expected to explain in its accompanying letter (which the EFS requires) which action it seeks. 

Curiously, there is no choice for the corresponding cancellation action by a third party per 73B.  So I’m not sure how, as a third party, one would file a cancellation request, since according to the regulations such requests must be filed via EFS.

The next action listed in the drop-down list is בקשה להזנחת בקשת פטנט, which can be translated as “request to abandon a patent application”.  This action can be selected for a patent application, and there's no fee associated with it.  Presumably this is how an applicant cancels his application per 21B.  But the description is confusing, because the word used in 21B is ביטול, “cancellation”, whereas the word used in the EFS description is להזניח, “to abandon”.  But neither the word להזניח nor any variations of it - no words with the root זנח - appear in the statute, and the EFS description doesn’t mention 21B.

This confusion is heightened by the next choice: בקשה לסגירת תיק לפני פרסום לפי 16א, “request to close a file before publication under 16A” (i.e. before 18-month publication).  As with the “Request to abandon a patent application”, no fee is required for this action either.  But what's the difference between a request to close a file before publication, and abandonment?  If one abandons the application before publication, then it shouldn’t publish, right?  Perhaps the ILPTO fast-tracks the “close file before publication” action.

Moreover, as with “abandonment”, the word סגור (“close”) and it variants only appear in the statute with respect to judicial-type proceedings that are conducted behind closed doors. (The word מסגרת, “framework”, which shares the same root, סגר, also appears a few times in the statute.) 

I also note that we blogged a few years about someone who closed his file before 18-month publication, and the ILPTO published it nevertheless.  So there’s no guarantee that closing a file before the 18-month publication date will keep the file out of the public eye.

Reminders From the Patent Office Before Your Case Goes Abandoned: Has The USPTO Changed Its Policy?

It’s not unusual for a patent applicant to lose interest in an application. I see this most often in the context of failed clinical trials for a new drug; without a product to protect, there’s usually no reason to continue to pursue patent protection for that product.  But there can be other reasons why applicants lose interest in a case. 

When this happens, practitioners typically don’t actively abandon the application, but simply don’t respond to any outstanding matters from the patent office.  And then they wait for a notice of abandonment. 

Sometimes, of course, the failure to respond wasn’t planned, but was due to an oversight on someone’s part, such as something didn’t get docketed, or something was docketed with the wrong date, and a deadline was missed.  And then the receipt of an unexpected notice of abandonment causes heart palpitations and a spike in blood pressure, among other things.    

Some jurisdictions are nicer than others about helping applicants avoid abandonments.  The practice in Israel is that, in most instances, if a maximally extended deadline is approaching during patent prosecution, the ILPTO sends a notice noting that the deadline is approaching, giving the applicant an additional month to respond (provided all extension fees are paid by the time the response is filed). This is an applicant-friendly approach, since it serves as an additional check, beyond a firm’s own docketing practices, to help prevent unintended abandonments.  And if the applicant plans to abandon the application, the notice can be ignored.

The USPTO, at least until now, has been not been as applicant-friendly.  The usual pattern has been for the maximally extended date to pass, and then for the USPTO to send out a notice of abandonment within a few weeks thereafter.  If the abandonment was unintentional, this gives the applicant notice so that the applicant can petition to revive the application, but it doesn’t give the applicant any additional reminders to help prevent the abandonment. 

In one way, the USPTO has even been worse: sometimes, after the drop-dead date has passed, and before a notice of abandonment has been mailed, an examiner will call and say, “Hey, did you know your application went abandoned last week?”  Practitioners hate those calls, because a record of the call will go in the file history, and now it’s clearly established when the practitioner had notice of the abandonment.

Which is why I was surprised yesterday to receive a call from an examiner a few days BEFORE a drop-dead date.  We’re aware of the deadline and planning to respond, and have been delaying the response for various reasons, but the warning was appreciated. 

Then I called a colleague to share my story, and he said a similar thing happened to him last week: a pre-abandonment call from a USPTO examiner.

Which leads me to wonder: has the USPTO changed its policy?  And if so, why?

ILPTO Tells Inventor His Application Won't Publish, Then Publishes The Application Anyway

In July 2012, Israel enacted legislation facilitating publication of patent applications 18 months after the earliest priority date.  Unlike in the USA, where the move to 18-month publication did not have retroactive effect, in Israel the decision was that all pending applications would be laid open to the public 18 months after the earliest priority date. No opt-out for already-filed applications was provided, nor was there the possibility for filing a new application with a non-publication request. The only provision for preventing publication of one’s application was, and remains, to abandon the application before publication occurs.

“Publication” in this context doesn’t really mean publication in the sense of the ILPTO printing up a document.  What it means is that on or shortly before the last day of the calendar month in which the 18-month date falls, the ILTPO publishes its Patents Journal online, which lists newly publicly-accessible applications.  Simultaneously with publication of the Journal, the application file as it appears in the ILPTO’s public database is made accessible.  Thus preventing public access to an abandoned application doesn’t really require much work on the ILPTO’s part, and abandonment should be possible relatively close to the date of publication, since all that needs to happen is for the application file to remain invisible online.

In practice, the ILPTO sends applicants a letter about a month before the scheduled publication, informing them that they have 14 days to abandon the application in order to prevent publication.

Acting pro se, Zamir Tribelsky filed patent application no. 220352 at the ILPTO on June 13, 2012, several weeks before the “we publish all applications” legislation was enacted. Under the law at the time he filed, the application file would only become public at the conclusion of examination, after payment of a publication fee. Even after the statutory amendment took effect, as a new filing with no priority claims, the application was due to be made publicly available in late December 2013, when that month’s Patents Journal published.

On December 2, 2013, the ILPTO sent a letter to Mr. Tribelsky, telling him that the application was scheduled to be made public on December 31, 2013, and that if he wished to prevent its publication, he needed to notify the ILPTO accordingly within 14 days, i.e. by December 16, 2013.  Download Tribelsky IL 220352 notice of publication

On December 9, 2013, within the 14-day window, Mr. Tribelsky informed the ILPTO that he wished to abandon the application so that it wouldn’t publish. Download Tribelsky IL 220352 letter to ILPTO 2013-12-09

On December 10, 2013, the ILPTO sent Mr. Tribelsky a letter confirming that the application had been cancelled.  Download Tribelsky IL 220352 letter from ILPTO 2013-12-10

And despite that letter, on December 31, 2013, the ILPTO published notice of the application in the Patents Journal and opened the file to the public, where it is still visible today.

Mr. Tribelsky is not my client. I’ve no idea if his invention was worth anything, or if his patent application was well-drafted, or, if granted, if it would have provided commercially valuable protection. But I do know through an independent source that Mr. Tribelsky was unaware of the publishing of his abandoned application until long after that publication had occurred. So if he had dreams of re-filing his application at a later date, the Israel PTO destroyed that possibility.

The treatment of Mr. Tribelsky by the Israel PTO contrasts sharply with the image the ILPTO likes to project that it is a truly modern patent office.  To hear the ILPTO tell it, it is an office with modern computer systems, including a wonderful e-filing system, so wonderful that everyone except pro se individual applicants are forbidden from filing any other way. 

However, the publishing of an abandoned application, contrary to law and contrary to what the ILPTO indicated to the applicant, so as to adversely affect that applicant's rights worldwide, is entirely consistent with the reality of the ILPTO's computer systems. The e-filing system, to put it generously, leaves much to be desired, on many levels. The uploading of documents to the public database, whether those documents were filed by the e-filing system or generated by examiners, is done manually, so that sometimes documents are simply never loaded into the database. The public database itself is subject to manipulation (I had a case last year where a document that was in the database one day was gone the next).  And there is no way for filers to view the application files for their own unpublished applications, i.e. there is no corollary to the USPTO's private PAIR.

This is why, notwithstanding my lack of knowledge of the particulars of Mr. Tribelsky's case, if he was my client, I would recommend suing the pants off the ILPTO. Not because he'll get lots of money: although proving negligence on the part of the ILPTO in this case is a slam dunk, putting a monetary figure on the damage caused will be difficult if not impossible.  No, I would recommend suing the ILPTO because someone needs to get it through the heads of the higher-ups at the ILPTO that no matter how great the degree of computerization and automation, any system involving people is fallible, and making the ILPTO a defendant in such a suit would most definitely get the ILPTO’s attention, not to mention the attention of the people in the Justice Ministry to whom the ILPTO Commissioner reports.  And as a result of that, maybe the higher-ups will realize that redundancy – say, by allowing people to file applications and responses in paper, by fax, as well as through an electronic filing system – is something to be embraced, not eliminated.

 

Up Yours, Inventor: USPTO Improperly Publishes Abandoned Application (or, Why Doesn’t Anyone at the USPTO Know How to Read?)

This is the story of a US patent application that went abandoned and thus shouldn’t have been published, but which the USPTO published nevertheless because of an improper benefit claim, a benefit claim that prima facie was improper but that the USPTO didn’t bother to check.

A well-known feature of the US patent system is the ability to claim the “benefit” of an earlier-filed US application, either a provisional or a non-provisional. This is what gives rise to the ability to file continuation applications ad infinitum. There are only two substantive requirements in claiming the benefit of an earlier US application:

1. there must be at least one common inventor between the earlier- and later-filed applications, and
2. there must be at least one day of co-pendency between the applications. See 35 USC §119 and §120.

It’s also well-known that unpublished, abandoned US patent applications remain unpublished, unless they serve as a basis for a benefit claim in a later-filed, subsequently-published application. In such cases, the earlier, abandoned application is supposed to be made available to the public.

But what happens if an improper benefit claim is made in a later-filed application?

USSN 13/010796 was filed January 11, 2011, without fees and without inventors’ declarations. No inventor was named (neither an application data sheet (ADS) nor an application transmittal form was filed), although the EFS acknowledgement form lists one Shmuel Sternklar as the inventor; presumably this name was manually entered when the application was filed via EFS. The title of the application was “METHODS AND SYSTEMS FOR MEASURING THE FREQUENCY RESPONSE AND IMPULSE RESPONSE OF OBJECTS AND MEDIA”. On February 3, 2011, the USPTO mailed a Notice of Missing Parts, asking for the fees and other documentation within two months, but no ADS, fees or declarations were ever filed or paid. This resulted in abandonment of the application, the Notice of Abandonment being mailed in October 2011. Note that the USPTO’s view is that the abandonment was effective as of the date of failure to comply with the Notice of Missing parts, i.e. April 4, 2011.

On March 8, 2011, USSN 13/043,203 was filed. The transmittal form filed at the time listed one inventor, McKelvey, and stated that this application was a CIP of USSN 12/903753. The title of the application was “Integrated read head device”. The body of the application included the requisite statement about benefit claims, including a benefit claim to the aforementioned USSN 13/010796, filed January 11, 2011. On April 25, 2011, a declaration from the sole inventor, Jim McKelvey, was filed, which included several benefit claims, among them a benefit claim to said USSN 13/010796. On May 4, 2011, a filing receipt issued, listing the benefit claims, including the benefit claim to USSN 13/010796. In PAIR, the “continuity data” likewise lists a benefit claim to USSN 13/010796. See the screen shot below. The ‘203 application eventually matured into patent no. 8,573,487, which is assigned to Square, Inc.

It’s clear to anyone with a brain that the benefit claim to USSN 13/010796 is a typo: the ‘796 and ‘203 applications list different inventors, and that alone should have been a red flag for the USPTO. Moreover, the two applications have different titles, different numbers of pages, completely different drawings, and completely different texts. (What was meant instead of USSN 13/010796 may have been 13/010976, also filed on January 11, 2011, and which lists Jim McKelvey as one of the four inventors.)

Unfortunately, brains are a commodity in short supply in many parts of the USPTO. The mismatch between the ‘203 and ‘796 applications was of no concern to the PTO, which clearly didn’t even bother to check the benefit claim, and proceeded to make the file wrapper of the unpublished, abandoned ‘796 application available on public PAIR when the ‘203 application published on April 19, 2012.

Although in the present case, it doesn’t appear that any damage to the ‘796 applicant ensued as a result of the USPTO’s unauthorized publication of that that application (for reasons we don’t go into here), it doesn’t take much imagination to realize the potential damage that can be caused by such unauthorized publication. Suppose, for example, that the inventor of the ‘796 application assumed his application would remain secret, didn’t discuss his invention with anyone, and re-filed the ‘796 application as a new PCT application on April 20, 2012. Thanks to the USPTO, he would have no chance of getting patent at the EPO or in most other countries, because his now-published-despite-being-abandoned ‘796 application became public the day before. That’s absurd, because unauthorized publication could easily have been prevented by the USPTO, had it troubled itself to take a minute to check for the two statutory requirements for a benefit claim, co-pendency and a common inventor.

The USPTO’s dereliction of duty in this case is even more astounding given the USPTO’s predilection for harassing applicants about far more minor issues, such as second-or-later ADSes that are “improperly” marked to show corrections, or the omission of a status identifier from one claim among many in an amendment. Those minor issues have no impact on the potential secrecy of one’s application. As the present case illustrates, however, the abandonment of one’s own application, an application to which that applicant hasn’t made any benefit claim in a subsequent, published application, is no guarantee the USPTO won’t publish the abandoned application. That’s a disconcerting thought for us patent practitioners.

A question worth considering is, Would the result have been different had the applicant expressly abandoned the ‘796 application, rather than just not pay the fees? We don’t know the answer to that one, but the guess is that the answer is no: as long as the follow-on application was filed within one year of the filing of the earlier application, the later application can benefit from the earlier application, even if the earlier application was abandoned.

For the later inventor, McKelvey’s, there are also potential issues. If it was important to receive the benefit claim to whatever application other than the ‘796 application was intended, then the ‘203 applicant has a problem, as it is too late at this stage to make such a benefit claim. But an interesting question also arises with respect to the ‘203 applicant’s duties toward the ‘796 applicant. Ostensibly, the ‘203 applicant had no duties toward the ‘796 applicant. Yet had the ‘203 applicant carefully checked its papers – at the very least, the filing receipt received two months after the filing of the application – it would have discerned that an incorrect benefit claim was being made, and taken corrective steps, before any damage was caused to the ‘796 applicant by the unauthorized publication of that application, thus serving both its own interests in perfecting the correct benefit claim, and the interests of the ‘796 applicant. Certainly, the USPTO and the ‘203 applicant were better positioned than the ‘203 applicant to mitigate the harm before it occurred. Applicants who allow their cases to go abandoned before publication shouldn’t have to check to see if any later applications improperly claim the benefit of the earlier, abandoned case.

Disappearing Document Demons: Israel PTO Removes Document, Changes Online Record

One of the nice things about the “electronic age” is that instead of having voluminous paper files to keep records, you can store all those documents on a drive that’s smaller than your hand.  This observation has not been lost on the USPTO or the ILPTO, which now both maintain official patent file records as a series of 1’s and 0’s on some suitable storage medium.  One problem with such records, however, is the ease with which they can be tampered. 

A common example of such tampering, familiar to many who file electronically at the USPTO, is the re-coding of submissions by the USPTO.  When you file a document via EFS, you have to provide a brief description of that document (or its constituent parts) from among a closed list of choices offered by the USPTO.  After you’ve submitted your document, some faceless, nameless creature reviews your submission, and if they don’t like the way you’ve coded it, they’ll re-code it themselves.  Sometimes this makes sense: if you accidentally indicated that a new set of claims was an information disclosure statement, it makes sense to re-code. But sometimes there seems to be no reason for the re-coding, or the re-coding is just wrong.

This morning, however, I discovered a more serious form of tampering, carried out by the Israel PTO.  Perhaps some other time, I will provide the whole story, but the short version is this: on May 17, we received via email a letter in which the ILPTO said an application of ours had gone abandoned for failure to file a response.  That was wrong: a response had been filed on March 29.  We immediately pointed this out to the ILPTO by phone and in writing, and included in our response to the notice of abandonment (a) a screen shot of the ILPTO’s web site, showing the filing of a response on March 29, and (b) a copy of the response we filed on March 29, downloaded from the ILPTO’s web site, bearing the fax imprint and the “received” stamp of the ILPTO.  Below is a partial screen shot from the ILPTO database taken on May 17.  Note the last entry, erroneously labeled “Application for extension” – this was actually the response to the OA.  

This morning I took a look at the ILPTO’s web site, and the March 29 entry had been removed.  Here’s a partial screen shot of the record as it now appears.  Note no March 29 entry, but the May 17 entry is there:

So the ILPTO effectively expunged the March 29 letter from the record, or at least removed the indexing of that letter: a copy of the March 29 letter actually appears in the pdf of the documents filed on May 17, which as of this morning were still accessible.

Is this just run-of-the-mill slipshod work by the people who maintain the ILPTO database (who regularly mis-code the descriptions of the entries), or is it a deliberate attempt to remove part of the file history?  We don’t know.  Aside from reinforcing the self-evident need maintain your own records, the episode demonstrates the wisdom of documenting the mercurial records of the PTO.

And it also illustrates why the ILPTO's intention to force everyone to file patent applications electronically, instead of allowing for filing in paper, fax, or electronically, is folly.  But that's a future blog entry.

(Readers familiar with Israel patent prosecution will note that the penultimate entry shown above, a March 10 letter from the ILPTO warning of potential abandonment of the application for lack of response, was also sent prematurely.  That's a common problem with the ILPTO but one that is readily remedied.  Also, the May 17 ILPTO letter was not uploaded to the web site prior to its being sent to us, which is probably a good thing considering it was sent in error.)

"All Our Patents Are Belong To You"

Yesterday Elon Musk of Tesla Motors put up this blog post, in which he is apparently trying to say that as long as he's in charge, Telsa won't enforce any of its patents, because he wants to encourage others to develop sustainable transportation.  (That reading of it seems to be consensus among tech business writers, such as Will Oremus at Slate.)

Inasmuch as none of the big automakers are trying to copy Tesla or even make a serious run at the non-hydrocarbon burning vehicle market, a point that Musk makes in his post, there seems to be little downside to taking this stance, and far be it for me to second guess his business strategy.  As a lawyer, however, I ask myself if his promise is backed up by action.  For example, by dedicating Tesla's patents to the public, something that can be done through the USPTO. 

A quick, non-exhaustive sample out of the over 100 US patents issued to Tesla Motors indicates that so far, such a step hasn't been taken.  For instance, as of this writing, US 8421469 is still listed in the assignment listings as being owned by Tesla Motors, and there is nothing in PAIR showing that the patent has been dedicated to the public.  Same thing for US 7741750, which was renewed last year, (and along with ownership by Tesla Motors shows with a security interest on record to Midland Loan Services, Inc.)  Ditto for US 7404720.  The same attorney, with his address given as Tesla's Palo Alto addressm, is listed as the contact person for all three patents.  

 

I do not doubt Mr. Musk's sincerity, and perhaps his online statements would be construed by a court as constituting a dedication the public, or an offer for a non-royalty bearing license, or a covenant not to sue.  But until there's something in the record of the patents themselves to corroborate his statements, it's hard not to advise a client thinking of using technology covered by Tesla's patents to obtain written permission to do so before proceeding.  Then again, as my brother the US patent litigator noted, the announcement says "Tesla will not *initiate* lawsuits against anyone who, in good faith, wants to use our technology", language which implies that Tesla wants to reserve the right to sue if sued, or if it feels someone is using the technology for purposes that Tesla doesn't approve of.  So this statement may be all that we see from Tesla on the matter.  

 

On the humorous side, for those of you who remember Highland Applicance (of blessed memory), the title of his post, "All Our Patent Are Belong To You", reminds me of this classic commercial:

 

Fee-shifting, post-grant proceedings and attorneys' fees

So many things going on in the patent world here and in the USA to write about, but so much work, so little time to blog. 

There’s been a lot of talk lately about imposing fee-shifting in US patent cases, with Judge Rader encouraging district court judges to be more liberal about award attorneys’ fees, Supreme Court oral arguments this week about fee-shifting, possible changes to the pleading requirements in patent cases per the Federal Rules of Civil Procedure, and Congress contemplating several bills that would impose some sort of a “loser pays” system in patent cases.  Chances are if you’re reading this blog you’re already familiar with these issues, and if you’re not then have a look at Patentdocs, PatentlyO or one of the other popular patent blogs where these issues have been discussed frequently in recent months.

This post is about a different aspect of the “loser pays” notion, one that I got to thinking about after David Hricik pointed it out a few weeks ago: in post-grant proceedings before the USPTO (formerly called re-examination, now going under a variety of names thanks to the AIA), there’s no provision for fee shifting, and if you think the post-grant proceeding was brought frivolously, you can’t even sue in court for abuse of process or malicious prosecution.  So some people are now saying that a secondary troll market has sprung up, in which patent holders who were victorious in court find themselves being threatened by people or shell corporations, who say they’ll institute post-grant proceedings at the PTO to challenge those same patents unless the patent owners pay tribute.  What goes unsaid is that without the threat of misconduct sanctions in the PTO proceedings, it’s a lot easier to cheat.

Israel has two ways to challenge patents before the PTO: in post-examination, pre-grant oppositions; and in post-grant cancellation proceedings.  The two types of proceedings are basically the same, except that procedurally the post-grant challenger has to come in with all guns blazing – i.e. he opens the proceedings by filing both his pleadings and written evidence at the same time – whereas the pre-grant opponent merely needs to make some generic pleadings and can file his written evidence much later.  In either case though, the ILPTO treats the proceedings as being akin to court proceedings, and imposes costs on the loser (what in the USA are called attorneys’ fees, plus in some cases expert witness fees). 

Traditionally, the ILPTO pretty much treated those costs as lip service, awarding attorneys’ fees far below the actual amounts spent.  Coupled with the low cost of filing an opposition, in certain industries this meant that certain local companies almost routinely opposed patent applications of certain foreign companies.  It just made good business sense: the mere filing of the opposition would delay grant of the patent by a few years, during which time there was no patent for the applicant to enforce, and when all was said and done the opposer would be subject to maybe a few thousand shekels’ penalty, at worst.  At best, the applicant would fold or the ILPTO would determine that a patent shouldn’t be granted, in which case the applicant would have to pay something to the opposer.

In the last 8-10 years, there has been a rise in the amounts the ILPTO has been willing to award. Although I haven’t done an empirical study (any law students out there looking for a good project to research?), it appears to me that the large awards have invariably been given to challengers who prevailed in oppositions to patent applications.  This just gives more impetus to parties here to oppose.  And while there’s not a “shake-down” industry here as far as I know, there’s not really a disincentive to oppose either.

This brings us to a recent decision involving one of Israel’s serial opposers, Unipharm.  Unipharm routinely opposes patent applications of large, foreign pharmaceutical companies.  It’s a strategy that has worked well for Unipharm, and if anyone were to call Unipharm an “opposition troll”, it’s response would probably be, “Our oppositions are meritorious, as evidenced the fact that we win many of them.”  One of the unusual aspects of Unipharm’s oppositions is that it handles many of them largely pro se, at least during the initial phases of the opposition.  In the case at hand, Unipharm opposed Lundbeck’s patent application no. 173788; shortly after Unipharm filed its pleadings, Lundbeck withdrew the patent application.  For purposes of awarding fees, the ILPTO treats such a withdrawal as a loss and says that the applicant has to pay.  (I may post on the propriety of that arrangement another time).  Unipharm then asked for an award of costs: 40,000 shekels for the time of the company’s general manager (for 80 hours of work invested in the opposition), 1500 shekels for secretarial time, and 2000 shekels for the opposition filing fee.  

The Commissioner ruled that Unipharm was only entitled to 3500 shekels, 2000 for the fee and 1500 for secretarial time.  He reached this conclusion on the basis of two primary factors: first, since the GM was a salaried employee, his work on the opposition was part of his regular pay and therefore the company wasn’t entitled to compensation for what he did in connection with the opposition; and second, because Unipharm hadn’t brought any sort of detailed breakdown of the time or expenses involved.

It’s unclear whether this decision represents a temporary departure from the general trend of awarding higher costs to opposers who prevail in ILPTO oppositions, or signals an actual change in the trend in the opposite direction.