America-Israel Patent Law

The Law Is For Chumps, Not For Cool Institutions Like The Israel Patent Office

Yesterday I discussed the ILPTO’s new policy requiring applicants, in certain situations, to submit to the ILPTO certified copies of their own Israel priority documents, notwithstanding the fact that the ILPTO is already in possession of those documents. 

Apparently the ILPTO is actively looking for ways to reach greater heights of inanity.  A colleague has now related that the ILPTO will not provide him with a certified copy of an issued patent because he is neither the agent of record nor the applicant.

That position doesn’t just defy logic.  Someone at the ILPTO needs to go back and read the patent statute, section 168 of which says:

168.

עיון לציבור וקבלת נסחים מאושרים

(א) הפנקס והמסמכים שיש לשמרם לפי סעיף 167 יהיו פתוחים לעיון הקהל; אולם מסמכים הנוגעים לבקשת-פטנט שעדיין לא פורסמה לגביה הודעה לפי סעיף 16א או לפי סעיף 26, לפי המוקדם, לא יהיו פתוחים לעיון. (ב) כל אדם יהא זכאי לקבל נסח מאושר בחותם הלשכה מכל דבר שבפנקס או מהמסמכים הפתוחים לעיון לפי סעיף זה אם ביקש זאת בדרך שנקבעה ואם שילם את האגרה שנקבעה.

168.  Public Inspection and Certified Copies

(a)          The Register [of patents] and the documents that must be retained [by the Office] per section 167 shall be open to public inspection; however, documents pertaining to a patent application for which a notice per section 16A or 26 has not yet been published [i.e. which has not yet been opened for public inspection], whichever is earlier, shall not be open for inspection.

(b)          Any person shall be entitled to obtain a certified copy, impressed with the seal of the Office, of anything in the Register or from the documents which are available for public inspection in accordance with this section, if he so requested in the manner to be prescribed [in the Regulations] and paid the prescribed fee.

If that’s not a clear instruction, you shouldn’t be working at the ILPTO.

Even without that particular part of the patent statute, my colleague would still be entitled to have the ILPTO provide him with a copy of the patent (presumably certified as being a true and correct copy from the ILPTO’s records) under the Freedom of Information Act (חוק חופש המידע).

Ah, who cares? What’s a little refusal to follow statutory instructions between friends?

Patent Eligibility of Computer-Implemented Inventions at the ILPTO

Earlier today, the U.S. Supreme Court heard oral arguments in Alice Corporation v CLS Bank.  The question before the court is whether or not an otherwise patent-eligible invention becomes patent-ineligible if the claim recites that the invention is implemented on a computer.  There's plenty of coverage of that case elsewhere.  Of interest to applicants in Israel is a recent decision of the Israel Commissioner of patents in which this same question was addressed.

The case concerned Israel Patent Application No. 190125, the national phase of PCT/IL2006/000921 (WO 2007/03198).  (Theoretically, the Israel application has been published online and its file history visible over the internet, but the ILPTO still hasn't gotten around to posting any of the documents online.)  After several rounds of prosecution during which the examiner refused to allow the application, the applicant amended the claims to match those of the corresponding US 8199935, and asked that the application be allowed pursuant to Section 17(c) of the statute.  

As has been discussed on this blog before, 17(c) is meant to reduce the ILPTO's workload, by allowing it to piggyback on the work of other offices it respects with regard to novelty, inventive step, sufficiency of disclosure and unity of invention.  17(c) does not overcome patent-eligibility issues, and the statute reserves to the Commissioner and the head examiner the ability to refuse a 17(c) request if the Commissioner finds an undefined "special reason" not to grant the request.   

In the present case, Examiner said that the new claims (below) were not directed to a patent-eligible invention, being directed "entirely to the field of software...and therefore being no more than an abstract application of a pure thought process and/or a business method..."   

1. A system for facilitating access to multiple audio layer items over a communication network comprising:

a network accessible media database, connected to a communication network, which stores multiple audio layer items each having a plurality of separate and different audio layers which are independently accessible; and

at least one subscriber application for receiving a user selection of at least some of said multiple audio layer items, connecting to said media database, and receiving at least some of said plurality of audio layers;

 

wherein said at least one subscriber application having a mixing module which digitally synchronizes and mixes said at least some audio layers to create an audio remix representing a mixed digital audio signal.

16. A subscriber application for facilitating access to multiple audio layer items via a communication network, comprising:

a port for communicating with a media database via a communication network; and

an interface configured to allow a user to select a multiple audio layer item from a plurality of multiple audio layer items each having a plurality of separate and different audio layers and to address separately at least some of said plurality of separate and different audio layers of said selected multiple audio layer item; and

a mixing module configured for digitally synchronizing and mixing at least some of said plurality of audio layers to create locally, in the memory of a computing unit, a remix representing a mixed digital audio signal.

19. A remote sale system for facilitating access to layered media items, said remote sale system comprising:

a connecting device for connecting a plurality of customer computers located at remote sites to a central computer associated with a database of a plurality of layered audio items each comprising a plurality of separate and different audio layers;

a management device for receiving, via a network from a plurality of remote client terminals of a plurality of potential customers, a plurality of requests each to separately access at least one of a plurality of audio layers of a selected layered audio item of said plurality of layered audio items and providing, in response to each said request, a separate access to respective said at least one audio layer of said selected layered audio item, each said audio layer is associated with a price; and

a purchasing device for debiting said plurality of potential customers according to said separate access and respective said price.

23. A system for facilitating access to multiple audio layer items over a communication network comprising:

a network accessible media database, connected to a communication network, which stores a plurality of multiple audio layer items such that each layer of each said audio layer item is independently accessible; and

at least one subscriber application for receiving a user selection of at least one of said multiple audio layer items, connecting to said media database, and receiving said first multiple audio layer item, said at least one subscriber application having a mixing module configured for digitally synchronizing and mixing at least one selected audio layer of said selected multiple audio layer item to create locally an audio remix representing a mixed digital audio signal.

In deciding the matter, the Commissioner first dispensed with the notion that there might be a "special reason" to refuse the 17(c) request.  He reasoned that the claims had been so significantly changed during the course of prosecution that there was no basis to think that the prior art cited against the first two vesions of the claims was still relevant to the newest version sumitted as the basis for the 17(c) request. 

This left open the question of whether or not the claims defined a patent-eligible invention.  The Examiner had asserted that the addition of the recitation "a mixing module" in the claims did not render them patent-eligible, since this was just a standard operation for a computer, and there was no new "reciprocity" between the various components of the system.  The Commissioner disagreed, saying that the end result of the operation of the system was to create a new audio file made partially from layers of the original audio files via a system that facilitated remote access and work.  Thus, he concluded, the final result was achieved through the creation of new reciprocal connections between the physical components of the system, and the invention was patent-eligible.  

While it's good that the Commissioner sided with the view that just because something is done on computer, that doesn't make that something patent-ineligible, he reasoning is still faulty in that at points he mixes what are properly questions of novelty and inventive step into the patent-eligibility analysis.

It's not clear from the Commissioner's decision how this matter came before him in a way that necessitated a written decision, and as noted, none of the documents in this case that might shed light on the matter have been posted online.  Nevertheless, it's clear that  Because only the Commissioner and the head examiner can refuse a 17(c) request, and because 

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.

ILPTO Decisions List Fixed, Apparently

Last week I wrote about the disappearance of lists of ILPTO decisions and announcements from its web site, and their replacement with a non-functional search engine.  It appears that the ILPTO has reinstated the lists, and that the search engine is functioning.   (See screen shot below). 

 

 

 

It’s definitely an improvement over the situation a week ago.  Now if they would just allow us to control the display of the results – for example, to show more than 10 results at a time, or to display the results by date (something that doesn’t always happen, see screen shot below).

 

What Don’t They Want Us to See? ILPTO Web Site Hides Decisions and Announcements (Despite Press Release Claiming Greater Transparency)

In order to fulfill his duties, which include deciding inter partes disputes concerning patent and trademark applications and registrations (e.g. oppositions and cancellation proceedings), the ILPTO Commissioner has quasi-judicial powers.  Once upon a time, as in back in the days when typewriters were still the standard, various of his quasi-judicial decisions were collected and published every few years.  These days, about once a month the ILPTO posts batches of recent decisions on its website. 

That’s all fine and good as long as the website works, and when I last checked the site a few months ago, one could find a list of decisions and scroll them.  But I found this week that instead of having all the decisions available for scrolling through, with a search engine to help locate decisions of interest, the site now only makes the decisions available through a search engine – there’s no list of decisions to scroll through.  While a search engine is a nice thing to have, the ability to look at a full list is also a good feature.  So why’d they get rid of it? 

But it gets better: the search engine doesn’t work.  The search engine has a “free text” field”, an “area of interest” field which is divided into “expenses”, “designs”, “trademarks”, “patents” and “compensation and royalties” sub-fields; a “type of proceeding” field which is divided into “service inventions and defense inventions”, “revocation and cancellation”, “requests for cancellation”, “requests for revocation”, “competing applications”, “expenses”, “reinstatement”, “opposition”, “ex parte”, “apellations of origin”, and “extension orders” sub-fields; and a “type of decision” field that is divided into “interim” and “principal” sub-fields.  One can also search by date range.   But even though the engine allows searching based on various criteria, none of them return hits, even when search criteria are used that are supposed to provide hits. 

For example, on December 30, 2013, the deputy Commissioner granted a request to restore patent no. 196651 after this patent had lapsed for non-payment of a renewal fee.  The decision was circulated a few days later to the ILPTO’s email list.  But when you search on the “decisions” part of the site for this patent number, the search engine says there are no hits (see screen shot). 

In fact, if a search for decisions during any time during the last seven or so years yields no results (see screen shot).

This change-and-failure is true not only for the ILPTO’s quasi-judicial decisions, but also for various administrative announcements and circular memoranda as well.  Those too used to be posted in list format; now all that’s there is an inoperable search engine.  So if you want to see recent decisions or announcements, tough. 

Is the ILPTO is trying to hide something from the public (and if so, what)? Or did the ILPTO hire the same people who designed the Obamacare site do this “upgrade”? 

Ironically, this sequestering of information from the public comes on the heels of a January 1 press release – which IS visible on the ILPTO’s site – announcing greater transparency in the site itself.  Supposedly, for example, one can now search the patents database on the basis of classification per the latest international classification scheme.  But when we clicked on the “international classification search” tab in the ILPTO database, all we got was an error message: “Not Found  The requested URL /tacsy/ was not found on this server”.  What was posted, on a different site, was what appears to be xml data from old Patents Journals – name of applicant, title of invention, application number, address for service.  Which is nice historical information to have, but of little use when one is looking for ILPTO decisions on a particular topic. 

We're waiting in great anticipation to know how the ILPTO defines opaqueness.

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.  

EPO To End Divisional Dunderheadedness; Will the Israel PTO Persist in its Perfidy or Profess to Penitence?

A recurring theme on this blog is the topic of divisional applications in Israel, specifically the impropriety of the Israel PTO’s decision a few years ago to limit the time frame for the filing of divisionals.  A quick recap: the Israel patent statute allows applicants to divide an application as long notice of the allowance of the application hasn’t been published.  Hence if I have application A, at any time before the ILPTO publishes notice of its acceptance I may file divisional application B.  I may then file divisional application C at any time before the ILPTO publishes notice of the acceptance of application B.  And so on.  The end result is that I can keep an application pending for the entire 20-year term of the original application A, in the same way that continuation practice in the USA can be used to achieve the same result.

For over 40 years following the enactment of the statute in 1967, the ILPTO followed the statute.  And then, sua sponte (or maybe at the behest of someone, like a lobbyist for an industry with a strong patent antipathy), the Commissioner decided that the ability of applicants to keep application pending in perpetuity was bad policy.  So he unilaterally announced that neither his predecessors as Commissioner nor the courts that had adjudicated divisionals of divisionals understood the statute, and that the statute only allows the filing of progeny applications from application A prior to the publication of the allowance of A.  Hence C, a divisional of B which is a divisional of A, can only be filed before notice of the allowance of A is published. 

Lest one think that the filing of late-stage divisionals might be possible in response to a lack-of-unity finding in an earlier divisional application, the ILPTO published a clarification stating that the limitation on the timing of the filing of divisionals applies even if the ILPTO makes a finding of disunity in application B: if publication of the allowance of the parent application A has already taken place, then the applicant has to choose which inventions to continue to prosecute and which to give up on, because the ILPTO won’t allow the applicant to file a divisional of application B. 

To date, it appears no applicant has challenged the ILPTO’s illegal adoption of this policy.

I mention all this – again – because the EPO recently announced that it is retreating from its similarly ill-advised foray into limiting the window for the filing of divisionals.  Once upon a time, an applicant could file divisional applications in Europe ad infinitum, irrespective of the status of the ancestral cases.  Then it changed its tune, and said that a divisional application must be filed from a pending patent application by the later of two years from the issuance of a first Examination Report for a related family, or two years from the issuance of a new lack of unity objection.  As noted by our colleagues at Harrison IP, “The two year period was initially introduced by the EPO to counteract a perceived abuse of filing long series of divisionals to cause uncertainty to third parties.”

Now the EPO has announced that is changing tack once again: effective April 1, 2014, EPC Rule 36 will change so that the only criterion for the filing of a divisional application is that it be a divisional of a pending European patent application.  In order to dissuade the “evergreening” of applications by the serial filing of divisionals, the EPO is simultaneously introducing a progressive fee scale for filing divisional patent applications. A divisional patent application filed from an original European patent application will only be subject to the regular filing fee (and of course the retroactive payment of the EPO’s egregious renewal fees, but we’ll leave that topic for another day).  But a divisional patent application filed from a prior divisional patent application (i.e. a divisional-of-a-divisional) will incur an additional fee (via an amendment to Rule 38 EPC). This additional fee will increase in accordance with the generation of the divisional application. Thus a second generation divisional would cost less to file than a third generation divisional and so on. The actual fees to be charged have yet to be announced; like the permissive policy regarding the timing of the filing divisionals, these additional fees will take apply to divisional patent applications filed on or after April 1, 2014.

Will the ILPTO follow suit?  No predictions here, but it would be well-advised to do so.  Its current untenable position flat-out contradicts the statute and is therefore ultra vires; someday the ILPTO’s position is going to be challenged, and the ILPTO is going to be slapped down by the courts.  If the unelected and unaccountable higher-ups in the ILPTO erroneously think that policy-making is part of their job, then they can try to impose their will via fee setting, just as the EPO has now done.  Fee-setting is done legally via rulemaking, with the Justice Minister promulgating the rules, subject to approval from the Knesset Statute, Constitution and Law Committee.  Given the particular personalities currently involved, it’s not clear that such an attempt at rule making would be successful, if it were to even gain any traction at all.  But that’s how things work in democracies, even that of the People’s Free Democratic Republic of Israel.

21st-Century Technology, 19th-Century Patent Office

As I mentioned in an earlier post, the above statement is how a colleague of mine characterizes Israel.  A few years ago I discussed one case in point, in which a colleague used the ILPTO’s online payment system to pay the fee for recording a change in the patents register.  You would think that the existence of an online payment system is the hallmark of a modern PTO, but here it’s a case of “necessary but not sufficient”, i.e. it’s true that to be a modern PTO you need to allow online payments, but that’s not enough.  In this instance, the ILPTO still requires you to physically deliver the payment receipt to the PTO.  Because my colleague’s receipt arrived one day after there was a fee increase, the office ruled that the fee he had paid was a shekel short; the ILPTO demanded the difference before it would record the change.

Ostensibly, the legal source for the delivery requirement is Rule 8 of the Patents Regulations.  That rule says that ILPTO shall be paid at the Postal Bank and that the receipt of payment, along with an explanation of what the fee is for and the relevant file number shall be delivered to the Commissioner.  But there’s no mention of payment via the internet, which isn’t surprising when one considers that Rule 8 was last updated in 1988, back when dinosaurs roamed the earth, terrorists were still called terrorists rather than “partners for peace”, and only the military and computer jocks used the internet.  So theoretically one could argue that we’re not even allowed to pay ILPTO fees over the internet, since the Regs don’t provide for it.  But far be it for the ILPTO to refuse to accept money, so internet payments are here to stay.  (Internet payments also happen to be a good idea, but that’s rarely been a basis for progress in the public sector.)

The requirement that you furnish the ILPTO with the payment receipt, the file number and an explanation of the purpose of the fee made sense in 1988, as there was no way for the ILPTO to verify that that the payment had been made, let alone its purpose, until applicants/patentees notified it accordingly.  But there’s no logic in imposing the same requirement on internet payments: when paying over the internet, one has to identify the file number (patent, design or TM app or registration number), one chooses from a list of things for which payments can be made, and of course the fact that one’s credit card was charged is also recorded.  (See the example at right).  No less importantly, the ILPTO can see that information in its computer system, along with the fact the payment was made and when it was made.  (I’ve personally exploited the latter fact in cases in which I want to be sure that the ILPTO records the payment, by calling the relevant person at the ILPTO, giving them the receipt number and having them confirm that the payment is shown in their system.) 

By way of comparison, no separate notice of payment of a fee need be sent to the USPTO for payments made by the USPTO’s EFS system.  (That system also facilitates filing of applications, responses, and other papers in applications and patents, something that doesn’t seem to be on the horizon at the ILPTO.)

A recent decision of the Deputy Commissioner highlights the inanity of the ILPTO’s policy as regards internet payments.  Payment of a renewal fee for patent no. 128935 was timely made over the internet in February 2009 by the managing director of the company that owns the patent, but no copy of the receipt of payment was sent to the ILPTO.  As a result, the office recorded the patent as having lapsed for non-payment of the renewal fee.  That fact only came to the patentee’s attention a few years later, when it came time to pay the next renewal fee and the patentee was told that the patent had lapsed.  Rather than request reinstatement of the patent – an act which would result in rights for third parties that had begun to exploit the patent during its period of lapse – the patentee, this time via counsel rather than pro se, requested correction of a mistake in the Register, viz. the recording of the lapse of the patent when none had occurred. 

The Deputy Commissioner would have none of it: citing Rule 8, she said that the patentee had to deliver a physical copy of the receipt to the ILPTO, and failing to do that, the ILPTO had acted properly in recording the lapse of the patent.  Ironically, in support of this decision she quoted from an earlier decision she had given in similar circumstances (in patent 169590, in which the receipt for payment of a fee arrived at the ILPTO after the deadline for payment of the fee had passed):

“It is clear that in the absence of a notice regarding the purpose of the fee and receipt of its payment, the Commissioner does not know which payment to associate with which matter.  Thus at the time a patent renewal fee is paid, the Office does not know for which patent the fee was paid, until the patentee informs the Office of the number of the patent for which the payment was made.  Therefore, if the notice does not arrive at its destination before the last day for payment of the fee, the fact of payment of the renewal fee cannot be recorded in the Register and the patent lapses.”

That statement makes no sense in the context of internet payments, in which, as noted above, the ILPTO has all the relevant information at its fingertips. 

No word on whether or not the patentee plans to appeal (the deadline hasn’t passed); according to the ILPTO web site, a request for reinstatement was filed on June 17, but as of this writing the document itself isn’t visible on the site.  No word either as to whether the ILPTO offered to refund to fee it received but refuses to give credit for.

Sleep On That: Even When Trying to Help Hapless Pro Se Mattress Inventors, ILPTO Awards Excessive Fees to Well-Funded Opponent

Mr. and Mrs. Gabbai live in Ashdod. They developed a three-layer mattress, which they asserted helps prevent sudden infant death syndrome (SIDS). In 2007 they filed a US patent application on their mattress, which eventually issued as US 8065767. The corresponding Israel case, application no. 179840, didn’t fare as well: although allowed by the Examiner, the application was rejected by the Deputy Commissioner in pre-grant opposition proceedings instituted by Aminach, a well-established local mattress manufacturer. There are several aspects of the decision worth noting: first, the basis on which the application was (and was not) ultimately rejected; and second, the award of attorneys’ fees given to Aminach.

Aminach asserted that the patent shouldn’t be granted because (a) the Gabbais breached their duty of disclosure (by failing to provide the ILPTO with the publications cited by the USPTO examiner), (b) the claims were unclear, (c) the invention was neither novel nor inventive, and (d) the invention lacked utility.

Despite acting pro se (and, unsurprisingly, making numerous mistakes along the way as a result, e.g. attending the hearing at the ILPTO without being prepared to cross-examine one of Aminach’s witnesses), and despite the fact that Aminach was represented by one of the largest IP firms in Israel, the Gabbais managed to successfully parry most of these assertions. With respect to the non-disclosure of the references from the USPTO, the Deputy Commissioner noted that deliberate concealment is one of the requirements for sanctioning an applicant for non-disclosure, and she ruled that since Aminach hadn’t provided any evidence to show that the non-disclosure was deliberate, she had to find for the Gabbais on this point. Likewise, she found that the invention was novel and inventive over the prior art cited by Aminach.

What the Deputy Commissioner found lacking was utility. The Gabbais had asserted in their application that the mattress reduced the incidence of SIDS. Aminach’s expert witness, a physician, pointed out that there was no evidence in the application or even provided by the Gabbais later that showed that the mattress in fact achieved this result. Since the Gabbais were deemed not to have submitted their own evidence (because their evidence was filed as a letter rather than an affidavit), and their cross-examination of Aminach’s expert wasn’t terribly successful, the Deputy Commissioner ruled that that invention lacked utility and was therefore unpatentable.

The difficulty with that determination is, of course, that no one disputes that the mattress actually worked as a mattress. That alone is sufficient to qualify for utility under section 3 of the statute: “An invention, whether a product or process, in any technological field, which is new, useful, susceptible of industrial use and inventive, is a patentable invention.” Whether or not the mattress worked to reduce SIDS is (or should have been) immaterial. By stressing in their patent application that the mattress reduced in the incidence of SIDS, the Gabbais opened themselves to obfuscation of this point by Aminach’s attorneys. Had the application merely described what the invention is – viz., a mattress having a particular construction – without singing its praises, it is doubtful that the Deputy Commissioner would have been duped into agreeing that the invention lacked utility.

(Having determined that the invention lacked utility, the Deputy Commissioner didn’t rule on the clarity of the claims.)

No less remarkable was the awarding of 40,000 shekels (over US $10,000) in attorneys’ fees to Aminach. Aminach actually asked for over 140,000 shekels in fees, but refused to provide its attorneys’ billing sheets on the grounds that these were privileged. The Deputy Commissioner ruled that the billing sheets were not privileged documents, and that their non-production left the Gabbais without an opportunity to challenge the billings; nevertheless, she awarded 40,000 shekels on the basis of “the evidence and pleadings filed by the opponent, the fact that the applicants didn’t file their own evidence, and the great savings incurred by the fact that the summations were presented orally rather than in writing [as is the norm in Israeli legal proceedings – DJF]”.

Perhaps the Deputy Commissioner felt that she was doing the applicants a favor by awarding significantly lower fees than the prevailing party requested, but it’s still a slap in the face: you file a patent application on an invention which is novel and inventive, you nevertheless lose in an opposition, and then you have to pay the other side? It should also be borne in mind that just a few years ago, an award of 40,000 shekels was unthinkable – an award of just 5,000 shekels would have been considered sizeable. The request for 140,000, and the granting of 40,000, are clearly the result of the ILPTO’s trend to grant attorneys’ fees award far in excess of what real courts of law themselves actually award.

If anything, the fee award in this case will discourage inventors with little money from seeking to commercialize their inventions or otherwise disclose them in patent applications – why bother to do so if a better-funded competitor hire some good lawyers to sell the ILPTO a load of baloney not only to prevent you from getting a patent you deserve, but to also convince the ILPTO to tell you have to pay for your competitor’s lawyers?

(For those of you who read Hebrew, the transcript of the hearing before the Deputy Commissioner, as well as the letter the Gabbais sent to her the day after the hearing, both of which can be viewed on the ILPTO’s web site, make good reading if you’re looking to illustrate why acting pro se is usually a bad idea.)

A Small Favor for Israel Patent Applicants

This morning the Israel PTO sent out an update regarding applicants' reporting of prior art to the ILPTO.  Similar to the USA, Israel imposes a duty of disclosure throughout the application process.  Henceforth, when listing publications cited against the novelty or inventive step of corresponding applications elsewhere, applicants will only need to provide the ILPTO with copies of non-patent literature; the ILPTO will apparently obtain patent publications for itself.  Don't know who was behind this change, but I think I speak for the entire community of Israel patent applicants and practitioners when I say thanks for injecting a small but welcome measure of sanity into local practice.

Insomniacs Rejoice, Part 2 (or, Puzzle This: Why Didn’t The Amended Regulations Set A Fee For Third Party Requests For Expedited Examination?)

For those weirdos who find the Israel patent regulations to be a scintillating topic for discussion (and for those who are just gluttons for punishment), here are a two more points not mentioned in yesterday’s post.

First, in addition to raising filing fees, many other fees are also going up significantly, effective January 1, 2013.  Examples: extension fees will rise from 64 shekels per month to 200 shekels per month; the first renewal fee for a patent (through the end of the 6th year) will go from 157 to 800 shekels, and the second renewal fee (for years 7-10) will rise from 320 to 1600 shekels.   (Admittedly, that doesn’t come close, in absolute or percentage terms, to raising the re-examination fee from $2500 to $17,000, as the USA recently did.)  There will also be a new excess page fee of 250 shekels for each group of 50 claims, or portion thereof, beyond the first 100 pages of the application; sequence listings won’t count, but no word on whether the Israel filing form or the PCT Request (for national phase filings) are included in the page count.

Second, what is most glaring is what wasn’t included in the new regulations: a fee for making a third party request for expedited examination (TPREE).  As reported in a previous post here and in a guest post on PatentDocs, statutory amendments enacted earlier this year will allow third parties to request that someone else’s application be moved to the front of the examination queue (and stay there); that provision comes into effect in mid-January 2013. Such requests must be accompanied by a fee, “if such a fee is established”.  One would have thought that such a fee would have been included in the latest set of amendments to the Regulations, alongside all the other new and amended fees, but there’s no mention of a fee for TPREE.   The Justice Ministry, which proposes the fees, is on record as supporting a TPREE fee of 25,000 shekels; one surmises that the non-inclusion of this fee in the latest group of fees means that the local generic drug lobby – the same group that lobbied for TPREEs in the first place – wants the fee to be set lower (a conclusion confirmed by a source involved in the discussions regarding these fees).

Prediction: there won’t be a TPREE fee in place come January 13, at which time there will be a flood of TPREE requests, all directed to patent applications in the pharma field.  At which point the proverbial excrement will hit the proverbial fan, with Pfizer et al. demanding hearings on the propriety of expediting examination in each case, and the Commissioner have conniptions trying to figure what he needs to do.  In the spring, after Knesset elections, TPREE fees will be set in the amount of at least 25,000 shekels per request.   And a good time will be had by all, or at least by the lawyers who represent the major players in pharma in Israel.

You Can’t Win ‘Em All: Amgen’s Successful U.S. Patenting Strategy Results In Denial Of Patent Term Extension in Israel

The statutory amendments to US patent law adopted in September 2011 were only the latest (if the most far-reaching) in a series of changes to US law following the major revision of 1952.  Another significant change occurred on June 8, 1995, when the USA switched from a 17-years-from-grant system to a 20-years-from-earliest-filing system.  The transition was accompanied by a provision that the term of any granted patent in force on that date, or which was subsequently granted on an application filed before but still pending as of that date, would be the longer of 17 years from grant or 20 years from the earliest filing date.

In anticipation of the change, there was a rush of filings in early June 1995, as applicants attempted to file applications that would benefit from this “best of both worlds” situation.  As reported by Dennis Crouch on Patently-O earlier this year, there are still a few hundred applications pending that were filed before the change was made that, if allowed, will be in force for 17 years from grant.  (Conversely, the filing of a continuation application after June 8, 1995 subjects the application to the 20-years-from-earliest-filing-date provisions; Aaron Feigelson has found more than few patents that as a result of the change were “dead on arrival”.)

Amgen made good use of the change in the law.  It has five US patents filed before June 8, 1995 that trace their lineage to the 1980’s, some as far back as 1983, all of which issued later; three of these were filed on the eve of the statutory switch: no. 5,547,933 (filed June 7, 1995, granted August 20, 1996); 5,618,698 (filed June 6, 1995, granted April 8, 1997; 5,955,422 (filed August 2, 1993, granted September 21, 1999); 5,756,349 (filed June 6, 1995, granted May 26, 1998), and 5,441,868 (filed in 1987, granted in August 1995). 

Collectively these patents cover Amgen’s blockbuster drug Epogen^® (recombinant erythropoietin, “EPO” or epoetin alfa).  In 2007, several of the patents were found to be infringed and not invalid, resulting in Roche being unable to bring its competing Mircera^® product to market; in 2009, Roche and Amgen settled their dispute, with Roche stipulating to the validity and infringement of all five patents, and agreeing to keep Mircera off the market until July 1, 2014.  Epogen was first approved by the FDA in 1989, meaning Amgen secured 25 years of effective patent protection for this drug in the USA.   

A related Amgen product is Aranesp^® (darbepoetin alfa), which like Epogen is used to treat anemia in certain situations.  According to the prescribing information, darbepoetin alfa is a modified version of erythopoietin (EPO); in particular darbepoetin alfa

“is an erythropoiesis-stimulating protein that is produced in Chinese hamster ovary (CHO) cells by recombinant DNA technology.  Aranesp is a 165-amino acid protein that differs from recombinant human erythropoietin in containing 5 N-linked oligosaccharide chains, whereas recombinant human erythropoietin contains 3 chains.  The 2 additional N-glycosylation sites result from amino acid substitutions in the erythropoietin peptide backbone. The approximate molecular weight of darbepoetin alfa is 37,000 daltons.”

As with EPO, in the case of Aranesp Amgen made good use of the change in US patent term calculations: it filed USSN 08/479,892 on June 6, 1995, claiming continuation and continuation-in-part priority back to a 1989 application.  The ‘892 application matured into US Patent No. 7,217,689 on April 25, 2007, with an nominal expiration date 17 years later, viz. April 25, 2024.  Aranesp was approved by the FDA in 2001, meaning the drug will enjoy an effective 23 years of patent protection in the USA if the ‘689 patent isn’t invalidated. 

Where the story gets interesting, at least from an Israeli perspective, is when we look at what happened in the corresponding case in Israel.  Aranesp was approved by the Israel Ministry of Health in 2002; on the patent side, Israel patent no. 110669 was filed in 1994 and claims priority from USSN 08/108016, a 1993 application in the US priority chain for the US ‘689 patent.  IL 110669 was granted in 2009 and, absent a patent term extension (PTE), will expire in August 2014. 

The patentee filed a request for a PTE within the prescribed time after the grant of IL 110669.  But here it ran into a technical problem.  The statute defines a “basic patent”, which is the Israel patent for which the PTE is sought and that “protects” the API (or formulation, or method of making either); and the statute defines something called a “reference patent”, which is a patent in any one of several recognized jurisdictions that also protects the API (or formulation, or method of making either).  Section 64D(5) of the statute says that if the FDA approved the patent-protected product or process, then in order to receive a PTE in Israel, a “reference patent” in the USA must have received a PTE from the USPTO. 

In its Israel PTE application, Amgen stated that the reference patent in the USA is the ‘689 patent.  That makes sense: claim 3 of IL 110669, for example, reads,

3. An analog of human erythropoietin which is: Asn³⁰Thr³²Val⁸⁷Asn⁸⁸Thr⁹⁰ EPO.

which is quite similar to claim 23 of the US ‘689 patent, which reads,

23. An analog of human erythropoietin comprising the amino acid sequence of human erythropoietin from residues 1–165 as shown in SEQ ID NO: 26 except for the amino acid changes Asn³⁰Thr³²Val⁸⁷Asn⁸⁸Thr⁹⁰ EPO.

The problem for Amgen was that no PTE was ever issued for the US ‘689 patent, which according to 64D(5) means that IL 110669 isn’t eligible for a PTE either.  Indeed, no PTE for the US ‘689 could have issued, since a PTE in the USA can’t extend the patent more than 14 years from the date of FDA approval, viz. 2015, and here the US ‘689 patent won’t expire until 2024, so the patent wasn’t even eligible for a PTE. 

Realizing it had a problem on its hands, Amgen argued in its Israel PTE application, and then in ex parte proceeding before the ILPTO Commissioner, that it was nevertheless entitled to a PTE for IL 110669, inter alia because the term of the US ‘689 “reference” patent had effectively been extended by virtue of the change in US law.  Citing some earlier district court and ILPTO decisions, in a written decision from September 27 the Commissioner rejected Amgen’s arguments, on the grounds that the statute was clear and that it wasn’t his place to engage in “purposive construction” of the statute when his task in deciding PTE applications was purely ministerial.  Amgen had FDA approval for the drug but no PTE for a US patent protecting the drug, hence he could not issue a PTE in Israel. 

Thus Amgen’s choice to file June 6, 1995, and thereby obtain the “best of both worlds” for its US patent term, doomed its chances of obtaining a PTE in Israel.  Of course, at the time, there was no PTE legislation in Israel, and even if there was, given the disparities in the two markets, and the billions of dollars Amgen has made and will continue to make with Aranesp, this one would have been a no-brainer.

Interestingly, had Amgen chosen to file the ‘892 application two days later, when it would have been subject to the 20-years-from-earliest-filing limitation, it probably still would have lost out on a PTE in Israel: the US ‘689 patent – the one that issued in 2007 – would then have been set to expire in 2003, four years before it issued, and by dint of the FDA’s 2001 approval of the drug, would have been eligible for a PTE only until 2006, a year before the patent issued.  So even with the grant of temporary PTEs by the USPTO until 2006, Amgen may well have found itself in the same boat as far as Israel goes.  Then again, maybe not: as noted above, the USPTO isn’t averse to issuing patents that are DOA, so perhaps a 2007 grant with an earlier, albeit temporary, PTE, would have been sufficient to gain PTE eligibility in Israel.

[Editorial comment: the Commissioner reached the right decision in this case, but it would be nice if he and his staff would start being equally circumspect in their reading of the statute on other matters, such as “overlap” between applications, or with regard to the timing of the filing of divisional applications, both areas in which the ILPTO has in recent years invented new laws not found in the statute.]