America-Israel Patent Law

Patent Practitioners Aren't The Same As Lawyers: Quod Erat Demonstrandum redux

Another example of lawyers being a different breed than patent attorneys: members of Board of Trustees of California State Bar admit they screwed up by not investigating over 200 complaints against a lawyer over a period of 40 years. The lawyer is now disbarred and facing federal charges for misappropriation of $18 million of client funds.

Raphael Mechoulam z"l

Cannabis has become a become a big (legal) business in recent years. This weekend marked the death of Raphael Mechoulam at the age of 92. An emeritus professor at Hebrew University, he was one of the fathers of research into cannabis. He began his work in this area in the 1960s and published some of the seminal papers on the cannabinoids found in cannabis. Pubmed indicates that in just the last 21 years - well into retirement, and a period that excludes the first 40 or more years of his research activity - he had 178 publications. His work was cited or listed as prior art in numerous patents and patent applications, and he himself is listed as an inventor on dozens of patents and patent applications, including two US patent applications published within the last year. יהי זכרו ברוך

This Is Why The Use of Trademarks To Identify Goods In Patents Can Be Problematic

For those who don't speak Hebrew, the bottom line says, "Cream Cheese 25% Fat - New Recipe".

Address for Renewal Fee Service: Another Suggestion for the Israel PTO

Patent renewal fees, also sometimes called maintenance fees or annuities, are a feature of most patent systems.  Readers can look at economic-analysis-of-law textbooks for an explanation of the economic rationale for these fees, but from the standpoint of most patent offices they’re just another form of income.  In the US, renewal fees are due 3.5, 7.5 and 11.5 years after patent grant; in Israel they’re due within three months of grant and thereafter at 6, 10, 14 and 18 years from the filing date.

Although the renewal fees themselves can get hefty, particularly toward the end of the life of a patent, administratively it doesn’t take much to pay the fee, especially now that most patent office accept online payments.  It should therefore come as no surprise that there are several companies that in essence function as renewal fee payment aggregators: they have managed to get lots of customers to pay them to manage renewal fee payments, and as a result they’re usually able to negotiate bulk discounts with a local service provider that takes care of the actual payment.  (I say “usually” because it's not always the case that the cost when working through one of these providers is cheaper.) For patentees, especially patentees with large portfolios, this can be a good deal, since the renewal fee company keeps track of the deadlines and the costs, for less than it would cost having a law firm track this information.

The USPTO recognizes the fact that paying a renewal fee is a purely ministerial act, and allows a patentee to maintain one address for service for correspondence for substantive matters (like patent term extensions), while maintaining a separate address for correspondence pertaining to renewal fees. This way, if the patentee chooses to use a renewal fee service, and there’s a power of attorney on file, the attorney of record is off the hook for renewal fees.

Sadly, while the Israel PTO recognizes that paying renewal fees is purely ministerial and therefore will accept a renewal fee payment from anyone, the Israel PTO does not recognize that it’s possible to have separate correspondence addresses for renewal fees and for other matters. This oversight creates unnecessary work for local practitioners, particularly since the Israel PTO usually requires – unjustifiably, in my view, but that’s a topic for another blog post – that patent applicants submit a power of attorney.  The way it works is that the Israel practitioner will generally prosecute a case through to grant, and then pay the first renewal fee due within 3 months of grant.  Thereafter, though, the patentee often uses a renewal fee service, which contracts with one of the large Israel patent firms to take care of its renewal fees.

That in and of itself wouldn’t matter, but (a) the Israel PTO sends renewal fee reminders* to the address for service on record, and that’s usually the address of the practitioner to whom the POA was given, and (b) the renewal fee certificates that are issued once the fee has been paid are sent to that same address for service. 

The result is that a practitioner who has been told by the client that he is not responsible for renewal fees in a particular case continues to receive notices about renewal fees for that case, something that may necessitate checking the docket system to confirm that he is not responsible for renewal fee in question.

While a practitioner could in principle withdraw from representation once the patent issues, that’s overkill, since the patentee may want the practitioner to continue to be responsible, e.g. should the patent be subject to a cancellation action of if it’s desired to obtain an extension of a pharmaceutical patent.

There is no reason the Israel PTO can’t do like the USPTO does, and enable the recording of a separate address for renewal fee correspondence. It would make life easier for everyone involved.

*The fact that the Israel PTO sends renewal reminders BEFORE the fees are due is a nice service. The USPTO, by contrast, only sends out a reminder once the initial deadline has been missed, as if to say, “Oops, you missed your deadline and now you can still pay, but with a 10% penalty.”

USPTO Moving to Electronic Issuance of Patents

In a press release from today and a Federal Register Notice that will be published tomorrow, the USPTO announces that in April it will be moving to electronically issued patents, rather than continuing to publish paper copies. This will come as a relief to some, but will be disappointing for those who like those paper copies.

However, the main practical difference for applicants will be that the window to file continuation applications (or to withdraw the application from issue, for example to file an information disclosure statement) will be much smaller.  At present, once the issue fee is paid, it takes the USPTO several weeks (usually six to eight) to issue the patent, an act that always occurs on a Tuesday. About three weeks before the patent is issued, the USPTO mails an "issue notification", telling the applicant when the patent will issue, and effectively informing the applicant of the deadline to file a continuation application or withdraw from issue.  Under the new scheme, the patent will issue shortly after the issue fee is paid, still on a Tuesday, but the applicant will only get warning of the impending issuance 5 or 6 days beforehand.  "Therefore", says the USPTO, "the best practice would be for applicants to file these submissions as early as possible. Preferably, continuing applications should be filed before the payment of the issue fee."  This may be the first time that I will recommend that clients follow legal advice given by the USPTO

When 1+1 Does Not Equal 2: Israel PTO Filing System Gags on Merged PDF File

I had a strange experience this morning when filing something at the Israel PTO via the ILPTO EFS.  I had merged two pdf documents into a single pdf document, and when I tried to upload the merged document to the Israel PTO filing system, it gave me an error message - something about a problem with the fonts.  But when I uploaded up each pdf document separately, I received no such message.  Thinking that the problem might be with the pdf editing program I was using to merge the files, I merged the two files using a different pdf editor, but the same thing happened when I tried to upload the merged file.  Printing the merged file as a new pdf document using cutepdf didn't help either.  Ultimately I uploaded the two documents separately (listing one as the specification and one as a sequence listing, which it's not, but it's clearly labeled "appendix"; I was concerned that the EFS would only accept text files as sequence listings, but it was fine with my pdf).  

Are there any hardcore pdf mavens out there who can explain what the glitch in the ILPTO's filing system might be?

Mea Culpa, and Check Your Israel PTO Email Subscription

In a previous post I stated that the Israel PTO did not use its regular email subscription list to inform people about its recently-held "roundtable" on possible "ethics rules" for patent practitioners.  Turns out I was wrong on that score, and I apologize for that.  I discovered last night that the email account I usually use stopped receiving emails via the ILPTO subscription list about two months ago.  (There's another account I have to which those emails are also sent, which is how I discovered the source of the problem, but I check that account infrequently.)  I'm not sure why I stopped getting the emails at my regular account, but I promptly re-subscribed.  If you're supposed to get emails from the Israel PTO but haven't received any lately, maybe you should re-subscribe.

FWIW, I still smell a rat with the process for adopting these "ethics rules", but that's for a future post.

Israel Reaches 300,000 Patent Applications

I didn't see anything about this on the Israel PTO's web site, but from the Patents Journal that published on February 1, I see that Israel hit patent application no. 300,000 on January 16, 17 or 18.  Patent applications in Israel are numbered sequentially and stay the same once a patent is granted, and since not all applications proceed to grant, this means that we're still at fewer than 300K granted patents.  Still, 300,000 applications is a respectable milestone.

To get a sense of timing, application no. 75,100 was filed in May 1985 (before Israel joined the PCT), no. 100,000 was filed in November 1991, no. 125,000 in June 1998 (after Israel joined the PCT), no. 150,000 in June 2002, no. 175,000 in April 2006, no. 200,000 in July 2009, no. 225,000 in September 2011, no. 250,000 in January 2017, and no. 275,000 in May 2020.  Most of those applications were all filed as national phase applications of PCT filings, and consequently in the ILPTO's database their filing dates are listed as the PCT filing date rather than the national phase date, but the application number accords with the date of national phase entry.

Patent Practitioners Aren't The Same As Lawyers: Quod Erat Demonstrandum

This afternoon, the Israel PTO and Justice Ministry held a roundtable discussion about in-the-works draft ethics rules for patent practitioners.  I may or may not report more on the meeting in a later post, but while that meeting was going on, this story broke about the head of the Israel Bar Association resigning because he whacked off during a video chat with a female colleague who he'd recommended for a judgeship. The story implies that he admits to the act, but didn't believe he did anything wrong because it was consensual.

Every time the issue of ethics rules for patent practitioners in Israel has come up, I've said that patent practitioners don't have a reputation as sleazebags and don't have the kind of opportunities for abuse of client trust that lawyers do. And usually I've pointed to the existence of canonical lists of lawyer jokes on the internet, but the noticeable absence of the same for patent practitioners. But I think this story proves my point. Especially when one considers that this guy's predecessor as head of the bar association resigned amidst criminal charges of trying to get his mistress through passport control improperly. Or that another former head of the bar association sued a cop for half a million shekels - and lost - after the cop arrested the lawyer when the lawyer refused to pay his cab driver.

Not the same professions. QED.

Pretending They’re Listening? MOJ and Patent Practitioner Ethics Rules

On January 8, the Israel PTO, in conjunction with the Department of Policy Planning and Strategy in the Ministry of Justice, announced a “roundtable” meeting scheduled for January 31 at the Ministry of Justice offices in Tel-Aviv, from 14:30-16:00. The purpose of the meeting is to discuss proposals for new ethics rules for Israel patent practitioners. People wishing to participate must respond by email to re[email protected]. It should be noted that no actual rules have been proposed – the notice itself merely lists some topics, without explaining with the MOJ’s position is or why those topics are included (and why others are excluded).

If you didn’t know about this meeting, you’re not alone: although a notice was posted on the Israel PTO web site, no notice was sent via the Israel PTO’s regular email distribution system.  Instead, email invitations were sent to people who responded to an earlier “call for comments” that was posted on October 20 and that had a short response deadline of November 10. 

To the best of my knowledge, the comments that were received in response to that “call for comments” have not been posted anywhere, and my email request to receive a copy of them – sent to the same email address above – hasn’t even elicited a “received with thanks email”.

By way of background, Israel’s patent statute was enacted in 1967. The statute says that the relevant minister has the authority to enact (as regulations) “ethics” rules for patent practitioners. To date, no such rules have been enacted, but the practice doesn’t seem to be any worse for the wear.  Which leads one to wonder what the impetus is for enacting ethics rules for patent practitioners davka now, or even who is pushing for the adoption of such.  (In around 2013 or 2014, there was a push from within the MOJ to adopt such rules, and there was a similar “roundtable” meeting at the PTO, but that project did not result in the adoption of such rules.)

As I have noted in the past in comments to the MOJ/PTO, if you use an online search engine, you’ll find canonical lists of lawyer jokes, but jokes about patent attorneys are few and far between. There’s just far less potential for patent practitioners to engage in mischief of the kind that makes people distrust lawyers generally, and what potential there is would seem to be adequately covered by tort law.  Additionally, the statute includes provisions for discipline of practitioners, with “breach of the [non-existent] ethics rules” being only one of the things for which a practitioner can be disciplined, and as a practical matter, an ad hoc committee of practitioners has from time to time been formed by the Israel PTO when a complaint about a practitioner was received.  In other words, if it ain't broke, don't fix it.

One long-standing point of contention within the community of patent practitioners in Israel has been whether or not a practitioner can list himself as an inventor on an application he’s drafted. To any US-licensed practitioner, the answer to that question is a no-brainer: of course. And the way to regulate such situations is to make the practitioner assign his rights to the clients, at no extra cost, as was done in the case I reported on here, here, here and here.

A point that doesn’t seem to be on the MOJ’s radar, but which should be, is providing notification to clients when a practitioner leaves an office to practice elsewhere. It’s not uncommon for a practitioner to work with a particular client, local or foreign, over the course of years, during which that practitioner will often become familiar with the client’s technologies, personnel, and patent portfolios. In such a situation, the client would be best served by being given the choice of staying with the departing practitioner – thus preserving institutional memory – or staying with the old firm, with the understanding that someone new may need to learn about client’s needs. I am not aware of any firm in Israel that notifies clients when such departures occur and lets the clients know they have the option of staying with the departed practitioner.

Given the lack of transparency in how the current push for practitioner ethics rules has been handled to this point – no broad email distribution; no names of the people in the MOJ who are responsible; no disclosure of the comments received thus far; no explanations of why certain rules are deemed necessary, let alone actual draft rules to which the public can respond; a one-and-a-half hour meeting, when more time than that will probably be required – I am not alone among my colleagues in thinking that this “roundtable” is just a fig leaf to cover a fait accompli, and that the MOJ and PTO are just going through the motions of soliciting public input.

Update, a few minutes after posting: Earlier today I re-sent my email requesting copies of the comments to the email address above, with a cc to a particular person in the Israel PTO.  Shortly after I initially posted this blog post, I received copies of the five (!) submissions received in response to the "call for comments", one of which was my own submission.  Interestingly, the response from a group called "The Israel Patent Attorneys Association" suggested that a "roundtable" be held to discuss issues. I include links to all these documents below, although only my own comments were written in English.

Download Response of small offices

Download Response of association

Download Response of erez gur

Download Response of daniel feigelson

Download Response of small offices

What Were They Thinking In Congress (Assuming They Were Thinking)? Changes In Small and Micro Entity Fees

There was a piece last week in The American Spectator that argues that the 1998 SCOTUS decision Clinton v City of New York is the worst supreme court decision ever. That decision said that the line-item veto was unconstitutional. The author argues that by forcing the president to either approve or veto the Congressional spending bill in its entirety – a veto resulting in a shut-down of the federal government – all sorts of junk that would never get enacted otherwise now gets thrown into the spending bill.  If what happened with patent legislation last week is any indication, the author seems to have a point.

Tucked into the spending bill that Joe Biden signed into law on December 29 were several amendments that change 35 U.S.C., which is where most of the statutory language governing patents is found. (Hat tip to Scott Nielsen for the link; search for the word “unleashing” to find the relevant part.) The amendment with the most immediate effect was the change in fees for small entity and micro entity patent applicants.  If you’re already familiar with small and micro entity fees, skip ahead a few paragraphs. If not, keep reading.

Small entity fees have been around since before I started working in patents in 1995; these were meant to give small companies a break when seeking (or to remove a disincentive to seeking) patent protection, and provided a 50% reduction on certain PTO fees, most notably filing, search, examination, extension of time, and maintenance fees. Micro entity fees are a newer creature, the result of the 2011 “America Invents Act”, and these have hitherto reduced certain fees by 75%, but there are more requirements to qualify for micro entity status than there are to qualify for small entity status. 

Both micro entity and small entity status are asserted by the applicant/patentee at certain times in the lifetime of an application or patent (upon initial filing, upon payment of the issue fee, and upon payment of each maintenance fee), and normally the status is not something the PTO checks or even has the wherewithal to check.  Nevertheless, I’ve never filed an application for someone claiming microentity status, and I know other practitioners who are in the same situation: we think that the cost of verifying entitlement to microentity status (in attorney time) outweighs the additional 25% fee reduction over the 50% small entity reduction.  Micro entity status is thus an example of a nice idea that’s poorly implemented.

Small entity status, on the other hand, is easier to verify, because the way in which “small entity” is defined is fairly straightforward: if the application or patent is owned by an entity that has 500 or more employees, or there’s an obligation to assign to such an entity, then the applicant/patentee isn’t entitled to claim small entity status.

If one makes a good faith mistake in claiming small entity status, hitherto the remedy has been straightforward: you pay the difference in the fees that were due in accordance with the fee schedule in effect on the day you make the correction in entity status.  So if, for example, you paid a $500 fee at the small entity rate, and a week later discover that it should have been $1000, you pay the $500 difference.  If a fee increase or decrease went into effect between when the fee was originally paid and the difference paid, that difference will be in accordance with what the new fee is.

Of course, if the patent is valuable, and at some point the patentee corrects a payment that was mistakenly made at the small entity (or micro entity) rate, then in litigation the defendant will make an issue out of the applicant/patentee’s good faith, thus adding cost to the litigation…which is why practitioners try to avoid making such mistakes in the first place. This is also why, in situations in which the determination of small entity status is more complicated, some applicants may elect to pay full fare, to keep this issue off the table. Nevertheless, if the good faith in making fee payment at the reduced rate is demonstrable, then the mistake per se in claiming small entity status is not fatal, and fee-wise, there’s no penalty.

In contrast, deliberately paying the reduced fee to which one is not entitled is fraud, and, once discovered, it leads to one result: an invalid patent. And yes, there have been cases where people tried to pull a fast one on the PTO and later got caught. Bye bye, patent.

This brings us to last week’s statutory amendments. Among other things, they increase the small entity fee reduction to 60% of the normal fee and the micro entity reduction to 80% of the normal fee (viz. qualifying applicants/patentees now pay only 40% or 20% of the relevant fees).  But now there’s a catch if you incorrectly assert entitlement to fee reduction:

Penalty for False Assertions.--In addition to any other penalty available under law, an entity that is found to have falsely asserted entitlement to a fee reduction under this section shall be subject to a fine, to be determined by the Director, the amount of which shall be not less than 3 times the amount that the entity failed to pay as a result of the false assertion, whether the Director discovers the false assertion before or after the date on which a patent has been issued.

What’s meant here by “false assertions”? Off the top of my head, I can think of at least two ways to read this, one of which definitely is wrong. 

Let’s start with the way it could be read, but shouldn’t: it shouldn’t be read as saying that a willful false assertion of entitlement to fee reduction (viz. small or micro entity status) is subject to a penalty, because such a willful false statement constitutes fraud, and the result of fraud until now has been invalidation of the patent.  What’s the point in the PTO saying to a patentee, “You deliberately paid a fee a reduced rate to which you weren’t entitled, so now your patent is invalid, and please pay us $$$ to keep you invalid patent invalid”?  

So unless the amended statute means to say that fraud is now ok – and I don’t see any court buying into such a statutory construction – the new statutory language must be referring to cases of inadvertent false statements.

That means that now there’s a financial penalty for a mistaken good-faith payment of a small or micro entity fee.  If you paid it incorrectly, then that mistake is going to cost you at least three times the amount that you didn’t pay at the time.  If we’re talking, say, the third maintenance fee, that’s several thousand dollars. 

Since an applicant or patentee only needs to certify small or micro entity status at certain points in the life of a patent, I suspect that as a result of the amendments, more applicants/patentees than before who discover they have inadvertently paid the wrong fee will not immediately seek to pay the correct amount – which will now entail a significant penalty – but will simply wait until the next time they need update their status, and at that time pay the fee at the higher rate. The PTO will be none the wiser.

Which makes me wonder just what the sponsor of this particular bill thought s/he was going to accomplish with it.

Another Update On Docx

Following up the previous two posts (here and here) re docx:

First, David Boundy says that tomorrow there will be a Federal Register Notice in which the PTO delays by three months the imposition of the $400 charge for failure to file in "docx".

https://www.federalregister.gov/public-inspection/2022-28436/setting-and-adjusting-patent-fees-during-fiscal-year-2020

 

 

Second, Carl Oppedahl has written a superb explanation of the problems with docx, and how the PTO has repeatedly lied about this being a standard:

https://blog.oppedahl.com/?p=8681#comment-219169

If you're a practitioner, please sign the letter to Director Vidal, urging her to read his explanation.

 

I will be shocked if the PTO persists in this docx nonsense.