America-Israel Patent Law

Why Is the ILPTO Asking for Excess Page Fees That I Already Paid?

Filed a divisional application at the ILPTO. The ILPTO’s electronic filing system populated all the relevant fields with information from the parent case. As the application has more than 100 pages, I told it how many excess pages there were (250) and it calculated the total fees due – NIS 2344 filing fee plus NIS 293 for each group of 50 pages over 100, total NIS 3223.  Which I paid.

A few minutes later, I got the filing receipt. That’s good – USPTO doesn’t do things that quickly.

But at the same time I got a letter saying we still owed NIS 2344 in excess page fees, and that we need to file a “response to defects” on the web site. It included a hyperlink.

So I wrote a response saying, No we don’t, your system calculated exactly what we owed and we paid it, see receipt no. XXX. (Normally I’d pick up the phone to deal with this, but the ILPTO doesn’t take phone calls after 13:30.)

I went to file the letter and found that the system doesn’t have an entry for “response to defects”, and that the hyperlink provided yields a 404 error.

There was, however, an entry for “payment of excess page fees”, which I chose…and it doesn’t let you file a response unless you also pay the fee that the ILPTO says you owe.

So I filed it under “response to defects in national phase entry”, since even though this isn’t national phase entry but a divisional of one, Michael Bart and his team of PCT people at the ILPTO are competent, and will call me about this tomorrow or Sunday and we’ll get it straightened out.

What I want to know is, why did the system issue this letter in the first place?

Bonus: the filing receipt includes the notation in the photo below. The Hebrew is correct, but the English translation is not. It should read “Division from application no.:”, not “Request of division from”.

Why Doesn't the Israel PTO List the Amount of Renewal Fees in Its Reminder Letters?

Most practitioners who are responsible for patent renewal fees include these deadlines in their docketing systems. Nevertheless, as with everything else for which there's a deadline, redundancy is a good thing. Which is why it's nice that the Israel PTO sends warning letters a few months before patent renewals are due. This isn't just out of the goodness of their hearts: the Regulations in Israel require that such a letter be sent (although in those rare cases in which the ILPTO fails to send such a letter, the ILPTO takes the position that it is not bound by that Regulation, and that the onus is always on the patentee to docket its renewal fees). The USPTO, by contrast, only sends a letter after a renewal fee payment has been missed, saying, "Nyeah nyeah, you missed the payment, now you can pay but only with a penalty."

But why can't the Israel PTO include the amount of the renewal fee due in its reminder letter? The notice of allowance letter that the office sends to applicants says how much the issue fee (allowance fee) will be. And the renewal fee reminder letter tells the reader how much each month of extension will cost. So why can't the renewal fee reminder letter include the cost of the renewal fee itself? Granted, it's only a few mouse clicks to look up the fee schedule, and you can save a pdf version of the fee schedule for quick reference later, but still, it shouldn't be a big deal to include the amount of the renewal fee itself in the reminder letter.

Israel PTO, Where’s My Patent Application? (System Takes Money but Loses an Electronically Filed Application)

When the Israel PTO moved to electronic filing in June 2016, no one had thought about the importance of providing the filer with confirmation that a filing had been made and what had been filed. Upon discovering this, at least one veteran member of the profession went to Jerusalem and spoke with the senior ILPTO employee responsible for the new system, explaining that that’s not acceptable. The ILPTO’s response was to have the system create a document called an ishur klitat sal – literally “confirmation of reception of basket” – that would be emailed back to the filer, along with copies of the documents submitted, which confirmed that the files were now in the ILPTO’s electronic system.  And a day or two later, one could see those files in the public database.

Admittedly, it’s a clumsy way to do things. The USPTO’s EFS, for example, simply issued a filing acknowledgement, that listed the documents submitted (including filename) and a hash function value for each document, so that one could prove something had been filed if necessary later on. And sometimes there were delays in issuing the ishur klitat sal. But it worked. Filers also had the option of instructing the system to email them an ishur shlihkat sal, “confirmation of sending of basket”, which showed that a group of documents had been submitted.

Additionally, if a fee is involved, the system kicks the user out of the ILPTO’s filing system and into the general State of Israel payment system. Klunky, but that system immediately issues a payment receipt, and since you can’t get to the payment system until after you’ve submitted your documents, one effectively had immediate proof that something had been submitted and a fee paid.

I’ve been writing about these things in the past tense, but the fact is they’re all still true. You still get an ishur klitat sal for everything you file…except for new patent applications. Last year the ILPTO changed to a new system for filing new applications. There are some nice features in this new system (like the ILPTO populating the data fields for national phase applications with data taken directly from WIPO, and the option to have the ILPTO take the specification, claims, drawings and sequence listings directly from WIPO as well). But it has one glaring drawback, and that is that there’s no ishur klitat sal anymore for newly-filed patent applications. And there’s not even an option to send your yourself confirmation that a new application has been submitted. The best you can do is go into the system and see all the applications listed under your account, and check the status of each. If the status is listed as niklat (“received”), you’re good.

I note that even this is wonky: the system lists the date on which the entry was created, the date on which the entry was last modified, and the PCT application number if applicable.  If you want to see the documents that were filed, you have to go into the entry…but when you exist, the “last modified” date will be changed to the date on which you view the entry. Even if it’s an already-filed application and all you’re doing is looking at the data an documents on file.

This led to a new experience this week, one that’s still unresolved.  I filed a national phase application, clicked “submit”, and paid the fee. I immediately got the payment receipt. But no filing receipt was forthcoming. Not that day. Not the next day. Not the day after. So I went back into the system for filing new applications, and found that this application is listed as “draft”. Not “received”, not “transferred to payment”, not “ready for filing”. Draft. As if it was never submitted.

I wrote to the ILPTO about this, and while I was writing this post, received a response in which the writer told me that the application was listed as “draft” and that I should log in and submit it again. I wrote back and explained that the system would still not list the application as “received” because I wasn’t going to pay the filing fee a second time, and that in any event she hadn’t explained how this could have happened.

For now there’s nothing to do, because as I write the system is haywire and won’t us into the “file a new application” or “my filing” interfaces. (We can apparently still do follow-on filings under the old system.)

The good news is the 30 month deadline is still a few weeks away, so we have time to sort this out.

I wonder if the same programmers who work for the USPTO are working for ILPTO.

Follow up, a few hours later:

The new application part of the system came back online.The ILPTO person said that since payment was made, if I file the application that the system has recorded as "draft", it will take the new application and not request money. And that's what happened. I now have a filing receipt for the application. So the system knew payment had been made for this application, even though the application hadn't yet been filed.

Additionally, the ILPTO person said that in the next version of the system, there will be some way to warn people that an application was not successfully filed. That's good, because I wonder what would have happened if I had done this filing on the 30-month deadline - would I have to petition for late national phase entry? I would argue, no, the payment receipt is itself evidence that I filed, and the fact that the ILPTO's computer system hiccuped is their problem.

Anyway, all's well that ends well.

The Saga of Suspensions (or, You Can’t Make This Up, Installment No. 12? 15? I’ve Lost Track)

Once upon a time, the Israel PTO let patent applicants request suspension of examination at almost any point in time during the examination process, and it didn’t cost anything. You just wrote to the office and requested suspension. This isn’t something that’s explicitly set forth in the statute, but it’s no skin off the ILPTO’s back to put a note in its file, “Don’t examine this case yet”.

Then someone at the ILPTO got the idea that this worked too well, so that person decided to mess things up. Maybe someone thought that, in the age of 18-month publication, suspending examination was prejudicial to potential competitors. Maybe someone thought that, “Hey, we can make money off this by charging a fee!” Maybe someone felt that it’s important to keep the Office’s docketing straight and to not let prosecution lag too much. Maybe it was a combination of reasons.

Whatever the case, at some point the ILPTO changed its practice, and said that one could only request suspension after the applicant had answered the pre-examination letter (viz. filed a mandatory disclosure of publications relevant to patentability or cited by examiners elsewhere – think of an IDS in the USA – plus a list of corresponding cases elsewhere, or in brief, a Section 18 response) and before the issuance of the first substantive office action. And then, if the ILPTO said “ok” to the suspension request, applicants would be given one month in which to pay for the suspension.

I’ve written at length in the past about how that suspension fee is unauthorized by statute, but that’s not the focus of this post.

No, what I wanted to get at were further changes to the ILPTO’s suspension practice.

The first additional change happened a little over five years ago. The problem was that you had no way of knowing when the application might be examined, and since you could only request suspension before the first OA issued, it was common to request suspension shortly after responding to the pre-examination letter. And then within a few weeks you’d get the letter to pay the fee, and so you’d pay the fee within a month, and ostensibly the case would be suspended for year or whatever…and then after the suspension was over you’d sit around for another month or six or twelve or more waiting for the OA. Which meant that the fee was totally unnecessary, and that in reality, nothing had been achieved except wasting time (and client money) on some meaningless administrative tasks.

So the ILPTO said, “OK, you still need to request suspension after your section 18 response and before we issue a substantive OA, but now we’ll wait until the application is actually due to be examined, and then we’ll send you a warning letter, and if you pay the fee within a month we’ll suspend and if not the case will go to the examiner.”  Makes sense, although I was apprehensive that the ILPTO might miss overlook the fact that a suspension had been approved and issue an OA before we’d even been asked to pay money.

It turned out that the ILPTO was actually pretty good about issuing the “pay for your suspension now” letters”, and until this week I’d only had one case out of many in which it prematurely issued an OA. And in that one case, it wasn’t a big deal to get that OA withdrawn and have the “pay your fee now” letter sent.

Then last year they surreptitiously changed their “pay your money now” letter slightly. They changed it to say, “If you want the suspension you must request suspension again and pay the fee”.  Now, I admit, I initially missed that new part, and just paid the fee as I always had. But some months later, I looked through my docket and saw a case in which I’d paid the fee but hadn’t gotten the confirmation that the suspension had been granted. So I called the person responsible at the ILPTO and asked what we going on. She explained to me that we need to again request suspension, and that I should look at the letter. So I looked at the letter, saw the added verbiage, and asked her, “Did you think I was going to pay a fee because I’m a civic-minded person who wants to donate to the state’s coffers? Of course the fee is for the suspension, that letter is the only thing outstanding in the case, what else would I be paying money for?”

After some discussion, it turned out that the ILPTO’s computer system or work procedures had been modified, so that if the applicant doesn’t file a renewed request for suspension, the system isn’t aware that the fee has been paid, and it isn’t updated to confirm that the case is now suspended. So in that specific case, the employee manually updated the system and issued the “case is now suspended letter”.

But then I had to pay another suspension fee in a different case. So I went into the system to again request suspension, and found that (a) there’s no separate option for re-requesting suspension, there’s just “request suspension”, and (b) there’s no option to pay the fee when requesting or re-requesting suspension. So I uploaded the re-request for suspension, and then before submitting it did what I’d always done in the past when paying the suspension fee, viz. I went to the “request extension” option, then added payment for an extension. I then submitted both things at the same time and paid the fee. End of story, right?

Wrong. I get a call a day later from someone at the PTO: “You requested suspension but didn’t pay the fee”.

My response was along the lines of “Say what? Of course I paid the fee. It’s right there. I have the payment receipt!”.

“Well, I don’t see it, you’ll need to resubmit the request for suspension with the payment receipt.”

As I sad in the title of this post, you can’t make this up.

So I took the original suspension request, and added a text box with big red writing on the side: “NIS 2712 for 12 months’ suspension paid, receipt no. XXX”, and filed that.

ILPTO left hand, meet ILPTO right hand.

But then this week we had the piece de resistance, the crème de la crème, the cherry on top of the whipped cream. In a case in which suspension was requested two years ago, we got a first OA, without having been asked to pay the suspension fee. Second time that’s happened. As it turns out, the OA was pretty positive – it appears that, with some minor amendments similar to those made in another jurisdiction, we can gain allowance. But maybe the applicant wants to delay, so I reported the OA, and explained the option to either respond substantively, or request withdrawal of the OA and demand issuance of the “re-request suspension and pay your suspension fee letter”.

Then two days later, the ILPTO issued the “re-request suspension and pay your suspension fee letter”. But there was nothing in the letter to indicate that the OA itself had been withdrawn. So I wondered, “Will the system let me re-request suspension now”?

And – you know what’s coming – it won’t.  When I tried to submit another request for suspension, the system barked at me, “You can’t, nyeah nyeah nyeah, there’s an outstanding OA!”.

Now, I could pay the suspension fee, since the system will of course let me pay for an extension of time. But we saw from our other recent experience, since that payment will be classified by the system as part of an extension request and not a suspension request, the ILPTO won’t suspend examination.

So depending on what the client says, it looks like a few phone calls may be necessary to get the OA withdrawn and pay the suspension fee. Or maybe we’ll just answer the OA and proceed to allowance.

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.

USPTO Backs Down, Maybe, At Least Temporarily, From Its Docx Fee Grab

Last month I wrote about USPTO Director Kathy Vidal’s statement in October (at the AIPLA Annual meeting) that the PTO was going to deign to continue to let applicants file pdfs with their new patent application filings.  What I didn’t make clear – because it wasn’t clear to me – was that the USPTO was still planning to impose a $400 fee for anyone who didn’t do the initial filing in “docx” format.  I also noted that as of November 30, I still hadn’t seen anything in writing about this.

On December 19, Director Vidal published a Director’s Blog post, and on December 20, the PTO published a Federal Register notice, stating that indeed, applicants would continue to be allowed to file pdfs with their “docx” filings…but that as of January 1, 2022 there would be a $400 fee if you didn’t file in docx.  In other words, you could only file the pdf if you also filed the docx file.* As of July 1, you’d get hit with the $400 fee if you had the chutzpa to include a pdf version of the application with your initial filing.

(Because of the high likelihood of errors entering an application when the PTO converts it from the docx version submitted by the applicant to the version to be used by the PTO, most practitioners were planning to continue to file in pdf and to pass the $400 fee on to their clients. Since the PTO estimated that forcing applicants to file in docx would save the PTO $3.15 per application, far below the fee to be imposed, the more cynical among us viewed this whole docx thing as a surreptitious attempt by the PTO to increase its revenues.)

Enter David Boundy and the group of dedicated practitioners on Carl Oppedahl’s listserv groups. By the end of the business day on December 23, David had drafted and, with input from many, revised a letter to Director Vidal, collected signatures from 117 practitioners on that letter, and sent it to director Vidal. The letter explained some of both the practical and legal problems with proceeding with the requirement for “docx” filing, and asked that applicants continue to be allowed to file in either docx OR pdf for at least another six months.  The letter also hinted that if the PTO were to proceed as planned, it would likely have a lawsuit on its hands.

On December 24 Director Vidal phoned David and, in a nutshell, said that a notice would be published this coming week giving applicants “breathing room”.  We’ll see how much time that is, but the expectation is that, come January 1, we’ll still be able to submit our applications in pdf format, without penalty.**

This is a good first step, but considering the myriad ways in which the PTO has repeatedly lied to, deceived, misled, and misrepresented to the public, the Office of Management and Budget, and the Small Business Administration – even its F.R. notice of December 20 – it would be best if the PTO would rescind this docx nonsense.

*To add insult to injury, you’d only be able to include the pdf document if you filed using PatentCenter, the combined filing and document access system that the PTO has been working for several years, a system has many bugs (some that were reported in alpha testing three years ago that still haven’t been fixed) and still lacks many features. The PTO’s handling of PatentCenter has been much like its handling of docx: no one to talk to, and no responsiveness.

**According to Carl on his blog, AIPLA, IPO, and Brad Forrest also told the Director that docx is not ready for prime time.

Request of Israel PTO: Please Include the COMPLETE versions of the Regulations on Your "Statute and Regulations" Page

The Israel PTO's web site includes a page that has links to the Patents Statute and the relevant implementing Regulations, of which there are three sets: the 1968 regulations that pertain to most of the ILPTO's patent operations, the 1996 regulations adopted to enable implementation of the PCT, and the 1998 regulations regarding patent term extensions.  The 1968 regulations contain several addenda, which are rather important: the fees for various things, like the patent filing fee, extension fees, and issue fees are all established in the "second addendum".

So why does the version of the 1968 regulations found on the "statutes and regulations" page not contain the second addendum?

It turns out that a version of the regulations containing the second addendum - at least as it was updated in 2017, without reflecting the current fees as of 2022 - can be found on a different page.

Please, ILPTO, update the link on the "statutes and regulations" page to link to a version of the regulations that include the addenda.

Life Imitates...Life: USPTO Systems Down. Again.

[Note: this was originally posted at 11:40 local time. It's now 15:47 and it seems that some of the systems are back online. No explanation for the crash has been provided by the USPTO.]

On December 15, 1836, the US Patent Office was destroyed in a fire. (Hat tip Richard Schafer.)

On December 15, 2021, the US Patent Office's computer systems crashed. No e-filing of patents or trademarks, no checking databases, no access to electronic records. (But at least the page about McGruff the Crime Dog is still working!) The USPTO sent out an email warning people of the crash:

But if you click on the embedded link in the announcement to get more info, you'll find something extraordinary: during this outage, the USPTO is accepting patent and trademark correspondence, including new patent and trademark applications by email to [email protected] (for patents) or [email protected] (for trademarks).

This is extraordinary because presently, the USPTO is not authorized to accept such filing by email. This must be one serious mess for the USPTO to take this step.

This is not to say that everyone can avail himself of email filing. Before saying that one can file by email, the announcement includes a non-functional link to a web page that describes various filing options during a computer outage, and says that you only get to file by email if you can't use one of those alternatives. Those alternatives include fax, first class US mail with a certificate of mailing, and Priority Express Mail from the USPS. Is the USPTO going to demand proof that the filer couldn't avail himself of one of those methods of filing before he sent that email?  

[That webpage mentioning alternative filing methods also takes pains to point out that if you don't file electronically, you have to pay the $400 surcharge for non-electronic filing ($200 if you're a small entity).  I guess the USPTO isn't subject to legal doctrines like frustration of contract. Or as we might say in these parts, הרצחת וגם ירשת?. (Look up Elijah's reproof of Ahab for the context.) The last time there was a major outage of this sort, then-Director Andre Iancu had the decency to waive that fee post-facto, as discussed here. Let's hope that the current USPTO powers-that-be will be similarly reasonable this time around.]

Amazingly, just two days earlier, Carl Oppedahl blogged about this very problem, as the USPTO has just published a Federal Register notice in anticipation of an planned move of its back-up servers away from the same place where its regular servers are housed. Carl noted that there have been four serious outages of the USPTO's systems since 2014; the current outage constitutes the fifth such failure.

For those of us who regularly file things at the USPTO, this comes against the backdrop of the USPTO's insistence on migrating to a new system, which it calls PatentCenter, which it insists will have all the functionalities of public and private PAIR as well as EFS.  As explained in a letter drafted by Carl, signed by seventy four practitioners (including yours truly), and sent by Carl earlier today to Drew Hirshfeld, who is nominally in charge of things at the USPTO right now, so far PatentCenter is a disaster, and the USPTO has refused to listen to users who explain what's wrong with it.

As a colleague once noted, technology is great...when it works.

 

On Living in Chelm and The Hiding of Ulterior Motives

Today is the eve of Passover, making this a short work week here in Israel, for those of us fortunate enough to still be working during this COVID-19 thing – a full 25% of working age Israeli adults sought unemployment compensation in the past week.  Nevertheless, for those who have been paying attention, it has been an interesting week in the IP world in Israel.  But first a bit of background.

On March 21 the government of Israel (what in the USA would be called the cabinet, except that under Israel’s parliamentary system it’s the entire cabinet and not just the Prime Minister that decides many executive matters) decided to reduce public sector expenditures across the board.  The result is that many state employees, including many from the patent office, have effectively been furloughed since then.  As we reported earlier, the ILPTO sent out a notice about the steps it was taking to mitigate the effects of this decision. 

Now the Knesset is considering adopting emergency legislation that would push off by 90 days the deadlines for many acts in connection with administration of the state – either decisions or actions that the state is supposed to take, or actions that individuals (people or organizations) need to take.  And the draft legislation would give the government the option to extend those deadlines by an additional three months.

In combination, for those of us with a narrow focus on IP, these two things have created a perfect storm, not so much for applicants or IP owners, but for IP practitioners and for the ILPTO staff. 

Let’s start with the furloughing of ILPTO staff.  As a result of the government’s March 21 decision, many patent examiners and other at the ILPTO have been sitting home since then, doing nothing.  I suspect many of them are not presently getting paid.  Applications going unexamined also contributes to the examination backlog that the ILPTO had for several years hitherto been steadily decreasing, a result that is unfair to all applicants attempting to secure IP rights.  And for IP firms for which the reporting of Office Actions from ILPTO examiners is a significant source of income, this means that an important revenue stream has just dried up.   

But what’s Chelm-like about the March 21 decision being imposed on the ILPTO is that, unlike most state bodies, the ILPTO is self-supporting.  The ILPTO doesn’t run off of taxes paid by Israeli citizens or people transacting business here.  It runs off the fees it collects each year from the parties that utilizes its services, fess that more than offset the ILPTO’s operating budget.  Furthermore, following a program instituted by previous Commissioner Asa Kling, the ILPTO is set up for examiners to work from home, as many of the examiners already did so prior to the corona outbreak.  So by telling examiners they’re not allowed to work, even from home, the government isn’t reducing expenses. It’s reducing revenue – by ensuring a period in which no patent applications will be allowed, thus ensuring no payment of allowance fees, and by not giving patent practitioners work that they can bill to their clients and then pay of portion of to the state in the form of taxes on the payments for that work.  At a time when many parts of the economy are tanking, it’s not only foolish, but inexcusable to shut down an office that generates revenue for the state.

Then we have the draft legislation.  If all it said was that all deadlines falling between dates X and Y would be extended by three months, across the board, that would be easy to implement.  But, of course, some things really shouldn’t be extended.  For example, someone who’s been arrested for an alleged crime deserves a prompt arraignment, but that means that the courts need to be at least partly open for business.  And as soon as you start making exceptions in one area, others jump in clamoring for an exemption from the legislation, insisting that in their particular sphere of operation, it’s important that deadlines not be extended.  In some cases, it may be that deadlines in question really shouldn’t be extended.  But in other cases…

Stepping back for a moment from my position as someone whose clientele includes companies that file patent applications in Israel, and therefore who has a personal interest in keeping the ILPTO running as close to normal as possible, it seems to me that certain deadlines in the ILPTO should not be extended: the deadlines to file notices of opposition to the grant of a patent, and deadlines for the payment of renewal fees. 

I mention the former because (a) opponents of the grant of patent applications, whether those opponents are based in Israel or outside, have generally been following the progress of the applications they are considering opposing, so they know when the opposition deadline is going to arise, (b) all that’s required is to submit a notice of opposition – a one-line letter – plus a fee, with the substantive arguments being due later and with a deadline that the Commissioner has discretion to extend, and (c) the applicant, conversely, has no vested rights until the opposition procedure is concluded and a patent granted, and since the draft legislation doesn’t talk about extending patent rights another three months, it’s important that the institution of oppositions not be delayed, especially since opposition proceedings anyway tend to take time from the life of the patent. 

As to the payment of renewal fees, it seems to me that there’s no reason to extend these deadlines: for the patentee, the deadlines are known years in advance, and the amounts in question are also known; and for competitors who are following the life of a granted patent, it’s important to know if a patentee is no longer interested in protecting a particular technology.

It’s also clear that deadlines for the Israel PTO, acting as PCT receiving office, search authority or examination authority, cannot be unilaterally extended by the Knesset (and any attempt to do so could have adverse consequences for local PCT applicants relying such an extension).  Those deadlines can only be extended by amendment of the PCT itself. 

But I don’t see any harm to applicants in uniformly granting an extension to enter the national phase in Israel: they can still file at 30 months if they wish to do so, but if as a result of the corona situation there’s some difficulty in making filing decisions or in their cash flow, no real harm will come to those applicants from extending the deadline by a few months. 

On the other hand, considering that most patent filings in Israel are national phase filings, granting such an extension might have an impact on the ILPTO’s workflow – in the three months following the statutory extension, there will likely be a higher number of filings to process than usual – and its cash flow, as noted above.  The ones who would be most impacted by such a statutory extension would be those practitioners who rely on such filings as a significant part of their business, a point to which I’ll return below. 

Another deadline that I think could be extended is the deadline for filing patent term extensions for pharmaceuticals.  In such cases, there’s a significant burden on the patentee in terms of the documentation it needs to submit, a burden that could be affected by the corona virus situation.  And since normally such requests are submitted several years before the patent is due to expire, a difference of three months in the filing of the PTE request wouldn’t significantly affect the local generic drug manufacturers which might be impacted by the grant of the PTE (and which will retain the opportunity to oppose such PTE grant before it occurs).

Now back to this week.  On April 5, the Commissioner of Patents held a Zoom session to discuss the draft legislation, which by that point included exemptions for PCT international phase deadlines and the deadlines for payment of renewal fees (i.e. they would not be extended), but not for PCT national phase deadlines (which therefore would be extended).  

From a sociological standpoint the session was interesting.  Among other things, after about a 10 minute introduction from the Commissioner, nine people spoke (some more than once), but that discussion (roughly 2/3 of the time, if not more) was dominated by four partners from the same organization, one of the biggest IP offices in Israel.  Their view, exactly opposite to my own, was that (a) PCT national phase deadlines shouldn’t be extended and (b) renewal fee deadlines should be extended.  They gave various reasons for their positions, e.g. not wanting their offices to deal with a crunch of filings when the extended deadlines expire, and not wanting the ILPTO to be burdened at that point either.  But as noted above, that’s not really the situation: deadlines falling with the period in question – between March 10 and June 30, 2020 – would be extended by 90 days.  That doesn’t mean that come July 1, there will suddenly be a rush of filings to get 90 days’ worth of national phase applications in.  It just means that on July 1, filings that were initially due on both April 1 and July 1 will be due.  So while that may amount to twice as many filings as normal for July 1, it’s not something that can’t be dealt with. They also said if the national phase deadline was extended, docketing programs will need to be adjusted to reflect the extended deadline.  Considering that many docketing services constantly update their systems to reflect changes in the law in various countries, I don’t think a temporary change in Israel would constitute a significant impediment.

As for renewal fees, the assertion was that companies may need more time to make decisions about whether to renew or not.  Yet the possible need for more time to decide whether to file national phase in Israel wasn't mentioned by the four in the discussion of PCT national phase deadlines.

What none of the four explicitly stated was their personal interest in the matter: as partners, they employ many people, and national phase filings are a cash cow for them.  If potential PCT national phase filers are given the option of delaying their filings by 90 days, they might exercise that option, which would keep the firm’s revenue stream lower than usual.  Which might mean having to reduce the partners’ draw during that period. 

As for renewal fees, the office in question has a contract with at least one and possibly more than one of the big renewal fee companies.  What I gathered reading between the lines of what was said is that they don’t demand payment up front, and that paying out renewal fees now when they may not get compensated later could be disastrous for the partners…er, the firm.  (By comparison, I work with a renewal fee company that demands payment in advance.) 

In this respect, for the attuned listener, the Zoom session also highlighted the differences between large firms and small firms.  Small firms tend to have little patent prosecution or renewal fee work in Israel, and tend to concentrate on drafting and filing new applications, which is work that has been less affected by COVID-19.  They don’t have as many salaries to cover, nor are the proprietors likely to be accustomed to as high a style of living.  As Hillel the Elder said, “The more flesh, the more worms.”

We’ll see were things end up.  Yesterday, the heads of three trade associations sent a letter to the Justice Minister Download Letter, encouraging him to reopen the ILPTO for full business, as well as presenting views on the draft legislation that align with the view of the four speakers on Sunday.  I’m in full agreement about getting the ILPTO back up to full examination speed, if possible.  And while I disagree about extending deadlines for PCT national phase entry and renewal fees, ultimately, I don’t feel terribly strongly one way or another about how the matter is resolved.  What will stick with me was the concerted effort to mask ulterior motives, ostensibly in the name of the common good.  It’s a fair bet the people involved won’t tell their clients that they lobbied to maintain PCT national phase deadlines in place.

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

In the Wake of Computer System Outage, USPTO Does the Right Thing

Due a major computer glitch, from August 15 through the 23rd inclusive, users of the USPTO’s PAIR system for monitoring patent applications, as well as its electronic filing system (EFS), were unable to access data on applications or to electronically file documents, including new applications. 

There’s much that could be and has been written about this system outage, but I want to focus here one specific issue. In order to encourage applicants to file their applications electronically rather than in paper, significant discounts are given for new applications that are filed electronically.  No EFS means no electronic filing, only paper filing, and hence no discounts.

Any five-year-old can tell you something’s not fair about the USPTO allowing its system to crash, and then charging applicants more as a result of having made it impossible to file electronically. And this wasn’t lost on USPTO Director Andre Iancu, who announced this week via a Federal Register notice that applicants who had been forced to file in paper and met certain criteria would be able to receive refunds of the difference between the discounted and full fee rates, or to pay at the discounted rate if they haven’t yet paid. 

My reaction to this was, it’s reassuring to see the Director do the right thing. I’m not sure all of his predecessors would have done the same under similar circumstances.

I was therefore somewhat, but not wholly, surprised to hear some lawyers respond by questioning this announcement on the grounds that the Director doesn’t have the statutory power to do this, implying that they might be putting their clients’ future patents at risk if they ask for and receive the fee refund or now pay at the discounted rate, because this could become an issue during litigation.

35 U.S.C. 21(a) reads,

(a) The Director may by rule prescribe that any paper or fee required to be filed in the Patent and Trademark Office will be considered filed in the Office on the date on which it was deposited with the United States Postal Service or would have been deposited with the United States Postal Service but for postal service interruptions or emergencies designated by the Director.

The Doubting Thomases apparently read that last clause as, “but for postal service (a) interruptions or (b) emergencies, which postal service interruptions or emergencies are designated by the Director”.  In other words, according to some, the Director only has the power to designate postal service emergencies but not other kinds of emergencies. 

However, it seems to me that that phrase could be read as “but for (a) postal service interruptions or (b) emergencies designated by the Director”, where “designated by the director” applies at least to “emergencies”, and possibly also to postal service interruptions.  In which case the Director was within his authority to issue this week’s FR notice, since he is now designating the system outage as an emergency (which for people filing things at the USPTO it was).

But let’s assume for the sake of argument that the first reading proffered above is the correct one.  I still don’t think that precludes the Director from doing what he did. The FR notice says that the USPTO will treat certain applications as having been filed electronically. How is it not within the Director’s purview to decide to regard a certain class of applications as having been filed electronically, especially when the applicants sought to file electronically and it was the USPTO itself that prevented them from doing so?

For at least three reasons, I find it difficult to see how, years from now in litigation, any judge will buy into the argument that a patent is invalid because it was filed in paper during a prolonged computer system outage at the USPTO, and the USPTO allowed the applicant to later pay at the discounted rate or refunded the difference back to the applicant.

First, this is the sort of thing that the Federal Circuit has tried to keep its hands off. See e.g. Aristocrat Technologies v International Game Technology, 543 F. 3d 657 (Fed. Cir. 2008), in which the CAFC refused to second-guess the PTO’s decision about revival of an unintentionally abandoned patent application.

Second, there will no doubt be widespread reliance on this FR announcement; I doubt the CAFC will want to retroactively invalidate hundreds of patents on the grounds that the USPTO collected too little in fee money at the time the applications were filed.  (Recall that on the question of whether or not a continuation could be filed on the day the parent patent issues, a practice allowed by the USPTO for many, many years, the CAFC refused to retroactively invalidate the thousands of patents that would have been affected.) 

And third, only a complete jerk would say that the USPTO’s attempt to correct its failure to keep its systems online – by treating certain applications as having been filed electronically even though they weren’t – deserves reprobation rather than approval, in the form of invalidation of patents in which reduced fees were effectively paid.