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Category: News

Government Trademark Fees To Rise

The United States Patent and Trademark Office will be increasing certain trademark fees on January 14, 2017. The USPTO is unique among government agencies in that it is a profit center for the US; it generates more revenue for the government than it expends in operating costs.

Most, if not all, of the increasing fees are for paper filings. Trademark applications filed by paper are much more time-consuming than those lodged electronically through the Trademark Office’s online filing system. The filing fee for paper applications is nearly doubling to $600. It appears the costs associated with pursuing a registered trademark are not going to change.

Trademark fees are set at levels projected to cover future costs, including operating costs and reserve funds. The number of applications filed, and the number of registered trademark issued, continues to climb this year, as it has for the past six years. The Trademark Office is predicting that this will not change in the near future. Further, the Office desires to not increase the pendency of a trademark application, which currently averages 9.8 months, despite the predicted increase in trademark filings. Further, the Trademark Office is upgrading its IT systems.

The Trademark Office has chosen to fund these changes and improvements by shifting the fee burden to those still filing by paper. I don’t have figures for the number of applications filed electronically versus in paper, but I find it fascinating that there are apparently enough paper filings that these fee increases will bring in enough money to fund its changes. As the Office puts it: “The fees will allow the Office to further USPTO strategic objectives by: Better aligning fees with the full cost of the relevant products and services; protecting the integrity of the register by incentivizing more timely filing or examination of applications and other filings and more efficient resolution of appeals and trials; and promoting the efficiency of the process, in large part through lower-cost electronic filing options. The changes will also continue to recover the aggregate estimated cost of Trademark and Trademark Trial and Appeal Board (TTAB) operations and USPTO administrative services that support Trademark operations.”

Bicycle Saddle Patent Litigation

bicycle-patent-on-saddle-1 bicycle-patent-on-saddle-2Several bicycle manufacturers around the world have found themselves under attack from an Australian company, Icon-IP, that is suing for infringement of two bicycle saddle patents.

Icon IP had previously twice sued Specialized Bicycle Components, Inc. in 2013 in US courts for its use of a split saddle. Specialized, of course, makes many of the components it uses on its own bicycles, the seat included. Split saddles, those with split noses, or with longitudinal central slots, have become much more popular in the last 5-10 years, with many manufacturers now offering such saddles stock with a new bicycle. Specialized successfully dismissed one of those suits and settled another.

Now Icon IP is suing Merida Industry and well-known saddle manufacturer Selle Royal in Germany for infringement, and has given notice to Giant Bicycles that it may also be receiving a legal complaint.



Patent Examiners Mostly Accurate in Time

The Office of Inspector General, following up on a report from last year about a patent examiner who had received $25,000 by falsely claiming worked hours, has just released a report on two concurrent studies of about 80% of the 10,000 examiners at the United States Patent and Trademark Office. The study found that while most examiners accurately report their hours and time worked, there is still a large amount of waste in salary, overtime, and bonuses paid out.

The OIG conducted a 9-month study as well as an overlapping 15-month study in looking at time spent. It compared timestamp data from several independent sources within the Patent Office with hours reported by the examiners themselves. The OIG notes that its study was “conservative,” excluded significant amounts of unsupported hours, and thus likely underestimates the number of hours falsely reported, perhaps by as much as half.

The short and long studies were generally consistent in their findings. Approximately 180,000 examiner-hours each year are unsupported by any electronic records, timestamp, or method of verification. It appears therefore, that those hours were wasted, in that compensation was paid for them without any work being performed in return. In the 9-month period, $8.8 million dollars was potentially paid out on unsupported hours; in the 15-month period, $18.3 million was paid out.

Much of the waste comes from a few of the examiners. About 3.5-5% of the examiners accounted for 39-43% of the waste; at least 10% of their hours were unsupported. Of those, many had above-average performance ratings, and about 10% essentially took 3 days off every 80 work hours. One-quarter of the wasted compensation was for overtime work. Further, had the compensation been paid out for actual work, the OIG found that the backlog would have been reduced by 7,500 applications in 9 months and by 16,000 applications in 15 months. This is quite troubling when one considers that most applicants wait 1-2 years for an application to receive examination.

The OIG concluded that there were several reasons for the waste. First, some examiners have realized that they can game the system by falsely reporting time. Second, some examiners are very efficient and get their work done faster than the time allotted yet still report the full time. Other examiners complete more work in the allotted time but then claim overtime. The time allowances and production goals have not been updated since 1976. The OIG recommends enhancing the time-tracking systems and updating production goals within the art units.

Patent Stakeholder Training on Examination Practice and Procedure

The Patent Office has begun offering a Stakeholder Training on Examination Practice and Procedure (“STEPP”), part of its Enhanced Patent Quality Initiative in which it improves quality and communication between the Patent Office and the public. The Patent Office states: “Training delivered through STEPP is designed to provide external stakeholders with a better understanding of how and why an examiner makes decisions while examining a patent application. In person courses are led by USPTO trainers and based on material developed for training employees of the USPTO.”

The STEPP program is intended to increase the transparency by educating the public about examination practice and procedure, provide perspective to attorneys and applicants about how an examiner approaches an application and an office action, and aiding patent attorneys in compact prosecution by showing them how an application is examined under the MPEP.

This program is a good program. I recently attended a presentation by the Silicon Valley Patent Office which serves the west coast on Patent Office operations. It was interesting and helpful, but some of the audience tried to use it as a personal gripe fest about examiners they had faced. That same waste is a concern I have with the program. More importantly, however, one issue with this program is that apparently is only available if you are at the Patent Office, or perhaps one of the regional offices. Expansion to WebEx or other online training should be a goal.

Patent Office Power Outage Shutdown

The Patent Office went down hard on December 22, 2015. A subdued Facebook post initially said: “We are currently experiencing some technical difficulties with some of our online systems, but we are hard at work and intent on having services back on line as soon as possible. Thank you for your patience, and stay tuned for details.” However, very quickly it became clear that the incident was major – catastrophic really. For some time, most (if not all) of the pages at upsto.gov were displaying 404 messages, including even the blog directed toward posting updates about the status of the electronic filing systems.

Apparently, the power supply lines at the USPTO incurred a “malfunction,” causing significant damage to two power filtration systems which otherwise provide power in a regulated form to the USPTO. These filtration systems are huge and could not be replaced quickly or easily.

The outage took out all of trademark and patent filing, searching, payment, and examination capabilities, effectively shutting down nearly everything the Patent and Trademark Office, and patent and trademark lawyers, do. For some of us, it was a nice week-long break when many of are taking holiday. For others, however, it was a stressful nightmare of re-learning Priority Mail Express (formerly Express Mail) rules and trying to get the Post Office – sometimes through horrible weather – to make filing deadlines. Filing by mail was still an option – but very few, if any, practitioners file by paper anymore, and I would guess that most who don’t file by paper have no clue how to file by mail. Another good reason to file early! The Office eventually did declare a few of the down days as federal holidays, purportedly giving applicants until the next (operational) business day to file. However, I cautioned colleagues not observe this PTO-granted grace period, as it was not clear that the PTO had the statutory authority to declare a holiday in this manner to toll both domestic and foreign deadlines. Better to mail it in that to find out years from now in litigation that the PTO “holiday” counted for nothing.

The systems are now up, but I have been warning clients this week to get me everything early because I believe the filing system is extremely fragile right now, given that it will probably be more heavily loaded by backed-up filings from the past week.

While the explanation that the Patent Office providfed is not entirely clear – and few details beyond this have been revealed – I am sure the Office did work tirelessly to get the systems back up. And now they are. What we can learn from this how fragile the filing system is. Yes, it apparently took a major power surge to destroy the electronic systems, but when it did, there was no backup. Or, there was a backup, but the backup was tied to a backbone common to the main system – which really isn’t a backup at all.

Practitioners have complained for years that the electronic filing system is antiquated, but the Office has failed to update it. Perhaps this will instigate a technology change at the office that represents innovation leadership in the world.

Trademark Law Ruled Unconstitutional

The Trademark Office’s prohibition phoenix trademark applicationsagainst the registration of disparaging trademarks was struck down as unconstitutional yesterday. Many have questioned for a long time how a statute could legitimately refuse to register some marks because of their moral quality. Nevertheless, for decades, federal statute has stated that a trademark will be refused registration if it “consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”

The US Court of Appeals for the Federal Circuit has declared that Section 2(a) of the Lanham Act unconstitutional as violating the First Amendment. The majority stated that “”The government regulation at issue amounts to viewpoint discrimination, and under the strict scrutiny review appropriate for government regulation of message or viewpoint, we conclude that the disparagement proscription of § 2(a) is unconstitutional.”

The case arose when a band applied to register the mark THE SLANTS in connection with live music entertainment services. The Trademark Office, however, refused protection of the mark as derogatory of people of Asian descent. The band appealed the case through several layers of administrative and judicial courts. At the Federal Circuit Court of Appeals, the government advanced an academically interesting argument: that the Lanham Act does not actually prohibit speech at all, but rather only prohibits the registration of some types of speech. It reasoned that because the government acts as the gatekeeper for trademark registrations, registered trademarks become government speech and can thus be regulated without implicating the First Amendment at all. The trademark owner remains free to practice the speech, whether registered or not. The Federal Circuit disagreed, finding that the law was impermissibly “created and applied in order to stifle the use of certain disfavored messages.”

A similar question arose most recently in the public eye when the Washington Redskins lost their 60-some year-old trademark registration because it was deemed disparaging of Native Americans. The team has appealed the decision, and it is expected that this newest case will give them some heavy ammunition. However, the REDSKINS case is now in front of the Fourth Circuit Court of Appeals, which is neither above nor below the Federal Circuit. That means that THE SLANTS decision is non-binding on the Fourth Circuit Court, but can still be persuasive. If the Fourth Circuit finds that Section 2(a) of the Lanham Act is not unconstitutional – which it may or may not do depending on the questions presented to the court and the sua sponte aggressiveness of the judges – the question will be ripe for the Supreme Court to settle.

Patent Office Opens San Jose Office

The Patent Office has been openipatent officeng regional offices to better serve inventors in the US.  While Alexandria, Virginia is headquarters for the Patent Office, within the past 3 years, satellite offices have been opened in Detroit and Denver.  Dallas is scheduled to open later this month.

The USPTO opened the doors to its Silicon Valley Regional Office on October 15.  The new office is intended to entrepreneurs, independent inventors, and companies in the West Coast region advance cutting-edge ideas to the marketplace, grow their businesses, and more efficiently navigate the US patent system.  Obviously, the location was a strategic one, with San Jose marking the center of Silicon Valley.  Patent Office Director Lee said: “Today’s formal office opening is a huge step forward for innovators throughout the region.  This office will be a one-stop shop of resources for those who need it at every step of the business lifecycle.”

The new office will assist the USPTO in fostering and protecting innovation. USPTO services will be readily accessible to all applicants and the office will serve as a hub of education and outreach to the West Coast region.  The office will benefit from hiring local talent as both patent examiners and Patent Trial and Appeal Board (PTAB) judges.  The new office in Silicon Valley will help entrepreneurs bring their products to market quickly, as well as provide resources tailored to local startups.

When the Dallas branch is opened, the Patent Office will have a presence in each of the four continental time zones.

Patent Office Automated Interview Request

The Patent Office has started a new program called “AIR,” which stands for Automated Interview Request. The program allows patent attorneys, agents, and applicants to file online requests for interviews with Examiners in their cases. Examiners can sometimes be difficult to get hold of, as many of them work non-standard schedules or practice “hoteling,” in which they work from home. They rarely answer the phone, though most are very good about returning calls. The AIR program is designed to improve the communication between patent attorneys and examiners in scheduling interviews. One issue I see with the AIR form is that it does not allow the applicant or applicant’s representative to request an interview with the Examiner and his or her supervisor, which is often desired. For this, I presume one should still call to request the interview.

By submitting this type of interview request, the pending patent application will be in compliance with the written authorization requirement for Internet communication in accordance with MPEP §502.03. This authorization will be in effect until the Applicant provides a written withdrawal of authorization to the Examiner of record.

Patent Office Website Features will not be Accessible to Chrome Users Soon

Some of the features of the Patent Office website, such as EFS-Web and Private PAIR, will no longer be accessible to users of Chrome after this month. Those programs are essential tools for a patent attorney, patent agent, or any inventor who has filed an application pro per. They are the portals to filing and accessing a patent application and its status and correspondence. Those two features also rely on Java.

In April 2015, Google Chrome removed the default ability to use the Java plug-in for browser version 42. This impacts one’s ability to access EFS-Web and Private PAIR because Java is required for your authentication into these systems. Currently, Chrome has a temporary workaround that will allow you to use the Java plug-in so that you can continue to log into EFS-Web and Private PAIR. However, this workaround will only work through September 2015, when Google Chrome plans to end their support for Java plug-ins with their newest browser, Chrome versions 45 and above. Therefore, Chrome users using version 45 and above will no longer be able to use the workaround and thus will not be able to log into EFS-Web or Private PAIR. Oracle recommends the use of alternative browsers such as Firefox, Internet Explorer, and Safari.

Although the above browsers should continue to work with EFS-Web and Private PAIR, there is always a possibility that these providers may decide to discontinue support of Java plug-ins as well. The USPTO is apparently investigating if there are possible strategies to mitigate the immediate impact, and is working on a longer term plan to improve the overall authentication process.

Direct and Indirect Patent Infringement – Evolving Standards under Akamai v. Limelight

Though I’m not a litigator, infringement concerns are a primary concern for many of my clients. Those concerns evolve with time. Despite decades of case law, the courts are still developing some of the fundamentals of patent infringement. There are two basic types of infringement: direct and indirect (which is further subdivided as contributory infringement and induced infringement. Direct infringement is – generally – infringement that you yourself participate in: you sell something infringing, you make something infringing, you use something infringing, etc. Indirect infringement, on the other hand, occurs when you contribute to another’s infringement, make another’s infringement possible, or benefit from another’s infringement.

Yesterday the Federal Circuit issued an opinion regarding direct infringement after the Supreme Court gave its opinion and told the Federal Circuit to take another look. The case involves the question of whether, when a patent is directed to a method comprising a number of steps, a single party can infringe that patent even if it did not practice every single one of the steps. In another way, the case asked whether a defendant may be liable for inducing patent infringement when no other party has actually directly infringed the patent. As may seem immediately obvious, the Supreme Court said no; induced infringement will not lie unless there is at least a direct infringer first.

The Federal Circuit has now expanded the definition of infringement to include situations where all of the steps, while not necessarily being performed by the defendant, may still be attributed to the defendant. Now, liability can be found where the defendant “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.” This broadens the scope of liability beyond the earlier rule which required that the defendant either perform all the steps, use an agent to perform some or all of the steps, or contract with another or enter a joint venture to perform some or all of the steps. This new rule adopts the Supreme Court’s analysis of induced infringement under copyright law, which was used in the seminal case of MGM v. Grokster on internet-based peer-to-peer music file sharing (which happens to have been the subject of this author’s Law Review article).

The ruling indicates that infringement can now be found where a party performs some of the steps of the method claim even if the other steps are performed by another party.