Tuesday, October 27, 2009

An Urgent Letter and a Time-Sensitive Proposal to David Kappos

DAVID KAPPOS, Director, United States Patent and Trademark Office

Everyone writes Open Letters and Modest Proposals. My letter and proposal, by contrast, are URGENT and TIME-SENSITIVE, respectively.

David Kappos,
Under Secretary of Commerce for Intellectual Property
and Director of the United States Patent and Trademark Office (USPTO)
P.O. Box 1450
Alexandria, VA 22313-1450

Dear Director Kappos:

As you know, Supreme Court oral argument in Bilski v. Kappos (n.1), is scheduled to take place on November 9.

I urge you, however, to ask that the case be dismissed as moot.  You will moot it by withdrawing the rejection under 35 USC 101 against the Bilski application so that the application can be returned to the examiner for complete examination. If any Bilski claims survive, amended or not, as patentable over the prior art and supported by enabling disclosure, then, and only then, should anyone evaluate them for patentable subject matter ("PSM").

If you do that, you will truly demonstrate that the Patent Office is UNDER NEW MANAGEMENT.

Deciding whether there is patentable subject matter in claims that may never issue -- because, unless amended, they are invalid as anticipated, obvious or not enabled -- is akin to rendering an advisory opinion (something federal courts are not at liberty to do). It is both inefficient and illogical.

Until claims are in condition for allowance, grappling with whether they would confer exclusive rights to "unpatentable subject matter" is a diversion from the real business of the Patent Office, a misapprehension of the role of claims, a confession of ignorance of the salubrious and time-honored concepts of substantive patent law (anticipation, obviousness and enablement), and a betrayal of the Constitutional idea that progress is promoted when inventors receive temporary exclusivities. With your years of experience in practical patent law, I know I'm not telling you anything new.

The Patent Office hires examiners (n.2)with education in the areas of endeavor that patent applicants address. Examiners are not expected to be philosphers. Their primary job is to find prior art. See, e.g., the 2008 Patent Office Report at page 13  (n.3).

Last month, you quoted Mark Twain (n.4) about the need for a good patent system and good patent laws, and you and he are right: Good patents promote progress, and good patents are what patent offices issue after good prior art searches.


Please then, pull the plug on Bilski. Then send a directive to the entire examining corps to restrict their rejections to 102, 103 and 112. Compliance with those statutory requirements is, after all, the stated purpose of 101: it says that people may obtain patents on new and useful inventions "subject to the conditions and requirements of this title."

Next, create a special 101 group, staffed by philosophers, whose job will be to make sure that claims in condition for allowance meet the latest judicial pronouncements about "patentable subject matter."

Will this run afoul of Supreme Court law? No. See below concerning the "threshold inquiry" misunderstanding.

Will applicants complain that their claims are getting too good a prior art search, and that in the bad old days, if they could overcome a 101 rejection, the examiners would allow their claims regardless of the prior art? I don't think so. Will third parties sue you for spending too much of your resources on searching the prior art? Again, I don't think so. Will the Federal Circuit fault you for caring about prior art, first and foremost? That one's doubtful, too.


There is precedent within the Office for leaving certain thorny issues until claims are in condition for allowance. Two examples under current practice are provisional double patenting rejections and restriction requirements(n.5).

There is also a historical example: the short-lived experiment of having the Patent Office investigate allegations of violations of the duty of candor, the so-called "Fraud Squad" (n.6). Underlying that idea were concepts directly applicable to PSM investigations by the Patent Office:
1. Expertise
2. Efficiency
3. Ripeness

Expertise: Like inequitable conduct, the question of whether subject matter is patentable is something that ordinary examiners should not have to address during ordinary examination. It is outside their technical expertise.

Efficiency:  The Patent Office should deal with thorny yet non-technological matters by having a small group of special employees who can develop expertise in this sort of analysis. Also, allowable claims are fewer in number and often narrower than original claims, and they reside in far fewer applications than the totality of all applications filed. The time and effort needed to evaluate PSM questions will be reduced if the analysis is deferred until after examination under 35 USC Sections 102, 103 and 112.

Ripeness:  The public is not at risk from patent claims that never issue. A patent that never issues confers no right to exclude anyone from doing anything. Only issued claims have legal effect. See, e.g. Aro (Supreme Court 1961)(n.7) and quotations collected in Johnson & Johnston (Fed. Cir. 2002) (en banc) (n.8). Thus until the claims are deemed to be in condition for allowance, the question of whether or not they cover "patentable subject matter" is unripe.

Historically, the claims that have come under appellate scrutiny for PSM have been broader than the enabling disclosure, or have seemed to be - or even had previously been found to be, or are subsequently found to be  - obvious.  By waiting until the claims have been thoroughly examined for obviousness, and perhaps amended or abandoned as a result, the number of claim that have real PSM defects will very likely be reduced substantially.


The patent office's own rules (the Manual of Patenting Procedure (MPEP)) require examiners FIRST to do a prior art search. Examiners must also include ALL grounds for rejection in the first Office Action. This practice, called "compact prosecution," is described in MPEP 2106 (n.9). and discussed by Judge Newman in her dissent (n.10) in In re Bilski (Fed. Cir. 2008) (en banc)(n.11). I also discussed it in my amicus brief to the Federal Circuit(n.12).


An application with no allowable claims that is then abandoned by the applicant is nevertheless beneficial to the system: when the application is published (and most applications are), its disclosure is good prior art against the applications of other people who seek the same claims or obvious variants of them.


Once you have freed your examiners to focus on the prior art without pressure to analyze claims for PSM, you can work on ensuring that the next time a court considers this issue, it has the Patent Office's public declaration of the reasons that the PSM question should only be considered with respect to claims fully vetted for compliance with the substantive statutory requirements.

Personally, I think that if the Patent Office makes sure that claims meet the "requirements of this title" as 101 says, it will never have to reach the 101 PSM inquiry. (Show me a claim that someone without much familiarity with patent law thinks covers "unpatentable subject matter" and I'll show you a claim that is either invalid over the prior art or not enabled.) But let the Patent
Office do the experiment. You will get plenty of help from creative applicants, whether they love or hate the patent system, I am sure.


Another good reason to get Bilski v. Kappos (n.1) off the Supreme Court's docket is that your brief to the Supreme Court (n.13) is incomplete. It has zero occurrences of "enabl!". Yet surely you, Director Kappos, when you first read O'Reilly v. Morse (n.14), Parker v. Flook (n.15), and many another case decided on PSM grounds, noticed that what the Court did not like about the claim at issue was that it was not enabled. The Court just lacked the sophistication to identify this as the problem, and instead took refuge in the seemingly more accessible concept of unpatentable subject matter. Multiple amici may point this out, but only the Patent Office has the credibility, the moral authority and -- most importantly -- the responsibility to teach the Justices that enablement is the mechanism in the statute that invalidates claims that cover more than the applicant teaches.


The best you can hope for in Bilski v. Kappos is affirmance of the Federal Circuit decision. But that decision saddles you with a continued burden on your entire examining corps to make 101 rejections. It also repeats the "threshold inquiry" misunderstanding (see below). In re Bilski at 950.

Your risks are even greater if the decision below is not affirmed. The Supreme Court could adopt something like Judge Mayer's dissent, overruling State Street  (n.16) and AT&T (n.17). Or it could follow the concurrence of Judge Dyk joined by Judge Linn, who argue that the Founders used the term "useful Arts" with the intention of discriminating among inventors to deny patents to those whose inventions "organize human activity." Or the Supreme Court could formulate a different test, one that would affect even more applications, would be even harder to understand and apply, and would force your examining corps to spend even more time on 101 and even less time on substance.


As respondent, your position is not ideal. In the 101 cases of the past, Benson (n.18), Flook (n.15) and Diehr (n.19) regarding computer technology, and Chakrabarty (n.20) regarding biotechnology, the Patent Office was the petitioner.  Misguided as your predecessors may have been in wanting to use 101 to hold back progress, at least they went to the Court on 101 as petitioners. They therefore framed the question presented and had a better chance to control the debate.


Granted, you do not have any control over accused infringers raising 101 and appealing adverse decisions. You do, however, have the power sua sponte to find prior art that invalidates those patents, and can put them into reexamination. Or you can appear as an amicus if you think that this is the one in a zillion patents whose claims fully comply with the requirements of 102, 103 and 112 and yet ought to be ruled unpatentable.

I am optimistic, though, that infringement defendants may rely less on 101 once the Patent Office announces its policy that PRIOR ART comes first. 101 has always had the whiff of the last refuge of scoundrels. (Or maybe it is the opening bid of someone trying to avoid the hard stuff. Accused infringer Excel, in the AT&T v. Excel litigation lost under 101, but went on to invalidate AT&T's patent for obviousness (n.21). With hindsight, the parties, as well as the courts and the Patent Office, would have been better off if Excel had pursued the 103 defense first.)


Someone out there may say, "Wait. 101 is the 'threshold inquiry' according to Flook and Federal Circuit precedent. The Patent Office should reject claims under 101 before it begins to look at prior art or enablement." And they would probably quote from In re Comiskey (n.22):
As the Supreme Court stated in Parker v. Flook,
"[t]he _obligation_ to determine what type of discovery is sought to be patented [so as to determine whether it is "the kind of 'discoveries' that the statute was enacted to protect"] _must precede_ the determination of whether that discovery is, in fact, new or obvious." 437 U.S. 584, 593, 98 S. Ct. 2522, 57 L. Ed. 2d 451 (1978) (emphases added).
554 F.3d at 973.

There are many things wrong-headed about the Flook quote, but the good news is that you do not have to take it as law. It is not. First, the court in Flook cited no authority whatsoever for this statement. Second, the Court did not have to opine on the correct order of examination: nobody had challenged the rule that examiners must state all grounds for rejection at once ("compact prosecution, see discussed in text accompanying n.9). And remember, the petitioner was the Patent Office. Third, only the 101 rejection was in the record.  Fourth, the Justices were ignorant of any other prosecution events, and specifically stated that
"For the purpose of our analysis, we assume that respondent's formula is novel and useful and that he discovered it."
Flook, n.15 above, at 588 (boldface mine). Thus the statement that a determination of patentable subject matter "must precede" examination comparing the claims to the prior art was both unsupported and dicta (n.23).

The fact that 101 is a smaller number than 102, 103 and 112 does not mean that Congress intended its requirements to be considered first. Nor can it justify consideration of PSM to the exclusion of the other "conditions and requirements of this title" which 101 expressly invokes. Fortunately, neither the Supreme Court nor the Federal Circuit has relied on numerology yet.


Using 101 so as not to have to issue patents, and to discourage people from applying for patents, will not improve patent quality. A patent office that issues no patents does not have good quality. It has no quality. Only by examining patents carefully and completely to make sure the requirements of 102, 103 and 112 are met can the Patent Office ensure good quality. Better searching of the prior art is the key to quality, as you have said, and protecting your examiners from the distraction of needless consideration of "patentable subject matter" is one sure way to improve searching.


The "patentable subject matter" inquiry always reminds me of the question that concerned philosophers of the Middle Ages: How many angels can dance on the head of a pin? (The late Columbia University physics professor Gerald Feinberg had a brilliant answer to this question (n.24), although not one that illuminates 101.)

Any practical person would answer, "Well, let's get an angel or two, place them on the head of a pin, invite them to dance, and see if they fit. If they do, we can add more angels." What practical people would never do is engage in a debate about floor space for angelic ballets until they had observed at least one dancing angel.

So, too, with 101. Until I see an otherwise allowable claim -- that is, a nonobvious, fully enabled claim -- that recites only a "law of nature, natural phenomena or abstract idea," I will be skeptical that any exists. (Bilski's claims apparently have never been subjected to examination for validity over the prior art. The claims in Comiskey (n.22) were rejected under 103 and the Board of Patent Appeals affirmed that rejection, yet the Federal Circuit refused to review the 103 decision because it was so eager to consider 101.) I suspect that a claim that is unpatentable ONLY because of 101 is today's equivalent of angels dancing on the head of a pin: it is not a problem real people in the real world ever encounter.

Please, Mr. Kappos, let your examining corps, in the limited time they are given to examine an application, do what they are supposed to do, what their training is supposed to make them qualified to do, and what the public relies on them to do: examine the claims to see if they are allowable over the prior art and adequately supported by the specification. Hire some philosophers to consider whether otherwise allowable claims are so broad as to claim - only - a "law of nature, natural phenomena, [or] abstract idea." Better patent quality may yet be achievable.


n1. Bilski v. Kappos, No. 08-964, Supreme Court of the United States, oral argument scheduled for November 9, 2009.

n.2 Morris, Roberta J., Brief of Amicus Curiae in In re Bilski, 2007 US Fed Cir Briefs 1130 (2008 WL 1842256, 2008 U.S. Fed. Cir. Briefs LEXIS 27) examiner qualifications: quoting from "Patent Examiner Positions," Part 3. Qualification Requirements, available at http://www.uspto.gov/web/offices/pac/exam.htm (visited April 3, 2008), at *6-7 and *25-27.

n.3 United States Patent and Trademark Office Performance and Accountability Report, Fiscal Year
2008, available at http://www.uspto.gov/about/stratplan/ar/2008/2008annualreport.pdf

n.4 Kappos Speech: Delivered at the IPO annual conference on Sept. 14, 2009. Twain quote, and Twain's experience as a venture capitalist, discussed at http://myunpublishedworks.blogspot.com/2009/09/more-from-mark-twain-about-patents-and.html

n.5 See current Manual of Patenting Procedure, 8th ed rev 7 (July 2008), e.g., sections 706, 804, 806, 809, and 821.04.

n.6 Fraud Squad: Proposed changes to Rule 56 were set forth in 47 FR 21746 (1982); the proposed changes were subsequently abandoned, see PTO Notice Regarding Implementation of 37 C.F.R. Sec. 221.56, 1095 Off. Gaz. Pat. Off. 16 (Sept. 8, 1988). See also Manbeck, Harry, "Evolution and Future of New Rule 56 and the Duty of Candor: The Evolution and Issue of New Rule 56," 20 AIPLA Q.J. 136 (1992), text accompanying n8.

n.7 Aro Mfg. v. Convertible Top Replacement Co., 365 U.S. 336, 339 (1961)

n.8 Johnson & Johnston Assocs. v. R.E. Serv. Co., 285 F.3d 1046, 1052 (Fed. Cir. 2002)(en banc)

n.9 Manual of Patent Examining Procedure, 8th ed. rev. 7 (July 2008) Sec. 2106

n.10 In re Bilski (n.11 below), 545 F.3d 943, 996-7 (Fed. Cir. 2008) (en banc) (Newman, J. dissenting)

n.11 In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc)

n.12 Morris, Roberta J., Brief of Amicus Curiae in In re Bilski, 2007 US Fed Cir Briefs 1130 (2008 WL 1842256, 2008 U.S. Fed. Cir. Briefs LEXIS 27), discussing MPEP 2106 (n.9 above), at *7

n.13 Bilski v. Kappos, Brief for the Respondent, 2008 U.S. Briefs 964

n.14 O'Reilly v. Morse, 56 U.S. 62 (1853)

n.15 Parker v. Flook, 437 U.S. 584 (1978)

n.16 State St. Bank & Trust Co. v. Signature Fin. Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998)

n.17 AT&T Corp. v. Excel Communications, Inc. , 172 F.3d 1352 (Fed. Cir. 1999), cert. denied, 528 U.S. 946 (1999)

n.18 Gottschalk v. Benson, 409 U.S. 63 (1972)

n.19 Diamond v. Diehr, 450 U.S. 175 (1981)

n.20 Diamond v. Chakrabarty, 444 U.S. 1028 (1980)

n.21 AT&T Corp. v. Excel Communications, Inc. , 52 USPQ2d 1865 (D.Del. 1999) (103 decision)

n.22 In re Comiskey, 499 F.3d 1365, 1371 (Fed. Cir. 2007), vacated and on rehearing adhered to and amended, 554 F.3d 967, 973 (2009)

n.23 The flook in Flook: The observation that this sentence in Flook (full citation at n.15 above),
The obligation to determine what type of discovery is sought to be patented must precede the determination of whether that discovery is, in fact, new or obvious.
is unsupported dicta may have escaped the attention of courts, attorneys and scholars. (An AIPLA brief from a 1979 case called Diamond v. Franklin avoids the issue by following the quote with the statement that "It is not with this premise with which we take issue.") But you can read Flook yourself, and so can your solicitors. You won't find the sentence followed by a citation to any case or statute. You won't find any justification for performing a 101 analysis on claims that are not yet in condition for allowance. You won't find any acknowledgment that applicants faced with rejections under 102, 103 and 112 will often narrow their claims or abandon them. And you won't find that the controversy before the Court required it to make any determination about the chronology or prioritization of Patent Office examination. What you will find, though, is that ever since Flook, people repeat the sentence -- with the added characterication that "what type of discovery is sought to be patented, i.e. PSM, is a "threshold inquiry" -- as if it made total sense. It might make total sense, I suppose, to someone with limited exposure to patent practice, only the foggiest idea of what the words anticipation, obviousness and enablement mean, and only superficial knowledge of what the Patent Office does. To someone of your breadth and depth of patent law experience, Mr. Kappos, the best that can be said for the sentence is that it makes sense only if it does not mean what it seems to say.

n.24 Prof. Feinberg and the Dancing Angels:  The day I was to take my physics qualifying exam at Columbia, I ran into Prof. Gerald Feinberg (now deceased). He asked if I was ready for the test, and I replied that I was even ready to answer how many angels could dance on the head of a pin. Without missing a beat, Prof. Feinberg said, "That's easy. It just depends if they are fermions or bosons."


twr57 said...

Masterly - totally convincing. How sad that no notice will be taken of it...

Anonymous said...

Agreed, I doubt anyone with authority will even see the arguments, let alone act on them.

Rebecca, please check your spelling - your alma mater, Michigan, is mispelled in your bio. This sticks out to me like the proverbial sore thumb!

Anonymous said...

Agreed, I doubt anyone with authority will even see the arguments, let alone act on them.

Rebecca, please check your spelling - your alma mater, Michigan, is mispelled in your bio. This sticks out to me like the proverbial sore thumb!

RJM said...

Thanks! I've fixed Michigan, but left my name as Roberta...