Trademark licensing agreements are not distinguishable from other types of contracts – the contracting parties are generally held to the terms for which they bargained
WHDA Blogging Team | March 23, 2021
Authentic Apparel Group, LLC, et al. v. United States
March 4, 2021
Lourie, Dyk, Stoll (opinion by Lourie)
Summary
The Court of Appeals for the Federal Circuit (“the CAFC”) upheld the grant of summary judgement by United States Court of Federal Claims (“the Claims Court”), finding the plaintiff’s arguments unpersuasive. The CAFC found trademark licensing agreement to not be any different from other types of contracts, and there was no legal or factual reason to deviate from a plain reading of the exculpatory clauses in the trademark license agreement between the plaintiff and the defendant.
Details
Department of the Army (“Army”) and Authentic Apparel Group, LLC (“Authentic”) entered into a nonexclusive license for Authentic to manufacture and sell clothing bearing the Army’s trademarks in exchange for royalties. The license agreement stated that prior to any sale or distribution, Authentic must submit to the Army all products and marketing materials bearing the Army’s trademark for the Army’s written approval. The license also included exculpatory clauses that exempted the Army from liability for exercising its discretion to deny approval.
Between 2011 and 2014, Authentic submitted nearly 500 requests for approval to the Army, of which 41 were denied. During this time period, several formal notices were sent to Authentic, stating Authentic’s failures to timely submit royalty reports and pay royalties. Authentic eventually paid royalties through 2013, but on November 24, 2014, but expressed its intention of not paying outstanding royalties for 2014, and that it would sue the government for damages.
On January 6, 2015, Authentic and Ruben filed a complaint in the Claims Court for breach of contract. The allegations of breach were based on “the Army’s denial of the right to exploit the goodwill associated with the Army’s trademarks, refusal to permit Authentic to advertise its contribution to certain Army recreation programs, delay of approval for a financing agreement for a footwear line, and denial of approval for advertising featuring the actor Dwayne ‘The Rock’ Johnson.” The Claims Court dismissed Ruben as a plaintiff for lack of standing. Authentic subsequently amended its complaint to include an allegation that “the Army breached the implied duty of good faith and fair dealings by not approving the sale of certain garments.”
One November 27, 2019, the Claims Court granted the government’s motion for summary judgment, determining that Authentic could not recover damages based on the Army’s exercise of discretion in view of the express exculpatory clauses included in the license agreement. With regard to Authentic’s amended complaint, the Claims Court also found that the Army’s conduct was not unreasonable, and in line with its obligation under the agreement.
The plaintiffs appealed, challenging dismissal of Ruben as a plaintiff, and the Claims Court’s grant of summary judgment.
With regard to the dismissal of Ruben as a plaintiff, the CAFC ruled that the Claims Court properly dismissed Ruben for lack of standing, as he was not a party to the license agreement, and there is no indication of Ruben as an intended beneficiary of the agreement.
The CAFC then turned to the Claims Court’s grant of summary judgment. The CAFC stated that the license agreement expressly stated that the Army had “sole and absolute discretion” regarding approval of Authentic’s proposed products and marketing materials.
Authentic argued that even if the Army has broad approval discretion under the agreement, that discretion cannot be so broad as to allow the Army to refuse to permit the use of its trademarks “for trademark purposes.” However, the CAFC ruled that the Army’s conduct was not at odd with principles of trademark law. Authentic’s argument appeared to distinguish trademark licenses from other types of contracts, but the CAFC stated that underlying subject matter of the contract is not an issue, and contracting parties are “generally held to the terms of which they bargained.”
The CAFC found Authentic’s argument to be problematic also in that it relies on an outdated model of trademark licensing law, where, at one point, “a trademark’s sole purpose was to identify for consumers the products’ physical source of origin,” and therefore, trademark licensing was “philosophically impossible.” Under the current law, trademark licenses are allowed as long as the trademark owner exercises quality control over the products associated with its trademarks. Here, Army fulfilled its duty of quality control with an approval process.
The CAFC considered Authentic’s arguments and found them unpersuasive, thus affirming the Claims Court’s grant of summary judgment in favor of the government.
Takeaway
- Review carefully the terms of any licensing agreement and negotiate for terms prior to signing. Trademark license agreements are not any different from other types of contracts, and the parties are generally held to the terms of the contracts.
Quality and Quantity of Specification Support in Determining Patent Eligibility
John Kong | March 19, 2021
Simio, LLC v Flexsim Software Products, Inc.
December 29, 2020
Prost, Clevenger, and Stoll
Summary:
In upholding a district court’s finding of patent ineligibility for a computer-based system for object-oriented simulation, the Federal Circuit uses a new “quality and quantity” assessment of the specification’s description of an asserted claim limitation that supposedly supports the claim being directed to an improvement in computer functionality (and not an abstract idea). Here, numerous portions of the specification emphasized an improvement for a user to build object-oriented models for simulation using graphics, without the need to do any programming. This supported the court’s finding that the character of the claim as a whole is directed to an abstract idea – of using graphics instead of programming to create object-oriented simulation models. In contrast to the numerous specification descriptions supporting the abstract idea focus of the patent, one claimed feature that Simio asserted as reflecting an improvement in computer functionality was merely described in just one instance in the specification. This “disparity in both quality and quantity” between the specification support of the abstract idea versus the specification support for the asserted claim feature does not change the claim as a whole as being directed to the abstract idea.
Procedural History:
Simio, LLC sued FlexSim Software Products, Inc. for infringing U.S. Patent No. 8,156,468 (the ‘468 patent). FlexSim moved for judgment on the pleadings under Rule 12(b)(6) for failing to state a claim upon which relief could be granted because the claims of the ‘468 patent are patent ineligible under 35 USC § 101. The district court granted that motion and dismissed the case. The Federal Circuit affirmed.
Background:
Representative claim 1 of the ‘417 patent follows:
A computer-based system for developing simulation models on a physical computing device, the system comprising:
one or more graphical processes;
one or more base objects created from the one or more graphical processes,
wherein a new object is created from a base object of the one or more base objects by a user by assigning the one or more graphical processes to the base object of the one or more base objects;
wherein the new object is implemented in a 3-tier structure comprising:
an object definition, wherein the object definition includes a behavior,
one or more object instances related to the object definition, and
one or more object realizations related to the one or more object instances;
wherein the behavior of the object definition is shared by the one or more object instances and the one or more object realizations; and
an executable process to add a new behavior directly to an object instance of the one or more object instances without changing the object definition and the added new behavior is executed only for that one instance of the object.
Computer-based simulations can be event-oriented, process-oriented, or object-oriented. Earlier object-oriented simulation platforms used programming-based tools that were “largely shunned by practitioners as too complex” according to the ‘468 patent. Use of graphics emerged in the 1980s and 1990s to simplify building simulations, via the advent of Microsoft Windows, better GUIs, and new graphically based tools. Along this graphics trend, the ‘468 patent focuses on making object-oriented simulation easier for users to build simulations using graphics, without any need to write programming code to create new objects.
Decision:
Under Alice step one’s “directed to” inquiry, the court asks “what the patent asserts to be the focus of the claimed advance over the prior art.” To answer this question, the court focuses on the claim language itself, read in light of the specification.
Here, the preamble relates the claim to “developing simulation models,” and the body of the claim recites “one or more graphical processes,” “one or more base objects created from the one or more graphical processes,” and “wherein a new object is created from a base object … by assigning the one or more graphical processes to the base object…” There is also the last limitation (the “executable-process limitation”). Although other limitations exist, Simio did not rely on them for its eligibility arguments.
The court considered these limitations in view of the specification. The ‘468 patent acknowledged that using graphical processes to simplify simulation building has been done since the 1980s and 1990s. And, the ‘468 patent specification states:
“Objects are built using the concepts of object-orientation. Unlike other object-oriented simulation systems, however, the process of building an object in the present invention is simple and completely graphical. There is no need to write programming code to create new objects.” ‘468 patent, column 8, lines 22-26 (8:22-26).
“Unlike existing object-oriented tools that require programming to implement new objects, Simio™ objects can be created with simple graphical process flows that require no programming.” 4:39-42.
“By making object building a much simpler task that can be done by non-programmers, this invention can bring an improved object-oriented modeling approach to a much broader cross-section of users.” 4:47-50.
“The present invention is designed to make it easy for beginning modelers to build their own intelligent objects … Unlike existing object-based tools, no programming is required to add new objects.” 6:50-53.
“In the present invention, a graphical modeling framework is used to support the construction of simulation models designed around basic object-oriented principles.” 8:60-62.
“In the present invention, this logic is defined graphically … In other tools, this logic is written in programming languages such as C++ or Java.” 9:67-10:3.
Taking the claim limitations, read in light of the specification, the court concludes that the key advance is simply using graphics instead of programming to create object-oriented simulations. “Simply applying the already-widespread practice of using graphics instead of programming to the environment of object-oriented simulations is no more than an abstract idea.” “And where, as here, ‘the abstract idea tracks the claim language and accurately captures what the patent asserts to be the focus of the claimed advance …, characterizing the claim as being directed to an abstract idea is appropriate.’”
Simio argued that claim 1 “improves on the functionality of prior simulation systems through the use of graphical or process modeling flowcharts with no programming code requited.” However, an improvement emphasizing “no programming code required” is an improvement for a user – not an improvement in computer functionality. An improvement in a user’s experience (not having to write programming code) while using a computer application does not transform the claims to be directed to an improvement in computer functionality.
Simio also argued that claim 1 improves a computer’s functionality “by employing a new way of customized simulation modeling with improved processing speed.” However, improved speed or efficiency here is not that of the computer, but rather that of the user’s ability to build or process simulation models faster using graphics instead of programming. In other words, the improved speed or efficiency is not that of computer functionality, but rather, a result of performing the abstract idea with well-known structure (a computer) by a user.
Simio finally argued that the last limitation, the executable-process limitation reflects an improvement to computer functionality. It is with regard to this last argument that the court introduces a new “quality and quantity” assessment of the specification. In particular, the court noted that “this limitation does not, by itself, change the claim’s ‘character as a whole’ from one directed to an abstract idea to one that’s not.” As support of this assessment of the claim’s “character as a whole,” the court cited to at least five instances of the specification emphasizing graphical simulation modeling making model building easier without any programming, in contrast to a single instance of the specification describing the executable process limitation:
Compare, e.g., ’468 patent col. 4 ll. 29–42 (noting that “the present invention makes model building dramatically easier,” as “Simio™ objects” can be created with graphics, requiring no programming), and id. at col. 4 ll. 47–50 (describing “this invention” as one that makes object-building simpler, in that it “can be done by non-programmers”), and id. at col. 6 ll. 50–53 (describing “[t]he present invention” as one requiring no programming to build objects), and id. at col. 8 ll. 23–26 (“Unlike other object-oriented simulation systems, however, the process of building an object in the present invention is simple and completely graphical. There is no need to write programming code to create new objects.”), and id. at col. 8 ll. 60–62 (“In the present invention, a graphical modeling frame-work is used to support the construction of simulation models designed around basic object-oriented principles.”), with col. 15 l. 45–col. 16 l. 6 (describing the executable-process limitation). This disparity—in both quality and quantity—between how the specification treats the abstract idea and how it treats the executable-process limitation suggests that the former remains the claim’s focus.
Even Simio’s own characterization of the executable-process limitation closely aligns with the abstract idea: (a) that the limitation reflects that “a new behavior can be added to one instance of a simulated object without the need for programming” and (b) that the limitation reflects an “executable process that applies the graphical process to the object (i.e., by applying only to the object instance not to the object definition).” Although this is more specific than the general abstract idea of applying graphics to object-oriented simulation, this merely repeats the above-noted focus of the patent on applying graphical processes to objects and without the need for programming. As such, this executable-process limitation does not shift the claim’s focus away from the abstract idea.
At Alice step two, Simio argued that the executable-process limitation provides an inventive concept. However, during oral arguments, Simio conceded that the functionality reflected in the executable-process limitation was conventional or known in object-oriented programming. In particular, implementing the executable process’s functionality through programming was conventional or known. Doing so through graphics does not confer an inventive concept. What Simio relies on is just the abstract idea itself – use of graphics in object-oriented simulation. Reliance on the abstract idea itself cannot supply the inventive concept that renders the invention “significantly more” than that abstract idea.
Even if the use of graphics instead of programming to create object-oriented simulations is new, a claim directed to a new abstract idea is still an abstract idea – lacking any meaningful application of the abstract idea sufficient to constitute an inventive concept to save the claim’s eligibility.
Takeaways:
- This case serves a good reminder of the importance of proper specification drafting to address 101 issues such as these. An “improvement” that can be deemed an abstract idea (e.g., use graphics instead of programming) will not help with patent eligibility. The focus of an “improvement” to support patent eligibility must be technological (e.g., in order to use graphics instead of programming in object-oriented simulation modeling, this new xyz procedure/data structure/component replaces the programming interface previously required…). “Technological” is not to be confused with being “technical” – which could mean just disclosing more details, albeit abstract idea type of details that will not help with patent eligibility. Here, even a “new” abstract idea does not diminish the claim still being “directed to” that abstract idea, nor rise to the level of an inventive concept. Improving user experience is not technological. Improving a user’s speed and efficiency is not technological. Improving computer functionality by increasing its processing speed and efficiency could be sufficiently technological IF the specification explains HOW. Along the lines of Enfish, perhaps new data structures to handle a new interface between graphical input and object definitions may be a technological improvement, again, IF the specification explains HOW (and if that “HOW” is claimed). In my lectures, a Problem-Solution-Link methodology for specification drafting helps to survive patent eligibility. Please contact me if you have specification drafting questions.
- This case also serves as a good reminder to avoid absolute statements such as “the present invention is …” or “the invention is… .” There is caselaw using such statements to limit claim interpretation. Here, it was used to ascertain the focus of the claims for the “directed to” inquiry of Alice step one. The more preferrable approach is the use of more general statements, such as “at least one benefit/advantage/improvement of the new xyz feature is to replace the previous programming interface with a graphical interface to streamline user input into object definitions…”
- This decision’s “quality and quantity” assessment of the specification’s focus on the executable-process limitation provides a new lesson. Whatever is the claim limitation intended to “reflect” an improvement in technology, there should be sufficient specification support for that claim limitation – in quality and quantity – for achieving that technological improvement. Stated differently, the key features of the invention must not only be recited in the claim, but also, be described in the specification to achieve the technological improvement, with an explanation as to why and how.
- This is yet another unfortunate case putting the Federal Circuit’s imprimatur on the flawed standard to find the “the focus of the claimed advance over the prior art” in Alice step one, albeit not as unfortunate as Chamberlain v Techtronic (certiorari denied) or American Axle v Neapco (still pending certiorari). In another lecture, I explain why the “claimed advance” standard is problematic and why it contravenes Supreme Court precedent. Briefly, the claimed advance standard is like the “gist” or “heart” of the invention standard of old that was nixed. In Aro Mfg. Co. v. Convertible Top Replacement Co., the Supreme Court stated that “there is no legally recognizable or protected ‘essential’ element, ‘gist’ or ‘heart’ of the invention in a combination patent.” In §§102 and 103 issues, the Federal Circuit said distilling an invention down to its “gist” or “thrust” disregards the claim “as a whole” requirement. Likewise, stripping the claim of all its known features down to its “claimed advance over the prior art” is also contradictory to the same requirement to consider the claim as a whole under section 101. Moreover, the claimed advance standard contravenes the Supreme Court’s warnings in Diamond v Diehr that “[i]t is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. … [and] [t]he ‘novelty’ of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the 101 categories of possibly patentable subject matter.” Furthermore, the origins of the claimed advance standard have not been vetted. Originally, the focus was on finding a practical application of an abstract idea in the claim. This search for a practical application morphed, without proper legal support, into today’s claimed advance focus in Alice step one. Interestingly enough, since the 2019 PEG, the USPTO has not substantively revised its subject matter eligibility guidelines to incorporate any of the recent “claimed advance” Federal Circuit decisions.
Tags: 35 U.S.C. § 101 > abstract idea > patent eligibility > specification drafting
Make Sure Patent Claims Do Not Contain an Impossibility
Bo Xiao | March 12, 2021
Synchronoss Technologies, Inc., v. Dropbox, Inc.
February 12, 2021
PROST, REYNA and TARANTO
Summary
Synchronoss Technologies appealed the district court’s decisions that all asserted claims relating to synchronizing data across multiple devices are either invalid or not infringed. The Federal Circuit affirmed the district court’s judgments of invalidity under 35 U.S.C. § 112, paragraph 2, with respect to certain asserted claims due to indefiniteness. The Federal Circuit also found no error in the district court’s conclusion that Dropbox does not directly infringe by “using” the claimed system under § 271(a). Thus, the Federal Circuit affirmed on non-infringement.
Background
Synchronoss sued Dropbox for infringement of three patents, 6,757,696 (“’696 patent”), 7,587,446 (“’446 patent”), and U.S. Patent Nos. 6,671,757 (“’757 patent”), all drawn to technology for synchronizing data across multiple devices.
The ’446 patent discloses a “method for transferring media data to a network coupled apparatus.” The indefinite argument of Dropbox targets on the asserted claims that require “generating a [single] digital media file” that itself “comprises a directory of digital media files.” Synchronoss’s expert conceded that “a digital media file cannot contain a directory of digital media files.” But Synchronoss argued that a person of ordinary skill in the art “would have been reasonably certain that the asserted ’446 patent claims require a digital media that is a part of a directory because a file cannot contain a directory.” The district court rejected the argument as “an improper attempt to redraft the claims” and concluded that all asserted claims of the ’446 patent are indefinite.
The ’696 patent discloses a synchronization agent management server connected to a plurality of synchronization agents via the Internet. The asserted claims of the ‘696 patent all include the following six terms, “user identifier module,” “authentication module identifying a user coupled to the synchronization system,” “user authenticator module,” “user login authenticator,” “user data flow controller,” and “transaction identifier module.” The district court concluded that all claims in the ’696 patent are invalid as indefinite. The decision leaned on the technical expert’s testimony that all six terms are functional claim terms. The specification failed to describe any specific structure for carrying out the respective functions.
The asserted claim 1 of ‘757 patent recites “a system for synchronizing data between a first system and a second system, comprising …” The district court found that hardware-related terms appear in all asserted claims of ‘757 patent. The hardware-related terms include “system,” “device,” and “apparatus,” all that means the asserted claims could not cover software without hardware. Dropbox argued that it distributed the accused software with no hardware. The district court granted summary judgment of non-infringement in favor of Dropbox.
Discussion
i. The ‘446 Patent – Indefiniteness
The Federal Circuit noted that the claims were held indefinite in circumstances where the asserted claims of the ’446 patent are nonsensical and require an impossibility—that the digital media file contains a directory of digital media files. As a matter of law under § 112, paragraph 2, the claims are required to particularly point out and distinctly claim the invention. “The primary purpose of this requirement of definiteness of claim language is to ensure that the scope of the claims is clear so the public is informed of the boundaries of what constitutes infringement of the patent.” (MPEP 2173)
Synchronoss argued that a person of ordinary skill would read the specification to interpret the meaning of the media file. However, the Federal Circuit rejected the argument since Synchronoss’s proposal would require rewriting the claims and also stated that “it is not our function to rewrite claims to preserve their validity.”
ii. The ‘696 Patent – Indefiniteness
The ‘696 patent was focused on whether the claims at issue invoke § 112, paragraph 6. The Federal Circuit applied a two-step process for construing the term, 1. identify the claimed function; 2. determine whether sufficient structure is disclosed in the specification that corresponds to the claimed function.
However, the asserted claims were found not to detail what a user identifier module consists of or how it operates. The specification fails to disclose an “adequate” corresponding structure that a person of ordinary skill in the art would be able to recognize and associate with the corresponding function in the claim. The Federal Circuit held that the term “user identifier module” is indefinite and affirmed the district court’s decision that asserted claims are invalid.
iii. The ‘757 Patent – Infringement
The ‘757 patent is the only one focused on the infringement issue. Synchronoss argued that the asserted claims recite hardware not as a claim limitation but merely as a reference to the “location for the software.” However, the Federal Circuit affirmed the district court’s founding that the hardware term limited the asserted claims’ scope.
The Federal Circuit explained that “Supplying the software for the customer to use is not the same as using the system.” Dropbox only provides software to its customer but no corresponding hardware. Thus, the Federal Circuit affirmed the district court’s summary judgment of non-infringement.
Takeaway
- Make sure patent claims do not contain an impossibility
- Supplying software alone does not infringe claims directed to hardware.
- “Adequate” structures in the specification are required to support the functional terms in the claims.
Sorry Doc, no Patent Term Adjustment under the C-delay Provision!
Adele Critchley | March 1, 2021
Steven C. Chudik vs., Andrew Hirshfeld (performing the functions & duties of the under Secretary of Commerce for IP and Director of the US.PTO).
February 8, 2021
Bryson, Hughes, and Taranto (author).
Summary:
i. Background:
Dr. Chudik filed his patent application before the USPTO on September 29, 2006.
After the issuance of a second rejection in 2010 “Dr. Chudik took a step that would turn out to have consequences for the patent term adjustment awarded under 35 U.S.C. § 154(b)” by requesting continued examination rather than “immediately taking an appeal to the Patent Trial and Appeal Board.”
Then in 2014, the Examiner again rejected the claims and Dr. Chudik appealed to the Board. As a result, the Examiner reopened prosecution and issued a subsequent office action rejecting the claims as unpatentable on a different ground.
Two more times Dr. Chudik appealed and each time the Examiner reopened prosecution and issued a new rejection.
In December 2017, while a fourth notice of appeal was pending, the Examiner withdrew several rejections; and after some claim amendments, the Examiner issued a Notice of Allowance in 2018. The application issued as a patent on May 15, 2018, eleven and a half years (11.5 yrs) after the patent application was originally filed.
Dr Chudick was given a patent term adjustment of 2,066 days under 35 U.S.C. § 154(b). The PTO rejected Dr. Chudik’s argument that “he was entitled to an additional 655 days, under 35 U.S.C. § 154(b)(1)(C)(iii) (C-delay), for the time his four notice of appeals were pending.
ii. Issues:
Is Dr. Chuick entitled to patent term adjustment under 35 U.S.C. § 154(b)(1)(C)(iii) (C-delay) for the time his four notice of appeals were pending, even though each time prosecution was reopened, and the case never proceeded to the Board?
iii. Holding
No, the CAFC agreed with the United States District Court for the Eastern District of Virginia in affirming that Dr. Chudick was not entitled to the additional PTA under the C-delay provision. Chudik v. Iancu, No. 1:19-cv-01163 (E.D. Va. March 25, 2020), ECF No. 33.
The C-delay provision covers delays due to “appellate review by the Patent Trial and Appeal Board or by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability.” 35 U.S.C. § 154(b)(1)(C)(iii).
The District Court held and the CAFC affirmed that the provision does not apply here because the Examiner reopened prosecution after each Notice of Appeal and so (1) the Board did not review the patent at issue and thus “the Board’s jurisdiction over the appeal never attached,” and as a consequence “(2) there was no reversal of the rejection by the Board.”
Dr. Chudick “argued that [the] C-delay applies in situations of “appellate review,” which, he urged, refers to the entire process for review by the Board, beginning when a notice of appeal is filed.”
The District Court rejected this argument and the CAFC agreed holding that the statutory language for “appellate review” requires a “decision in the review reversing an adverse determination of patentability.” 35 U.S.C. § 154(b)(1)(C)(iii), and that language is both “reasonably” and “best interpreted” to require an actual “reversal decision made by the Board.” Consequently, the language excludes the “time spent on a path pursuing such a decision when, because of an examiner reopening of prosecution, no such decision is ever issued.”
The CAFC noted that “[W]hen adopting its 2012 regulations, the PTO explained that the limitations on C-delay adjustments… may be offset by an increased availability of B-delay adjustments.” However, for Dr. Chudik a B-delay increase fails to apply because rather than appealing his initial 2010 final rejection, a request for continued examination was filed and so the statutory exclusion was triggered. See 35 U.S.C. § 154(b)(1)(B)(i) (excluding “any time consumed by continued examination of the application requested by the applicant under [35 U.S.C. § 132(b)]”).
The CAFC concluded that “[T]he unavailability of B-delay for nearly two years (655 days) of delay in the PTO illustrates what applicants should understand when deciding whether to request a continued examination rather than take an immediate appeal. The potential benefit of immediate re-engagement with the examiner through such continued examination comes with a potential cost.”
Additional Note:
Congress set forth three broad categories of delay for which a patent may receive a patent term adjustment. See 35 U.S.C. § 154(b)(1)(A)–(C).
First, under § 154(b)(1)(A), a patent owner may seek an adjustment where the PTO fails to meet certain prescribed deadlines for its actions during prosecution.
Second, under § 154(b)(1)(B), adjustment is generally authorized for each day that the patent application’s pendency extends beyond three years (B-delay), subject to certain exclusions, such as for “time consumed by continued examination of the application requested by the applicant under section 132(b).”
Third, under § 154(b)(1)(C), a patent owner may seek an adjustment for “delays due to derivation proceedings, secrecy orders, and appeals,” including “appellate review by the [Board] . . . in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability” (C-delay).
Take-away:
- Where no new amendments and/or evidence is to be presented, carefully consider the balance between “[T]he potential benefit of immediate re-engagement with the examiner through such continued examination” and the “potential cost” thereof with respect to lost PTA under the B-delay exclusion.
- C-delay provision only applies when “the Board’s jurisdiction over the appeal” attaches and there is a reversal of the Examiner’s rejection.
