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Archive for February, 2012

Impact of the America Invents Act on the Life Sciences

Posted by admin On February 23, 2012

On Feb. 7, 2012, Alex Forman and Jana Harris, Ph.D.  discussed with members of the Indiana Biomedical Entrepreneur Network  key modifications to the current patent laws described in the America Invents Act (AIA) and the most recently proposed rules by the United States Patent and Trademark Office (USPTO).  This is of particular importance to scientists, doctors, and entrepreneurs because the AIA is changing the approach needed to obtain patent protection for inventions.  Currently the United States Patent and Trademark Office is developing and proposing to the public the rules implementing the provisions of the AIA.  The new rules will affect important aspects of applying for patent protection including most significantly changing the U.S. patent system to a first-inventor-to-file system, which entitles the inventor who files first to a patent regardless of whether someone else invented it first.  This change will be significant for timing disclosures by an inventor because disclosure can prevent another from obtaining a patent and grant the inventor a year grace period to file a patent application.  Moreover, several post-grant review procedures will be available that will allow for third parties to challenge the validity of granted patents.  In addition to discussing the main provisions of the act, the presentation examined the AIA from a life science perspective to provide insight and strategies when seeking patent protection.  Overall, the presentation highlighted how the AIA will affect the life sciences, which will be crucial for future innovation and technology.  

To read through the complete presentation click here.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.

The America Invents Act grants the U.S. Patent and Trademark Office (USPTO)  the authority to set or adjust any fee for the next seven years within certain limits. With the tasks of setting up new branch offices, hiring new examiners to reduce the backlog, and implementing a variety of new processes established by the America Invents Act, the question is not whether the USPTO will raise fees but rather, how much will the USPTO raise fees.

People may be scratching their heads and asking, “Didn’t the patent office already increase fees by 15 percent in October 2011?”  Yes it did, and while the USPTO indicates that it could just keep the fees at the current 15 percent surcharge level, it believes that further increases are necessary.  The USPTO argues that if fees stayed the same, by 2018 the backlog of patents would be greater than it is today, application pendency would lengthen, the USPTO’s financial stability would be at risk, and it would not be able to keep pace with the anticipated rise in patent filings. The USPTO asserts that increased fees will be necessary to meet two main goals: 1) to operate with a more sustainable funding model than it has in the past to avoid disruptions in agency operations caused by fluctuations in the economy; and 2) to reduce the backlog of unexamined patent applications. 

With those goals in mind, on Feb. 7, 2012, the USPTO released its first patent fee proposal for public inspection. The USPTO predicts that in 2013 its operational and administrative costs will total $2.549 billion, and under the proposed fee schedule the USPTO anticipates collecting $2.686 billion with the extra $137 million (plus $19 million from other revenue) to be deposited into the USPTO’s piggy bank for safe keeping.

Despite this increase in income, the USPTO alleges that the fee structure will result in a lower cost of entry into the patent system.  One might wonder how the USPTO could allege that increased fees will result in “lower cost of entry.” The USPTO notes that while there is a 47 percent increase in the initial filing fees (i.e., the basic filing, search, and examination fee) for a utility patent application,  the proposed pre-grant publication and issue fee due at the time of the patent issuing actually results in a decrease in the total fees for obtaining a patent (i.e., from $3,290 to $2,800 for a large entity).  While its true that the governmental fees to obtain the patent in totality are decreasing, the assertion of a lower cost of entry is misleading because the USPTO has made applicants pay more at the start of the process, which may have the opposite effect of a lower cost of entry by causing some smaller businesses to choose not to file at all due to the increase in initial filing fees.

Moreover, this so called lower cost of entry does not take into consideration the fact that the costs for extensions of time, excess claims, notices of appeal, and Requests for Continued Examinations (RCEs) are also increased.  For instance, the fees for an extension of time within the first month would increase 33 percent, claims in excess of 20 would increase 67 percent, independent claims in excess of three would increase 84%, a notice of appeal would increase 142 percent, and RCEs increase 83 percent.  While extensions of times and excess claim charges can usually be avoided, the reality is that many applications do not proceed from filing to issuance without the need for the applicant to either file an RCE or appeal an examiner’s decision related to patentablity to obtain the scope of protection it is entitled to. As such, the decrease in cost the USPTO touts is likely not going to be realized for many applicants. Rather, the reality is that the USPTO is increasing such costs to discourage certain behaviors in an effort to reduce the back log of applications and expedite examination.

This is not the first time the USPTO has taken this route relative to extension of times, excess number of claims, and RCEs. Some may recall that a few years ago the USPTO tried to implement rules that had the same effect of decreasing the number of RCEs, dissuading those that wanted to file for claims over the minimum, and limiting the number of continuation applications allowed. While those rules ended up not going into effect, it is not surprising that some of those same concepts are now carried over in the current USPTO fee proposal.

The USPTO acknowledged as much by explaining that the increase in fees for extensions of time are to discourage applicants from taking more time, thereby improving application processing.  The increase in fees for extra claims are to allow Examiners to examine a more succinct application faster.  The increase in RCEs, Notice of Appeals, and Maintenance fees are to recoup costs and to help reduce the backlog of patent applications. 

In its analysis of the fees, the USPTO does not explain how the fee proposals for the post issuance review procedures implemented under the Act achieve the USPTO’s overriding goals.  After the patent is granted, the Act and existing law provides for the following review procedures: supplemental examination, ex parte reexamination, inter partes review, and post-grant review.  The new review procedures were implemented with the intention of decreasing patent litigation. 

Despite this intent, the fees for all the post-issuance reviews could potentially deter applicants from pursing any of these procedures.  Under the new Act, inter partes review replaces inter partes reexamination and the fee is increased from $8,800 to $27,200 for 20 or fewer claims.  The cost of an ex parte reexamination used to be $2,520, but under the new system the fee is increased to $17,760 (a 605 percent increase).  The new post grant review for 20 or fewer claims is $35,800 and can be as much as $125,300 for up to 70 claims.  The proposal does briefly mention that the high cost of supplemental examination ($27,000) was set to encourage applicants to provide all relevant information during the initial examination.  However, other than that, the USPTO does not offer much discussion as to how these fees were factored into the  costs for applicants or achieving the USPTO’s goals.

While the issue of whether the higher proposed fees accomplish the benefits outlined by the USPTO is subject to debate, it is clear that the fees will substantially increase if the USPTO follows through with its proposal.  The USPTO plans for this new fee schedule to go into effect in February 2013. The USPTO is currently seeking feedback from the public on its fee proposal and has hearings scheduled for February 15 and February 23.  We will provide further information and updates regarding the hearings on The Ice Loop and the Ice Miller Web site.

For those interested, the full table of proposed fees can be found at the following link:

http://www.uspto.gov/aia_implementation/fee_setting_-_ppac_hearing_attachment_1-table_of_patent_fee_changes_7feb12.pdf

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.

2012: The Year of Privacy

Posted by Nick Merker On February 13, 2012

Representative Lamar Smith (R-TX) introduced the Stop Online Piracy Act (SOPA) into the U.S. House of Representatives on October 26, 2011. Following an Internet backlash spanning Google, Wikipedia, Reddit, and other major websites, the bill was shelved – presumably permanently.

Prior to SOPA, on May 25, 2011, Representative Smith introduced a bill into the House that may have consumer privacy concerns underlining its primary purpose. H.R. 1981, the Protecting Children from Internet Pornographers Act of 2011, was passed by a House Judiciary Committee late in 2011 and is now ready to be debated in Congress. On its face, the bill makes it a crime to conduct a financial transaction knowing that such transaction will facilitate access to, or the possession of, child pornography with punishments as high as 20 years in prison and associated fines. However, the bill is drawing attention and backlash based on how it seeks to enforce such new crime.

In short, if the bill becomes law, Internet Service Providers (ISPs) will be required to retain a log of dynamically assigned IP addresses and corresponding personal information of each subscriber, like name, address, and credit card information if used to pay for such service, for a period of one year. Today, 18 U.S.C. 2703 enables law enforcement to request that ISPs retain similar data for 90 days while such law enforcement obtains a warrant. The bill seeks to expand this section by requiring ISPs to retain personal information under any circumstances for a period of one year.

One concern with this requirement is that it paints a broad brush by requiring ISPs to store data of all its users, when the purpose of the bill is to stop the facilitation of child pornography. Further, the bill creates a ripe target for malicious and/or accidental disclosure of personal information by requiring ISPs to store such information for long periods of time.

Additionally, the bill also grants subpoena authority to such newly stored information for the purpose of investigating unregistered sex offenders. This subpoena power is interesting given the recent concurrence by Justice Sotomayor in United States v. Davis, decided Jan. 23, 2012. There, Sotomayor questions the implications of standing privacy jurisprudence in the digital age:

“More fundamentally, it may be necessary to reconsider the premise that an individual has no reasonable expectation of privacy in information voluntarily disclosed to third parties. This approach is ill suited to the digital age, in which people reveal a great deal of information about themselves to third parties in the course of carrying out mundane tasks.  People disclose the phone numbers that they dial or text to their cellular providers; the URLs that they visit and the e-mail addresses with which they correspond to their Internet service providers; and the books, groceries, and medications they purchase to online retailers. . . . I for one doubt that people would accept without complaint the warrantless disclosure to the Government of a list of every Web site they had visited in the last week, or month, or year.”

Sotomayor’s concurrence combined with the sheer volume of bills introduced in Congress in the privacy realm show the importance of the privacy movement in the United States. Individuals and enterprises alike may wish to keep apprised of privacy concerns as new requirements are promulgated through legislation and/or court decisions. If you have any questions or comments about privacy legislation or privacy issues in the United States, please e-mail info@theiceloop.com.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.

In case anyone had any doubts about the prominent role that social media now occupies in today’s business climate, the publicity surrounding Facebook’s recent first steps to file an initial public offering should quiet the skeptics. In fact, when the news of Facebook’s planned IPO broke, the SEC Web site actually crashed under the increased traffic from visitors attempting to view Facebook’s initial SEC filing. (http://techcrunch.com/2012/02/01/facebook-ipo-crashes-sec-website/)  While the buzz may have died down a bit since the initial announcement (at least enough to let Internet users access the filings, located here), there is no question that Facebook is poised to make history as the highest-grossing Internet IPO, with an expected $5 billion in revenue to be raised. (http://www.mercurynews.com/business/ci_19873186). In total, the IPO values the company between $75 and $100 billion. Moreover, the filings revealed that Facebook now boasts approximately 845 million users, a figure that represents about half of all internet users worldwide. (http://www.mercurynews.com/business/ci_19873186).

Although this IPO is obviously big news for the social networking giant itself, the benefits of Facebook’s predicted influx of cash are expected to have positive results for smaller businesses worldwide as well. In his letter accompanying the SEC filings, Facebook founder Mark Zuckerberg highlighted not only Facebook’s adeptness at fostering communications between private individuals, but also the site’s importance in creating conversations about products and services. “As people share more,” Zuckerberg observed, “they have access to more opinions from the people they trust about the products and services they  use.”      (http://sec.gov/Archives/edgar/data/1326801/000119312512034517/d287954ds1.htm#toc287954_10). Developing its appeal to business owners appears to be a high priority for Facebook, as evidenced by the site’s promotional page outlining how businesses can use Facebook to promote their products and services. (http://www.facebook.com/business). This webpage includes a tutorial video outlining “how to grow your business with Facebook’s powerful marketing tools,” explanations of the site’s targeted ad system, and “sponsored stories” system, which enables businesses to pay for stories about them to be featured more prominently on users’ pages.

Patrick Salyer, an executive of a Palo Alto, Cali. firm that helps businesses utilize Facebook to maintain an online brand presence, predicts that Facebook’s IPO “will be ‘a wake-up call for businesses’ to step up spending on social media.” (http://www.mercurynews.com/business/ci_19881493?source=pkg). Facebook itself has been touting this marketing approach in the months leading up to its IPO. In an effort to encourage small business owners to utilize Facebook’s advertising services—a crucial part of its revenue strategy—Facebook COO Sheryl Sandberg announced Facebook’s plan in September 2011 to offer $50 of free advertising credits to up to 200,000 small businesses. (http://www.usatoday.com/tech/news/story/2011-09-16/facebook-small-business-sandberg/50419654/1). Sandberg observed that the credit would allow most small businesses to “target every single person they need to target at least once.” Id. While the cost-benefit ratio of such services may not be conclusively determined, a recent report estimates that social media sites “will help sell $30 billion worth of tangible goods by 2015.” (http://www.mercurynews.com/business/ci_19881493?source=pkg).

The Facebook IPO makes increasingly clear that social media is here to stay, and that businesses stand to benefit from a marketing strategy that acknowledges this valuable, targeted resource. You don’t have to be a Facebook employee or shareholder to profit from the prevalence of social media in the world today—and that’s something everyone should “like.”

For more information on how Ice Miller can help companies utilize social media to grow their business, contact info@theiceloop.com.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.

The Buzz on Google’s New Privacy Policy

Posted by aplavin On February 2, 2012

According to a blog post and e-mail sent to users last week, Google is “getting rid of over 60 different privacy policies” and replacing them with a single, shorter, and easier to read policy, effective March 1, 2012. 

The new policy allows sharing of a user’s information across various Google services.  Google’s blog post explains: “If you’re signed in, we may combine information you’ve provided from one service with information from other services.  In short, we’ll treat you as a single user across all our products, which will mean a simpler, more intuitive Google experience.” 

The change comes shortly after users voiced privacy concerns about Google’s new search feature, which mixes Google search results with personalized results from its Google Plus social network.  Critics have complained that this new feature violates the privacy of users who were unaware that their Google Plus posts would appear in search results. 

Since the new policy announcement, two members of the U.S. House of Representatives have written a letter asking the Federal Trade Commission to investigate whether the new policy violates a settlement reached by Google last year over its short-lived Buzz social networking site.  Complaining that under the new policy “consumers will have no choice but to either accept the new policy or stop using the company’s services,” Rep. Ed. Markey (D-Mass) and Rep. Joe Barton (R-Tex), expressed concern that the lack of an opt-out option raises important privacy concerns. 

The new terms and services are available at http://www.google.com/policies. For more information on drafting Internet privacy policies and/or protecting your privacy on the Internet, contact info@theiceloop.com.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.

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