Patent prosecution remains a key part of IP practices at law firms all over the globe but as rights holders place more emphasis on the quality of their grants, specialists need to ensure that they stay up to date with the latest developments. In a co-published editorial, IAM brings together experts from top firms around the world to offer invaluable insight into how prosecution is changing.
While IP owners remain keenly focused on developing their patent portfolios, they are placing increasing emphasis on the quality of their grants rather than the quantity. In addition, as new technologies emerge in areas such as AI and medical diagnostics, prosecution strategies must evolve to reflect client needs.
To assess how patent prosecution practices continue to respond to those changes in case law and local rules – as well as to innovation in areas such as data analytics IAM brought together experts from leading firms in the United States and Europe – Christian W Appelt and Markus Engelhard from Boehmert & Boehmert; Michael MacCallum and Marc Lorelli from Brooks Kushman; and Olga Dolgikh from Zuykov and Partners. Together they provided invaluable insight into how prosecution practices are changing in some of the largest IP markets in the world.
Q: Can you give us a sense of the size and scope of your prosecution practice and any sectors or industries where you focus in particular?
Christian Appelt (CA): Our firm’s practice is among the largest patent filing and prosecution practices in Germany. Taking 2018 as an example and looking at all technology fields together, we have filed a four-digit figure of patent applications at the EPO alone, either as first filings, Paris Convention applications or European patent-regional phases out of Patent Cooperation Treaty (PCT) applications. In recent years we have also seen a remarkable increase in filings at the German Patent and Trademark Office (GPTO), partly switching from European patent filings and partly in addition to these. We cover all aspects and fields of technology, with a traditionally strong focus on physics, electrical engineering, semiconductors and information and communication technology. We not only support the interests of large international corporations with headquarters out of Europe, but we also cultivate close bonds with European and German small and medium-sized enterprises (SMEs), for which we frequently act as an external patent department, covering freedom-to-operate analyses, patent drafting and prosecution, opposition and nullity proceedings, as well as litigation.
Q: How have you seen traditional approaches to patent prosecution evolve in recent years?
Marc Lorelli (ML): We have definitely seen things change but this varies by industry. Most of our clients are placing more emphasis on quality and preparing applications that can withstand post-grant scrutiny. Various sectors are consolidating at a fast pace due to acquisitions and this is prompting a shift in prosecution strategies. For example, the automotive industry is witnessing a massive transformation, with a lot more competitors in this space than there were 10 years ago. OEMs and suppliers have to be cognisant of the litigation approaches being taken by others.
OD: In recent years, there have been improvements in the issuance of patents in Russia. Thus, in 2018 more patents for inventions were granted than in the previous year; the same trend is apparent for the issuance of patents for utility models and industrial designs. The time limits for the prosecution of applications for inventions has been reduced compared with the previous year due to the possibility of filing an application and prosecution entirely in electronic form, which made it possible to reduce the amount of patent fees by 30%. Another innovation in examining applications for inventions and utility models is the use of AI in the patent search system. Since November 2018, it has become possible to conduct an automatic search for applications. This allows an expert to examine the application on the merits after it has passed through an automatic search, which saves time and increases the efficiency of the final result.
ME: To answer that question, I think one must distinguish between clients, especially with regard to size. German and European-based SME clients typically and traditionally would consider a national filing in Germany or a first European application and subsequently a further European application claiming priority of the first filing. If they also have an interest in overseas protection, they might consider filing a PCT application, leaving the ultimate decision of where to go out of this until shortly before the expiry of the 30-month deadline. This traditional approach is still being practised by many companies, especially start-ups and academic applicants, as it allows them to defer a considerable amount of costs to a later stage when it is clearer where protection will be needed and when more funds have hopefully been secured. However, with the advent of ever shorter product cycles, we have observed that larger clients do not necessarily consider the PCT route anymore but instead choose to go into a number of countries directly as Paris Convention filings. They may have to pay a certain amount of costs upfront because of translation requirements, but they may then defer further costs because of the possibility of delaying a request for examination. This is also reflected in the fact that some applicants do not appreciate the EPO’s “Early Certainty” initiative, and instead file in Germany or a number of other European countries directly where they may be able to postpone substantive examination until a later stage.
CA: As mentioned earlier, many companies, for example those from Japan, switch to German national filings instead of or in addition to European patent filings, due to the lower costs and greater flexibility with regards to timings already mentioned by Markus. Depending on the technology at issue, some companies even consider filing solely in Germany as being sufficient to protect their interests in Europe, especially in view of the fact that Germany is both central and a large market in Europe and also because most patent litigation cases are handled there.
Q: What have been the key recent developments in case law that have affected your firm’s approach to patent prosecution? For example, in areas such as patent-eligible subject matter.
OD: Until 1 October 2014, filing an application for an industrial design in Russia was quite difficult for applicants. It was necessary to draw up a list of essential features (by analogy with claims for an invention), as well as to provide a detailed image of the appearance of the product. Until recently, the list of essential features contained in the application played an important role in determining the scope of protection provided to the industrial sample, since the volume was determined by a set of essential features reflected on the product images and listed in the essential features of the industrial design, while the list of essential features could be corrected before issuing a patent. On 1 October 2014 the law was amended and this list of essential features was excluded from the elements of the patent application, which logically led to an increase in the scope of protection provided by the patent. Now the law states that an industrial design is considered to be used in a product if the product contains all the essential features of the industrial design displayed on the product images shown in the patent or else a combination of features that gives the informed consumer the same general impression as the patented industrial design.
ML: One area that has been transformed by recent developments is patent eligibility. Our firm was at the forefront of case law involving eligibility and when claims are not abstract, which can be a difficult determination. For this reason, we developed rules on how to draft and prosecute cases, particularly in the software and business method areas. Our rules are based on an understanding of recent federal circuit case law and understanding how that law can help to ensure the validity of properly drafted patents. There is a line of Federal Circuit case law including Enfish v Microsoft (database tables), Visual Memory v NVIDIA (data storage), Core Wireless v LG Electronics (small screen navigation), Data Engine Techs v Google (navigating spreadsheets), Thales v United States (positioning of inertial sensors) and BASCOM v AT&T (remote content filtering) that we used in a Federal Circuit argument in Ancora v HTC to explain patentability and obtain a favourable patentability decision. The key takeaway was that no matter how insignificant or close to existing processes, it is crucial to include in a patent application an explanation of how a particular invention departs from conventional wisdom or general-purpose computers or operations. In some instances, it may take a problem/solution approach. Disclosure with these types of explanation will survive challenges. The foundation for our rules were also significant to the USPTO and their development of subject-matter eligibility guidelines that focus on practical applications outlined above. While these guidelines are important and help with obtaining allowance from the USPTO, we also focus on Federal Circuit precedent as the best patents are expected not only to be allowed by the USPTO but also successfully enforced in the industry through the federal courts.
ME: In the pharma and biotech field, the Supreme Court’s decisions in Association for Molecular Pathology v Myriad Genetics and Mayo Collaborative Services v Prometheus Labs have had and continue to have a major impact on the patenting of inventions relating to or based on genetic material in the United States. From our point of view, the most unfortunate consequences of these decisions – especially for applicants in the diagnostic field – cannot be overestimated in that they have made the prosecution and allowance of diagnostic claims in the United States extremely difficult. For example, an invention based on the finding that a particular naturally occurring biomarker is elevated in certain diseases always runs the risk of being found patent-ineligible subject matter under Section 101 for allegedly being directed at a law of nature or natural phenomenon. While Myriad does not rule out patenting inventions where the biological material has somehow been altered in comparison to its naturally occurring counterpart and while the Court of Appeals for the Federal Circuit in subsequent decisions has tried to further specify the boundaries along which biological material should be altered in order not to fall under Section 101, the situation is still evolving. As a consequence, many applicants in the diagnostic field are now filing repeated continuation and divisional applications in the United States trying to keep an application pending so as to be able to take advantage of further developments that might somehow improve the overall situation – this is where they have not given up on protection for their diagnostic inventions in the United States altogether.
Fortunately for applicants in Europe, we do not experience similar developments, neither nationally nor at the EPO where the patenting of biological inventions is still possible, even if they are based on naturally occurring biomolecules.
CA: The situation with respect to the protection of computer-implemented inventions at the EPO and in Germany has been pretty stable in recent years, and although it could be more liberal, it is at least predictable, which is important for companies when it comes to planning and making decisions with respect to filings and prosecution in Europe and Germany. Of course we are now looking at the developments of the new referral to the Enlarged Board of Appeal (G1/19), about the patentability of computer-implemented simulations. In addition, developments in AI will lead to interesting challenges in the future to which we are all eagerly looking forward and not only with respect to patentability issues.
Q: What have been the main recent changes at local and international patent offices, such as new examination guidelines, that have affected your prosecution strategies?
ME: At the EPO, the ‘Early Certainty’ initiative – according to which the office intends to issue search reports and conclude substantive examination of applications within shorter timeframes – has generally been greeted with some approval, as far as the reduction of the considerable backlog is concerned. However, at the same time some applicants do not unanimously appreciate and approve of this, as it effectively ties up resources and funds within a shorter timeframe and relatively early in the respective proceedings. For some companies, especially start-ups, this may cause problems; we are seeing a number of such companies going for national filings in individual countries instead, where there is the possibility of delaying substantive examination beyond the timeframe that would be available at the EPO.
As far as the USPTO is concerned, there was a change in the Manual of Patent Examining Procedure relatively recently and a 2019 “Revised Patent Subject Matter Eligibility Guidance” has been issued as an outflow of, among other things, the Myriad and Mayo decisions, shedding some light on the USPTO’s practice with regard to the patenting of inventions based on genetic material. However, in our view, this has not removed the overall uncertainty with respect to patent eligibility criteria in the United States.
MM: The Alice decision has dominated changes to the examination guidelines at the USPTO over the last few years and the courts have only created more uncertainty as to what inventions are eligible. However, earlier this year, the USPTO issued new guidelines for determining subject-matter eligibility that are consistent with Director Iancu’s views in favouring patent eligibility. The new guidelines require examiners to find claims eligible if they integrate any abstract ideas into a “practical application”. This certainly seems like a sharp swing of the pendulum back towards eligibility and is one factor from the guidelines that I cite often in successfully arguing patentability.
Across the pond, the EPO has continued to create an uphill battle for patentability. The recent guidelines, which were released less than a year ago, made it clear that many “computational models and algorithms… such as neural networks, genetic algorithms, support vector machine” are “per se of an abstract mathematical nature”. The United States provides a more favourable forum for these inventions and international patent holders in this space should choose their forum wisely.
OD: From 15 December 2018 changes have been made to the rules for the preparation and prosecution of applications for inventions in terms of chemical compositions. Namely, it is no longer permitted to use information directly related to the composition (eg, conditions and modes of use of this composition in any process or method), quantitative (measured or calculated) parameter characterising one or more properties of the composition, in cases where this parameter is a distinctive feature in the characteristic of the composition in the independent claim (eg, the parameters of the strength of lamination, the resistance to cracking at stress, pharmacokinetic profile), a technical result that manifests itself in the manufacture or use of the composition. When characterising a pharmaceutical composition, it is no longer permissible to use signs related to the method of treating or preventing a disease (eg, indicating the doses, conditions or modes of use of the composition or medicines obtained from it). Therefore, the requirements for receiving patents on the composition have tightened.
Q: In some sectors, such as high tech, more patent-owning companies are putting greater emphasis on the quality of the patents that they file rather than the quantity. Are you seeing that shift among your clients and, if so, how is it affecting your practice?
MM: The quality of patent applications and protected scope has always been a key priority for my clients. This has not changed. The quantity of patent applications has altered slightly for various reasons, but with a few outliers the number of patent applications filed remains a key priority for many clients. You can also see that reflected in the total number of patent applications filed across the country, with last year’s filing numbers being relatively steady from previous years. It remains a very competitive market. As the patent laws are starting to swing more in favour of patent owners, my clients have a new excitement for the value of their portfolio.
OD: The analysis of inventive and patent activities in industry is of great importance for assessing the innovative potential of any country. Nowadays different countries are increasingly quoted in the world not in terms of production, military or even political power, but in their ability to make scientific and technical progress and to invent and master the results of intellectual activity, which leads not to an increase in the number of patents but to improved quality. The newest technologies are the main factor of economic development, in connection with which economic competition is increasingly determined by scientific-technical competition; this in turn increases the prominence of intellectual property. Based on our practice, foreign companies are increasingly betting on the quality of patents – the same cannot be said of Russian applicants. Russian patent law is young and lags behind that of advanced foreign countries. In this connection, Russian applicants seek to obtain more patents, which in some cases are narrow. Our task as patent specialists is to make the resulting patent of the best quality possible.
CA: Of course in the high-tech area – notably in telecoms or those sectors that develop certain international standards – the quantity of applications and granted patents does play a certain role. However, quality – while it has never been unimportant – is becoming even more of a priority and not only in view of the development of SEPs. While SMEs, with a lower number of applications, were in my opinion always focusing on quality, we have clearly noticed this shift in focus onto quality with regard to large filers, for which it is more difficult to assess quality aspects, simply in view of the high number of applications. These developments have hardly affected our practice, as our focus was always on quality, as was that of the companies that we have the honour of representing before the EPO and the GPTO. However, it seems that this service is now valued even more than before.
Q: How are new data analytics tools in areas such as AI and machine learning changing prosecution?
OD: To facilitate the work of specialists in the field of intellectual property, newly developed technologies are being created with the support of AI. In the face of growing global demand for IP rights, AI tools make it possible to achieve higher quality while reducing administrative costs. For example, automated translation platforms have been created for patent specialists to improve the efficiency and accuracy of working with foreign databases with the possibility of forming a terminological database in order to constantly improve the quality of translated patent information. In addition, AI technologies have been used by the Russia Patent and Trademark Office for several years to examine inventions for compliance with legal requirements. Employees of the patent office, receiving an application for an invention, study the documentation on the object and check for novelty with the help of a search system with AI technologies. The search system analyses all queries and appeals and search results and experts, if necessary, specify the results. Machine-learning technologies can improve search results. Over time, the search system will be able to work independently; experts will only need to verify the results and make a quick decision.
ML: Our firm uses a host of analytics to maximise our clients’ patent portfolios. Patent data available today allows us to be more efficient in prosecution and allows us to assess our clients’ competitors filing trends. We use this information offensively and defensively. Analytics can inform which cases a client decides to keep alive through continued prosecution; it can also inform whether an appeal should be pursued. Analytics can help you to understand the importance of a disclosure in the patent space by analysing competitor actions and determining which competitors present a future threat to your business. In much the same way that analytics have contributed to a change in how baseball teams are constructed and managed, they can improve the input that goes into a decision during prosecution. But at the end of the day, the manager or attorney will need to make wise prosecution decisions based on the facts of the particular case based on their experience and knowledge.
Q: How might future developments in analytics change prosecution?
CA: The new tools have been extremely helpful in searches for some years and already play a role in analysis of the available information during prosecution and before, especially when making decisions as to the specific technological areas, for which patent applications shall be filed or on which a specific focus should be placed. These tools will not only increase the speed of gathering, collecting and, especially, assessing information, but will also play an increasingly important role in development as well. However, they will not – at least not in the near future – replace IP experts, rather the services that IP experts can provide will improve as a result of using these tools.
MM: The current analytic tools help us to dissect the competitor’s ownership space before we even file patent applications. This allows us to tailor our claim scope in the appropriate spot before we even receive a communication from the patent office. Future developments in analytics will continue to allow these types of strategic decisions to be made in advance of patent filings, which creates a more collaborative and in-depth analysis between inside and outside counsel. I feel more knowledgeable and involved with my clients’ business goals than ever before, and analytics is a large factor in that.
OD: Patent information analysis is a unique tool for managing technologies and innovations both at the state level and at the level of organisations. Patent research and patent landscapes have revealed trends in IP protection strategies and the technological priorities of organisations. In recent years, not only have large organisations been paying more attention to patent information, so have patent offices, so that they can evaluate the patentability of technical decisions. Numerous studies of the system using AI algorithms have made it possible to identify the optimal number of references necessary to analyse the structures of patent families. A patent family is a collection of all patent publications belonging to the same level. The concept of patent families is convenient for solving technical, linguistic and some business problems, while analysing them is more informative. Thus, in the future, patent analytics will help to simplify the prosecution of patent applications.
Q: What future changes do you foresee having an impact on patent prosecution in your jurisdiction and more broadly around the world?
MM: Everyone knows by now that it is almost a right of passage for any asserted patent to go through an inter partes review process; I think the process will continue to mimic a trial on validity. We are already seeing the process adopt the Phillips standard of claim construction rather than the broadest reasonable interpretation. In becoming more and more like a trial setting for validity, this places more strength on truly valid claims. Instead of trying to be a hog and shoot for the moon with claim scope, I advise my clients more often now to focus on the key points of novelty. Rather than having one or two patents with broad claim scopes, it is now more beneficial than ever to keep patent prosecution open (with continuations) to allow my clients to maintain protection over their business’s core inventions while giving them some ability to further round out their protectable scope with additional patents. Having multiple patents with varying claim scope also poses an intimidating threat to future infringers, as those infringers are then faced with the daunting task of filing multiple inter partes review petitions.
OD: Due to the fact that technologies do not stand still, patent law will be affected by the speed of technological developments. Every day there is an increasing demand for the automation of patent searches and the consolidation of various patent bases in many languages, which will reduce the time limits for the prosecution of applications. Increasing numbers of countries will use electronic filing and electronic prosecution. Unfortunately, today there is no such option in some countries. Electronic cooperation between foreign patent offices will be more actively developed, in particular, there will be no problem with obtaining a certified copy of the first application and sending it to a foreign office of interest. In the near future, the Patent Prosecution Highway acceleration procedure will expand its borders, with more and more countries and offices joining this programme. Thus, the terms of consideration of applications in other countries will be significantly reduced and the chances of obtaining patents will increase significantly.
ME: I think the trend towards more nationally focused prosecution will continue and possibly even increase further. Some political developments may further support this. As an example: assuming that Brexit does ultimately take place, at first glance, one would expect that with the United Kingdom still being part of the European Patent Convention, this might not have much of an impact on patent prosecution because it will still be possible to designate the United Kingdom as part of a European patent application. However, Brexit appears to have already had an impact on the initiation or rather the delay of the initiation of the Unitary Patent System and the Unified Patent Court. As a result, we have seen a number of clients take the position that if they ultimately want to enforce their patents, they would be better off trying to obtain national patents, not only in the United Kingdom but also in Germany and other European countries.
CA: As well as the political developments, as Markus has mentioned, there is also the remarkable increase of speed of technical developments and therefore the increase of numbers of inventions may lead to a higher concentration of application and prosecution activities on leading or fast-developing countries, in order to keep the overall costs at a reasonable level. This may further strengthen the focus on national filings in the future, in spite of the still increasing filing numbers at the EPO, which we will presumably also see in the next years.
Q: What advice would you give to a young attorney who is considering a career in patent prosecution?
OD: From my point of view, core education in its correct understanding (not as a method of obtaining a diploma) and the need for additional education in the field of intellectual property is critical for the formation and successful professional development of a young attorney. An education that imparts to the future specialist the skills of critical analysis and the use of scientific approach, teaches a young attorney to make decisions in non-standard situations, in conditions of insufficient or incomplete reliability of the initial data. These are crucial. Practice your skills, be brief, accurate, confident and convincing in your judgements, conclusions and decisions.
MM: I would recommend seeking opportunities to gain exposure in litigation and post-grant proceedings early on in your career. This helps patent professionals to develop a well-rounded approach to prosecution. When you understand how patents are enforced, you can prepare applications better.
ME: This is one of the truly internationally oriented professions combining scientific cutting-edge knowledge with the necessity of keeping abreast of legal developments on a global scale. It is important to have a feel for languages, especially English, so familiarising oneself with the intricacies thereof will definitely help. In my view, this can be achieved best by actually living in an English-speaking country. If I were to start a career in intellectual property again, I would also consider learning Chinese, as this seems to be increasingly more influential. It is also important to have an understanding of foreign cultures as this helps one to see the limitations of one’s own origin and background more clearly, and to better understand a client’s needs. Again: living abroad for a while does sharpen one’s own perspective (and will certainly not ruin your job prospects either). Being a patent attorney means a life-long learning experience.
Patents are the currency of the 21st century when it comes to technology and knowledge-based societies. Being part of the process of manufacturing this currency is extremely exciting and rewarding.
Go for it; although it is a long and sometimes hard process, you will not regret it.
CA: I can only echo what Markus has said: the work as a patent attorney is both demanding and challenging but it is a fascinating profession with many facets to select and on which to concentrate. The international cooperation and the experiences in foreign countries are very important aspects, and I personally have gathered many valuable experiences during my professional career also outside of Germany, notably in the United States, the Middle East and especially in Japan, where I have lived and worked for two years, both in private practice as well as in IP departments.