Worldwide: IP Fridays – Episode 22: Understanding The USPTO’s SAWS Program With Peter Zura – JP And The US Join The Hague-System – Validating European Patents In Morocco

Last Updated: February 25 2015
Article by Rolf Claessen, Kenneth Suzan and Peter Zura

Podcast: Play in new window | Download (Duration: 31:16 — 18.1MB)

This time Peter Zura gives us the inside scoop of the SAWS program at the USPTO. Also, you will find out how to validate European Patents in Morocco. And finally, Japan and the US joined the Hague-System for design protection. Have fun!

Episode 22 – February 20, 2015

RC = Rolf Claessen

KS = Kenneth Suzan

Hi.  This is Gene Quinn.  I am a patent attorney and the founder of ipwatchdog.com and you are listening to IP Fridays.

KS:      Hello and welcome to this episode of IP Fridays.  Our names are Ken Suzan and Rolf Claessen and this is THE podcast dedicated to Intellectual Property.  It does not matter where you are from, in-house or private practice, novice or expert, we will help you stay up-to-date with current topics in the fields of trademarks, patents, design and copyright, discover useful tools and much more.

RC:      Welcome to the 22nd episode of IP Fridays.  Today we have a special guest, Peter Zura, who is a fellow patent attorney and he is also a fellow blogger.  He is the author of the blog "The 271 Patent Blog" which has been a little bit quiet in recent times but I really enjoyed listening to that blog, or actually reading that blog.  Peter, if you listen to this, I really want to encourage you to start blogging again and I promise if you start blogging again, I will repost everything you do on IP news.com and maybe we can also include one of the stories in IP Fridays.  Peter will tell us more about the SAWS Program within the USPTO.  It is a program to deal with let's say difficult patent applications and you will learn more about that in this episode.  Then I will tell you about the U.S. and Japan joining the Hauge system.  Basically an international design protection system administered by WIPO and I will also tell you more about Morocco which is now accepting granted European patents as their own patents so you can basically validate European patents in Morocco which is not in Europe but in Africa.  For now, let's turn over the microphone to Ken who had the chance to interview Peter Zura.

KEN SUZAN'S INTERVIEW WITH PETER ZURA:

KS:      Rolf, I am speaking now to Peter Zura, a partner in the Chicago office of Barnes & Thornburg and a member of the firm's Intellectual Property Law Department.  Mr. Zura's practice includes preparing, prosecuting and securing patent portfolio development and enforcement, preparing, prosecuting and securing patent protection for his clients' innovations, and providing intellectual property counseling including advice on patent infringement, validity and large portfolio due diligence studies for acquisitions, licensing and pre-suit purposes.  Peter spent time as a patent examiner in the United States Patent and Trademark Office and as an electrical engineer at General Dynamics Land Systems Division.  Mr. Zura earned his B.S. in electrical engineering from Oakland University in 1990 and his J.D. from Michigan State University College of Law in 1997.  He also received his LLM from the George Washington University School of Law in 2002.  Welcome, Peter, to IP Fridays.

PZ:      Thanks Ken.  Thanks for having me on.

KS:      Peter, we are going to talk today about the SAWS Program at the USPTO.  What exactly is the SAWS Program?

PZ:      Well it's one of these things that everybody kind of has known about but it's never really been in any public consciousness so to speak.  I was an examiner in the late 90's and I was aware of the program.  However, I had not ever used it.  It was brought up as an option once in a case that I had but essentially at the time there were other tools available for us to be able to deal with the application.  From what I have seen from internal PTO memos, the earliest one I have seen dates back to 1989 and what that was was essentially kind of the stop gap and it became a little more prevalent during the last 90's, particularly after the State Street Bank decision and what had happened was there would be instances where you receive a patent application and reading through the specification there is enough technical information in there however something doesn't quite smell right, as it were.  You would have inventions that essentially worked on things that you could borderline describe as a perpetual motion machine, cold fusion, things of that nature where there were these fantastic inventions and quite often, at least in my experience and from the circumstantial evidence I have seen from speaking with others, that quite often they would be involved in typically individual inventors that believe that they have found this great breakthrough technology but going through it you are left with a sense that this can't possibly work.  The SAWS Program was a way for examiners to kind of flag it to bring in more senior patent office personnel to have a look at the application to see what really is going on here and in many cases it just avoids the "embarrassment" of the Patent Office releasing a patent where somebody looks at this and says this is physically impossible.  How could the United States Patent and Trademark Office release a patent on this type of subject matter?  This is horrible.  The patent system is broken, and so on and so forth.  So, it's merely intended as a second set of eyes for inventions that again where on their face appear to be legitimate but after a bit of further digging it becomes quite apparent that there is much less here than meets the eye.

KS:      Is SAWS an acronym?  Does it mean anything?

PZ:      Right.  It essentially stands for the Sensitive Application Warning System and again it is just basically a flag for an application.  The rub there is that when it is flagged, it is known that other people get brought in, but what the procedure is for how the application is handled is quite the mystery to this day.

KS:      There are a lot of people in the patent bar, as well as in the legal press, have been up in arms over the program.  Is it really as big of a deal as people are suggesting?

PZ:      The short answer is no (with a very large asterisk).  The program itself isn't utilized that much.  That being said, it was interesting that the Patent Office just released some statistics recently on this and I was actually surprised that, for example, in December of 2014 there were over 500 applications that were flagged for the SAWS Program and that's just in the month of December.  So the rub there is that most of the people that have had experience with this...sorry...there have been quite a few people that probably had an experience with this.  Whether they were actually aware that they were on the SAWS Program is a different question.  Most of the people that had found out either directly or indirectly from the examiner or some other USPTO employee that they were on the program, the number is very, very small.  So as far as people being worried about whether this is going to affect me, the chances are actually relatively small that you would be selected for this type of program.

With that being said, there are a number of things about it that I think everybody who interacts with the Patent Office has some or a fair amount of concern over and that is (1) if this program (well it does exist but if it is being maintained by the Patent Office), why are they not informing applicants as to how exactly does this program work, what can you do if your application is on the program, and what ramifications does this have?  To-date, all we could find out, at least from the information that the Patent Office has put forward, is that this second set of eyes review has led to an increased in pendency on the application.  In terms of a real term effect, that is unknown and I have had situations like this.  It was not known to me and I had no reason to suspect that the SAWS Program was implemented but it wouldn't surprise me if it were true is that you have applications where everything seems to be going normal, you start reaching a point where there is Notice of Allowance that is either issued or about to issue and then out of the blue you get a call from the examiner saying that they are going to be issuing a rejection.  The response is typically, why is that, and they say that they have to look over a few more things and after the discussion it becomes pretty clear that somebody had talked to this "examiner" to say hey listen gum up the works on this because we can't let this go the way that it is and that part I think frustrates a lot of applicants.  I think a fair amount of people, particularly in the software and computer arts have experienced something to this effect and while the Patent Office can always say well listen we are just being extra careful we want a higher quality of patents so on and so forth it involves real costs from the applicant's side.  It's not just a mere well we had to wait eight more months to get it, you had to fight for eight months to get this which typically involves thousands, if not tens of thousands of dollars depending on how rough the Patent Office wanted to be on you and it has a real effect on applicants and I think the Patent Office has a responsibility to come forward with this and say listen this is how the Program works and this is what we are going to do and to the extent it can be codified, it should.  I mean, there is no reason why you should have these, for lack of a better description, a shadow program that puts that applicants in practically this "Kafkaesque" situation where you can't get your application allowed and nobody will explain to you why it is being rejected.  In most cases it's not like the rejections are any better.  In most instances they are actually much worse and it becomes quite apparent that somebody on the other side, meaning at the Patent Office, is simply throwing up references against you in hopes that somehow they can make it stick and it's unacceptable.

KS:      Peter, I have a question for you and that is how will a practitioner or applicant know their application has indeed been slated for or placed on the SAWS Program?

PZ:      That's actually a fantastic question because according to the Patent Office memos there is mention of an internal notification and it suggests that the applicant should also be notified.  It is not an absolute rule.  From the people who have experienced this, the weird part about it is that in many instances when the notification is given, it is given (a) begrudgingly by the examiner, and (b) when the examiner is pressed for more information, they immediately clam up which it begins to look very, very suspicious and it's not entirely clear how the Patent Office intends to deal with this moving forward.  It appears to be a pretty big deal from their end where they have taken steps to try to assuage fears from the practitioner's side that listen this isn't some type of a back alley program that we pick and choose people that we don't like and start rejecting their applications for frankly arbitrary and capricious purposes but again the fact that they have been so reluctant to talk about it, and that examiners have kind of hinted during their conversations with applicants that they shouldn't or can't speak further on it, really...it smells.

KS:      Sure.  Is there anything Peter that applicants can do to insure that their applications will not get put onto the SAWS Program?

PZ:      Well, yes and no.  What it looks like, at least from the statistics that the Patent Office has provided, a large majority of these flaggings for the SAWS Program occur primarily in the computer arts.  Just looking at recent statistics here that you have technology centers 1600, 2100, 3600, they make up a large bulk of the SAWS flaggings that have taken place and what my sort of theory on this is there are two kinds of scenarios in which applications will get flagged.  First is that if because one of the problematic features of this SAWS Program is that it is not simply merit based but it is also PR based, or political.  If you are representing somebody that is a notorious NPE, or troll as they are referred to sometimes, then I would really have my radar up on this particularly if you started making the rounds in the press regarding your licensing and/or enforcement activities.  I wouldn't be surprised at all that some of them, if not many of them, actually experience this type of treatment at the Patent Office.  That also can explain why a lot of these NPE's create so many shell companies.  I think that once you kind of cloak yourself in a morass of shell companies, it would be very difficult for the Patent Office, or particularly the examiner, to really identify you as one of these people that you need to have your guard up against.

The second is that it appears that a lot of the stuff goes to electronic commerce, a lot of computer software type of things.  Again, this does happen in the chemical, biochemical arts as well.  I don't have as much information on those particular technological areas but a lot of this is rooted in 101 issues meaning that ever since Alice came out, I think those guidelines that are used for Alice there are a lot of parallelisms between that and the SAWS Program.  I think a bit of the irony here to is that if the Patent Office is looking to keep these Alice-related type of applications or flag them for additional scrutiny, I am not exactly sure what the examiner and/or the Office gain by flagging these applications because they already have the tools that they need vis a vis 35 USC 101, 35 USC 112 to be able to deal with those applications on their own if those issues are indeed there.  So I think if you are in this area or have clients in the area or are an applicant in this area I think you get a two for one if you are carefully drafting your application and specifically your claims to avoid 101 issues, you will most likely have sort of a side effect or benefit of being a lesser of a target for the SAWS Program as well.

KS:      Excellent.  Peter, what can be done to improve SAWS and what is the future of the SAWS Program at the USPTO in your opinion?

PZ:      I think for SAWS, the Patent Office needs to get out in front of this a little more.  Again, I don't think that the threat overall to all patent applicants is that great but again, it's just like lightening, there are very few people that are going to get struck by it through the course of the year but everybody has enough sense to run from the golf course when the thunder clouds start rolling in and I think you kind of hear about it happening to other people and you just pray that it's not going to be happening to you.  It's a rational panic I think that you see in some corners of the patent bar and the Patent Office could really do a lot in at least as a first step at least formalizing this process either with some type of announcement or perhaps even if they are looking to incorporate this as part of regular USPTO policy that incorporating it in to the MPEPand the Code of the CFR.  I don't know.  I believe that the Program will probably continue.  I don't know that the Patent Office has, at least today, been sticking by this program and, again, I'm not sure what it really gets.  Maybe my interpretation of what I have seen from Patent Office officials is that this is another way of calling it a second set of eyes review.  If, in fact, that is really the case, that's okay.  The problem there though is that the political aspects of it are a bit troubling in that it may have nothing to do with the technology that you are discussing but it may have everything to do with the fact that a bunch of bulletin board commenters that flashed out are complaining about your patent because it's a horrible patent that everybody has been doing for eons and that is one of the things that is bad in that the criteria for being on SAWS is that it brings unwanted media attention to the Patent Office.  Well it is nothing but criticisms and basically denigrations of the Patent Office on the patent application that they are reviewing and/or allowing and that's all they do and if that was really the standard a lot of the applications in the computer arts would be needlessly delayed.

KS:      Sure.  Peter, thank you so much for joining us today on IP Fridays.  How can the listeners get in contact with you if they want to chat with you?

PZ:      You can look me up on the Barnes & Thornburg Website, they are more than welcome to e-mail me at peter.zura@btlaw.com, or feel free to give me a call at 312-214-4596.

KS:      Thank you Peter for joining us today.

PZ:      Thank you Ken.

RC:      If you want to look up Peter's full profile, you can head over to www.ipfridays.com/peterzura.

On the 13th of February, the United States of America and Japan joined International Design System enlisted by the Hauge System administered by WIPO and they deposited instruments to rectify the agreement so this bring up the membership in the Hauge System to 64 contracting parties and this is a really big step in the design world since most countries already know registered designs but the U.S. actually handle designs as design patents and the U.S. so far had really a lot more requirements to get design protection than many other countries so from the 13th of May, 2015 on it will be possible to file a single application for design with WIPO within the Hauge System and applicants will be able to get protection in 64 contracting parties such as, for example, U.S., Japan and also Germany or the E.U. (which is not a country but you can designate the E.U. anyway), and Switzerland and many, many other countries.  Our firm is filing quite a few designs and we are really happy to now be able to file designs with this system in the U.S. and Japan.  Of course there are some things to consider.  For example, as far as I know, but please correct me if I am wrong, if you are cancelling or otherwise abandoning a design in the U.S., you will no longer be able to derive protection for this design in the U.S. and let's take a particular example, if you are filing a design for a phone shape, let's say the iPhone 5C in black and white and then later you are filing design protection for the iPhone 5C in blue and later on you are cancelling a design or abandoning the design in blue, then even though you have the design protection in black and white, you will no longer be able to go after infringers who are making or producing or offering the product with the design in blue.  The Hague System offers a solution to this.  So, if you are filing a new application, you can say that you do not want protection for certain designs within the application in certain countries.  For example, if you are filing designs in black and white as line drawing with  hatching which is perfectly fine for the U.S., you can say in the application that this design should have protection in the U.S. but the other designs that you are filing with the same application, for example, a phone in blue and red and orange and green and whatever you can say that these should only have protection in all countries except the U.S. or whatever you want to do.  Of course, you should really familiarize yourself with the requirements for line drawings and hatchings kand in general the graphical representation needed for design protection in the U.S. to make it enforceable.  The case law is quite settled and not necessarily self-explanatory so if you are unsure about this, you might want to consult a U.S. attorney, design attorney or patent attorney who can for sure help you with the requirements for designs in the U.S.

So, the key takeaway from this is that starting with the 13th of May, 2015, you will be able to file a single application for registered designs having protection in up to 64 contracting parties including the U.S., Japan, the E.U. or Germany and many other countries.  If you want to learn more about this and read the full press release by WIPO, please go to www.ipfridays.com/hagueusjp.

Another thing I wanted to tell you about is the validation of European patents in Morocco starting from the first of March, 2015 you will be able to validate European patents in Morocco.  There are particular rules governing this process.  You will have to pay a validation fee which is fixed at 240 Euros to the European Patent Office within six months from the date on which the European Patent Bulletin mentions the publication of the European Search Report or for European PCT applications entering the European phase it will be 31 months from the date of filing, or the oldest priority date or six months from the date of publication of the International Search Report, whichever is the latest.  If the validation fee is not paid within the time limit, the request for validation will be deemed withdrawn but you will be able to still pay the validation fee within a grace period of two months with a 50% surcharge.  So this is really an interesting development.  A country outside Europe, Morocco is in Africa as you know, is accepting the results from the European Patent Office as their own results and patents granted by the European Patent Office will be possibly valid in Morocco after grant. This could set an example for many other countries to come around the world, not necessarily in Europe.  You might recall that it is already possible to gain patent protection in Hong Kong based on older treaties when Hong Kong was still a colony of the U.K. but this is really a new development where a country with basically no official relationship with Europe or the European Patent System has allowed the working results of the European Patent Office to be valid in this respective country.  So let's see what other countries will follow suit.  I will be very interested to see the developments within the next years.

If you want to read the official notice from the European Patent Office you can go to www.ipfridays.com/morocco

KS:      That's it for this episode.  If you liked what you heard, please show us your love by visiting http://ipfridays.com/love  and tweet a link to this show.  We would be so grateful if you would do that.  It would help us out to get the word out.  Also, please subscribe to our podcast at ipfridays.com or on iTunes or Stitcher.com.  If you have a question or want to be featured in one of the upcoming episodes, please send us your feedback at http://ipfridays.com/feedback.  Also, please leave us a review on iTunes.  You can go to http://ipfridays.com/itunes and it will take you right to the correct page on iTunes.  If you want to get mentioned on this podcast or even have comments within the next episode, please leave us your voicemail at http://ipfridays.com/voicemail .

You have been listening to an episode of IP Fridays.  The views expressed by the participants of this program are their own and do not represent the views of nor are they endorsed by their respective law firms.  None of the content should be considered legal advice.  The IP Fridays podcast should not be construed as legal advice or legal opinion on any specific facts or circumstances.  The contents of this podcast are intended for general informational purposes only and you are urged to consult your own lawyer on any specific legal questions.  As always, consult a lawyer or patent or trademark attorney.

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