Case: 1:12-cv Document #: 22 Filed: 06/12/12 Page 1 of 2 PageID #:54 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

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1 Case: 1:12-cv Document #: 22 Filed: 06/12/12 Page 1 of 2 PageID #:54 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION JOHN WILEY & SONS, LTD., and AMERICAN INSTITUTE OF PHYSICS, Plaintiff, MCDONNELL BOEHNEN HULBERT & BERGHOFF LLP, and JOHN DOE NOS. 1-10, and v. Defendants, THE UNITED STATES PATENT AND TRADEMARK OFFICE, Proposed Intervening Defendant. 12 C 1446 Judge Norgle MOTION TO INTERVENE OF THE UNITED STATES PATENT AND TRADEMARK OFFICE The United States Patent and Trademark Office ( USPTO, pursuant to Rule 24 of the Federal Rules of Civil Procedure, respectfully moves this Court to enter an order granting it the right to intervene and to file the Answer, Affirmative Defense and Counterclaim attached as Exhibit A. A memorandum of law accompanies this motion. Based upon the government s discussions with counsel for plaintiff and defendant, plaintiff reserves its right to oppose this motion, while defendant does not oppose it. 1

2 Case: 1:12-cv Document #: 22 Filed: 06/12/12 Page 2 of 2 PageID #:55 CONCLUSION The USPTO respectfully requests that this Court grant its Motion to Intervene in the instant proceeding and accept its Answer, Affirmative Defense and Counterclaim, and for all other relief this Court deems appropriate and just. DATED: May 31, 2012 Respectfully submitted, PATRICK J. FITZGERALD United States Attorney By: s/katherine E. Beaumont KATHERINE E. BEAUMONT Assistant United States Attorney 219 South Dearborn Street Chicago, Illinois ( katherine.beaumont@usdoj.gov BERNARD J. KNIGHT, JR. General Counsel RAYMOND T. CHEN Solicitor THOMAS W. KRAUSE THOMAS L. CASAGRANDE Associate Solicitors United States Patent and Trademark Office Madison Building East, Room 10B Dulany Street Alexandria, Virginia JOHN FARGO Director, Intellectual Property Staff Commercial Litigation Branch Civil Division Department of Justice Washington, DC ( john.fargo@usdoj.gov 2

3 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 1 of 17 PageID #:56 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION JOHN WILEY & SONS, LTD., and AMERICAN INSTITUTE OF PHYSICS, Plaintiffs, MCDONNELL BOEHNEN HULBERT & BERGHOFF LLP, and JOHN DOE NOS. 1-10, and v. Defendants, THE UNITED STATES PATENT AND TRADEMARK OFFICE, Intervening Defendant and Counterclaim Plaintiff. 12 C 1446 Judge Norgle ANSWER AND COUNTERCLAIM OF INTERVENING DEFENDANT THE UNITED STATES PATENT AND TRADEMARK OFFICE The United States Patent and Trademark Office ( USPTO, by and through Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, answers the complaint as follows: ANSWER First Defense The copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of

4 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 2 of 17 PageID #:57 NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers, and/or their representatives, such as defendant McDonnell constitutes a fair use of such copyrighted works under 17 U.S.C. 107, and therefore is not an infringement of copyright. Second Defense Answering the specific allegations of plaintiff s complaint for employment discrimination, defendant admits, denies or otherwise avers as follows: Nature of the Action 1. Complaint: This is an action for copyright infringement. It arises from the unauthorized copying and/or distribution of plaintiffs' copyrighted works by a law firm, and its professionals, in connection with their patent prosecution practices, so that defendants and their clients may reap a profit. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. Jurisdiction and Venue 2. Complaint: This Court has subject matter jurisdiction over the claim in this action pursuant to 28 U.S.C and 1338 because it arises under the Copyright Act, 17 U.S.C. 101 et seq. Answer: The USPTO admits subject matter jurisdiction over the claim asserted. 2

5 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 3 of 17 PageID #:58 3. Complaint: Venue is proper in this Court under 28 U.S.C and Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. Parties 4. Complaint: Wiley is a United Kingdom corporation with its principal place of business in Chichester, England. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 5. Complaint: AIP is a New York not-for-profit corporation with its principal place of business in Melville, New York. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 6. Complaint: Upon information and belief, McDonnell is a law firm with its principal place of business in Chicago, Illinois. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 7. Complaint: Defendants John Doe Nos are partners, associates or other employees of McDonnell, whose identities are not currently known to plaintiffs. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 3

6 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 4 of 17 PageID #:59 The Business of Plaintiffs 8. Complaint: Plaintiffs publish many of the world's leading scientific, technology and medical journals. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 9. Complaint: Plaintiffs' journals consist primarily of peer-reviewed articles, written by one or more scholars, often based upon original research. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 10. Complaint: Plaintiffs invest heavily in publishing their journals. Plaintiffs incur substantial costs for copyediting, proofreading, typesetting, printing, binding, distributing and marketing their journals, as well as administering the peer-review process that is integral to the publication of those works, and the progress of science. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 11. Complaint: Each plaintiff ordinarily requires its authors to assign or exclusively license to it the copyright in each article accepted for publication in one of its journals. This practice enables each plaintiff to maximize the dissemination of each work. Plaintiffs routinely register their copyrights in their journals published in the United States. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 4

7 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 5 of 17 PageID #: Complaint: Plaintiffs earn a substantial portion of their revenue from the publication of their copyrighted journals both through (a subscriptions to, and the sale of individual issues of, those journals, and (b the licensing of the rights that the copyright law provides with respect to the content of those journals. Consistent with the purpose of Article 1, Section 8, Clause 8, of the Constitution of the United States, this revenue provides an incentive for creative expression. Plaintiffs would suffer serious financial injury if the copyrights in those journals were not enforced. A substantial decline in their income could cause plaintiffs to cease publishing one or more deserving journals. This would adversely impact the creation of new works, scholarly endeavor and, ultimately, scientific progress. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. The Unlawful Acts of Defendants 13. Complaint: McDonnell is engaged in the practice of law. On its website, McDonnell states "we know high-technology industries, and we know the law. We work with our clients to provide them with the benefit of our extensive knowledge and experience, so that they can rest assured that their technology assets are protected." Among other things, McDonnell files and prosecutes United States patent applications on behalf of its clients. In addition, McDonnell holds itself out as practicing "intellectual property law," which includes copyright law. Answer: The USPTO admits that attorneys from the McDonnell law firm practice before the USPTO representing applicants for United States Patents. The USPTO lacks knowledge or information sufficient to form a belief about the truth of the balance of this allegation, and so denies the same. 5

8 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 6 of 17 PageID #: Complaint: In connection with researching, filing and prosecuting certain patent applications, McDonnell made and/or distributed to the United States Patent and Trademark Office ("PTO", and perhaps others, unauthorized copies of copyrighted articles from plaintiffs' journals, including but not limited to those identified on Schedule A. Such unauthorized copies were used for the commercial benefit of defendants and their clients. Answer: The USPTO admits that attorneys from the McDonnell firm have submitted copies of prior art materials in the form of published articles in connection with patent applications ( non-patent literature or NPL for which McDonnell is attorney of record. The USPTO lacks knowledge or information sufficient to form a belief about the truth of the balance of this allegation, and so denies the same. 15. Complaint: Upon information and belief, defendants made (a additional copies of the copyrighted works that defendants included or cited in their patent applications to the PTO, including those identified on Schedule A, and (b copies of plaintiffs' copyrighted works that defendants considered in connection with those applications, but did not ultimately cite or provide to the PTO. Plaintiffs cannot know the full extent of defendants' copying without discovery. Apart from the copying of plaintiffs' works accompanying the patent filings described above, this internal copying infringes plaintiffs' copyrights. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 6

9 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 7 of 17 PageID #:62 Claim for Relief 16. Complaint: Plaintiffs repeat the averments contained in paragraphs 1 through 15 as if set forth in full. Answer: The USPTO repeats and re-alleges its answers to paragraphs 1 15 above as if fully set forth herein. 17. Complaint: Plaintiffs either own the copyrights in the articles contained in the journals they publish or, alternatively, exclusively license those copyrights ("Plaintiffs' Copyrights". Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 18. Complaint: Defendants have infringed certain of the Plaintiffs' Copyrights, including, but not limited to, the registered copyrights in the articles listed on Schedule A by making unauthorized copies of them for internal use, and for distribution outside McDonnell. Answer: The USPTO denies that the copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers and/or their representatives, such as defendant McDonnell, infringes any United States Copyrights in such NPL. The USPTO lacks knowledge or information sufficient to form a belief about the truth of the balance of this allegation, and so denies the same. 7

10 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 8 of 17 PageID #: Complaint: This mere multiplication of copies for the for-profit business purposes of defendants is not privileged under the law. Answer: The USPTO denies that the copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers, and/or their representatives, such as defendant McDonnell, infringes any United States Copyrights in such NPL. The USPTO lacks knowledge or information sufficient to form a belief about the truth of the balance of this allegation, and so denies the same. 20. Complaint: Defendants are prosecuting patents for the profit of themselves and their clients and are using Plaintiffs' Copyrights as part of that profit-making activity without due compensation to plaintiffs. Upon information and belief, McDonnell has charged its clients for the copies it has made of plaintiffs copyrighted works, and thereby made a direct profit as a result of its infringement. Answer: The USPTO denies that the copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers, and/or their representatives, such as defendant McDonnell, infringes any 8

11 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 9 of 17 PageID #:64 United States Copyrights in such NPL. The United States lacks knowledge or information sufficient to form a belief about the truth of the balance of this allegation, and so denies the same. their entirety. 21. Complaint: Defendants have copied and/or distributed the copyrighted articles in Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 22. Complaint: Plaintiffs publish, sell and distribute journals, and license the copyrighted content contained in them, for precisely these types of use. Plaintiffs are ready, willing and able to provide defendants with licenses for their use either directly, through their licensing agents, or otherwise. Nevertheless, defendants have not acquired any of the licenses necessary to make their copying and distribution of plaintiffs' copyrighted articles lawful. Answer: The USPTO lacks knowledge or information sufficient to form a belief about the truth of this allegation, and so denies the same. 23. Complaint: The acts of defendants have irreparably damaged and, unless enjoined, will continue to irreparably damage plaintiffs. Plaintiffs have no adequate remedy at law for these wrongs and injuries. Plaintiffs are, therefore, entitled to a preliminary and permanent injunction restraining and enjoining defendants and their agents, servants, employees, attorneys, and all persons acting in concert with them, from infringing the Plaintiffs' Copyrights. Answer: The USPTO denies that the copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually 9

12 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 10 of 17 PageID #:65 submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers, and/or their representatives, such as defendant McDonnell, infringes any United States Copyrights in such NPL, has wronged, injured, or damaged any United States Copyright holder, or should be enjoined. The USPTO lacks knowledge or information sufficient to form a belief about the truth of the balance of this allegation, and so denies the same. 24. Complaint: Defendants have willfully infringed the Plaintiffs' Copyrights. Answer: The USPTO denies that the copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers, and/or their representatives, such as defendant McDonnell, infringes any United States Copyrights in such NPL or results in any compensation due any United States Copyright holder. The USPTO lacks knowledge or information sufficient to form a belief about the truth of the balance of this allegation, and so denies the same. 25. Complaint: Plaintiffs are entitled to recover damages sustained as a result of defendants' unlawful conduct, including (1 defendants' profits, or (2 plaintiffs' damages, or alternatively, at plaintiffs' election, (3 statutory damages. Answer: The USPTO denies that the copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or 10

13 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 11 of 17 PageID #:66 relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers, and/or their representatives, such as defendant McDonnell, infringes any United States Copyrights in such NPL or results in any compensation due any United States Copyright holder. The USPTO lacks knowledge or information sufficient to form a belief about the truth of the balance of this allegation, and so denies the same. COUNTERCLAIM FOR DECLARATORY JUDGMENT Intervening defendant and counterclaim plaintiff United States Patent and Trademark Office hereby counterclaims for a declaratory judgment of non-infringement of copyright as to the copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers, and/or their representatives, such as defendant McDonnell, for purposes of (1 the filing and prosecution of a U.S. patent application, and (2 the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent. In support, the USPTO alleges as follows: Parties ( USPTO. 1. Counterclaim plaintiff is the United States Patent and Trademark Office 11

14 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 12 of 17 PageID #:67 2. On information and belief derived from the allegations in the Complaint in this matter, counterclaim defendant American Institute of Physics is a New York not-for-profit corporation with its principal place of business in Melville, NY. 3. On information and belief derived from the allegations in the Complaint in this matter, counterclaim defendant John Wiley & Sons, Ltd., is a United Kingdom corporation with its principal place of business in Chichester, England. Jurisdiction and Venue 4. This is a counterclaim for a declaratory judgment pursuant to the Declaratory Judgment Act. Subject matter jurisdiction over this counterclaim is based upon 28 U.S.C. 1331, 1338, 1345, and 2201(a. 5. Personal jurisdiction and venue are proper in this judicial district under 28 U.S.C. 1391, 1400, and Allegations 6. Article I, Section 8 of the United States Constitution provides, in pertinent part, that Congress shall have the Power... To promote the Progress of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. 7. Pursuant to this constitutional grant of authority, Congress enacted the Patent Act, 35 U.S.C. 100 et seq. 8. Section 101 of the Patent Act provides that Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title. 12

15 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 13 of 17 PageID #:68 9. Section 102 of the Patent Act further provides that A person shall be entitled to a patent unless (a the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or (b the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.... (Emphases added. 10. Section 103(a of the Patent Act further provides that A patent may not be obtained... if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. (emphasis added. 11. Pursuant to the authority granted it in 35 U.S.C. 2(b(2, the USPTO promulgated regulations governing the conduct of proceedings before it. These regulations appear in Title 37 of the United States Code of Federal Regulations. 12. In order for the USPTO to determine whether patent applications comply with the statutory directives in 35 U.S.C. 102 and 103(a, the USPTO promulgated a regulation, set forth at 37 C.F.R. 1.56, which imposes upon patent applicants a duty to disclose information material to patentability. This regulation provides, in pertinent part: (a A patent by its very nature is affected with a public interest. The public interest is best served, and the most effective patent examination occurs when, at the time an application is being examined, the Office is aware of and evaluates the teachings of all information material to patentability. Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability as defined in this section.... The duty to disclose all information known to be material to patentability is deemed to be satisfied if all information known to be material to patentability of any claim issued in a patent was cited by the Office or submitted to the Office in the manner prescribed by 1.97(b-(d 13

16 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 14 of 17 PageID #:69 and The Office encourages applicants to carefully examine:... (2 The closest information over which individuals associated with the filing or prosecution of a patent application believe any pending claim patentably defines, to make sure that any material information contained therein is disclosed to the Office. (Emphases added C.F.R encourages patent applicants to file an information disclosure statement (IDS along with the application. The IDS lists all publications the applicant believes should be submitted for consideration in order to fulfill the duty of candor in Under 37 C.F.R. 1.98, the applicant is required to include with the IDS a copy of each such publication listed in the IDS, along with a concise explanation of its relevance to the patentability of the alleged invention. 14. To ensure that issued patents are enforceable only to the extent justified by the state of the prior art when they issued, 35 U.S.C. 301 permits any person to submit potentially material prior art printed publications for inclusion in the patent file. 15. To further the effectiveness of the USPTO s ability to determine the merit of patent applications, a newly enacted provision of the America Invents Act, which will be codified at 35 U.S.C. 122(e upon taking effect in September 2012, will permit any third party to submit to the USPTO printed publications of potential relevance to the examination of the application. 16. To the same effect, 37 C.F.R also permits members of the public to submit publications relevant to a pending published patent application. 17. In addition to facilitating the applicant s fulfillment of the duty of candor, submission of relevant publications also facilitates the USPTO patent examiner s obligation, set forth in 37 C.F.R , to make a thorough examination of the available prior art relating to the subject matter of the claimed invention. 14

17 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 15 of 17 PageID #: All of these statutory enactments and duly promulgated regulations exist to faithfully implement the Constitution s directive to Congress [t]o promote the Progress of Science and the useful Arts by ensuring that inventors have exclusive, limited-in-time rights in their discoveries. 19. When a patent attorney, in the course of representing a patent applicant, submits a copy or copies of a printed publication (for purposes of permitting the patent examiner to evaluate patentability under 35 U.S.C. 102 or a publication in the prior art (for purposes of permitting the patent examiner to evaluate patentability under 35 U.S.C. 103(a by submitting it in an IDS or at another time during the patent examination process, the patent attorney is doing so because of the requirements of the United States Code, the United States Code of Federal Regulations, and his or her oath of office as a member of the bar of the USPTO. 20. While the issuance of a U.S. Patent may or may not, depending on the desire of the inventor or the inventor s assignee, present the holder with the ability to seek a profit through enforcement of the patent, it primarily and more directly serves a Constitutionally enshrined example of the public interest in promot[ing] the Progress of Science and the useful Arts. 21. Copyrighted printed publications are submitted to and reviewed by the USPTO for the purpose of permitting the USPTO to compare the alleged invention with the state of the existing art at the time of the alleged invention in order to determine whether a patent applicant has invented or discovered something new and useful as required by statute, and not to publicize or take credit for the author s research or hypothesis. 22. The copyrighted printed publications submitted to the USPTO in the discharge of the above-described obligations thus are submitted solely for their ideas and factual content, and not for any expressive content. 23. The USPTO s assessment of material and potentially relevant prior art printed publications has been part of the patent examination process since the Patent Act of

18 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 16 of 17 PageID #:71 conditioned the granting of patents only if the alleged invention was not previously described in any printed publication. Yet the USPTO is unaware of the filing of any lawsuit challenging the copying and submission of copyrighted NPL prior to this year. 24. The copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers, and/or their representatives, such as defendant McDonnell, constitutes a fair use of such copyrighted works under 17 U.S.C. 107, and therefore is not an infringement of copyright. PRAYER FOR RELIEF WHEREFORE, The United States Patent and Trademark Office prays that the court enter judgment in favor of defendants and against plaintiffs as follows: A. That the court declare, pursuant to 17 U.S.C. 107 and 28 U.S.C. 2201, that the copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers, and/or their representatives, such as defendant McDonnell, constitutes a fair use of such copyrighted works under 17 U.S.C. 107, and therefore is not an infringement of copyright. B. That the court dismiss plaintiffs claims with prejudice; 16

19 Case: 1:12-cv Document #: 22-1 Filed: 06/12/12 Page 17 of 17 PageID #:72 C. That the court award defendants their reasonable attorneys fees as part of the costs; and D. That the court award the defendants such other or further relief that the court deems just. Respectfully submitted, PATRICK J. FITZGERALD United States Attorney By: s/ Katherine E. Beaumont KATHERINE E. BEAUMONT Assistant United States Attorney 219 South Dearborn Street Chicago, Illinois ( JOHN FARGO Director, Intellectual Property Staff Commercial Litigation Branch Civil Division Department of Justice Washington, D.C ( BERNARD J. KNIGHT, JR. General Counsel RAYMOND T. CHEN Solicitor THOMAS W. KRAUSE THOMAS L. CASAGRANDE Associate Solicitors United States Patent and Trademark Office Madison Building East, Room 10B Dulany Street Alexandria, Virginia

20 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 1 of 16 PageID #:73 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION JOHN WILEY & SONS, LTD., and AMERICAN INSTITUTE OF PHYSICS, Plaintiffs, MCDONNELL BOEHNEN HULBERT & BERGHOFF LLP, and JOHN DOE NOS. 1-10, and v. Defendants, THE UNITED STATES PATENT AND TRADEMARK OFFICE, Proposed Intervening Defendant. 12 C 1446 Judge Norgle MEMORANDUM IN SUPPORT OF MOTION TO INTERVENE OF THE UNITED STATES PATENT AND TRADEMARK OFFICE Introduction The United States Patent and Trademark Office ( USPTO, subject to the policy direction of the Secretary of Commerce (see 35 U.S.C. 1(a, moves pursuant to Fed. R. Civ. P. 24 to enter an order granting it the right to intervene and to file the Answer and Counterclaim attached as Exhibit A. This proposed intervention is for the limited purpose of asserting that copying and distribution of copyrighted non-patent literature (NPL by defendants that is necessary and incidental to the filing and prosecution of a U.S. patent application, and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any

21 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 2 of 16 PageID #:74 issued U.S. Patent, is privileged and constitutes a fair use of such copyrighted works under 17 U.S.C Under Rule 24, the USPTO has three independent bases for such intervention: (1 intervention as a matter of right under Rule 24(a(2 based on the USPTO s interest in the case and impairment of its ability to protect that interest if denied the right to intervene; (2 permissive intervention by a government agency under Rule 24(b(2(A and/or (B, because the USPTO advises the President and the Executive Branch on intellectual property matters, including the Copyright Act, which is the basis of the plaintiffs claim and the defendants anticipated defense, and because the USPTO administers the Patent Act and regulations under it, which are inextricably intertwined in the plaintiffs claims and part of the defendants anticipated defense; and (3 permissive intervention under Rule 24(b(1(B because the United States has a claim or defense that shares with the main action a common question of law or fact. The United States and the entire patent system instituted by Congress are at risk of serious harm if the USPTO is denied intervention in the instant case. If this Court grants the plaintiffs the relief they request which would be a finding that the defendant patent prosecutors violated copyright law by copying certain materials and distributing them to the USPTO even though Patent Act regulations require this submittal the result would likely cause significant delays in patent prosecution and significant negative impacts on the efficiency, quality, and cost effectiveness of the patent process. This would prove particularly detrimental because invention and patent applications are at an all-time high and are only expected to increase in response to Congress recent major legislation, the America Invents Act of 2011, Pub. L. No , aimed at promoting American innovation and enterprise. The requested relief would have a significant adverse effect not just on patent prosecution, but also patent infringement litigation, which often 2

22 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 3 of 16 PageID #:75 involves disputes over documents submitted (or not submitted to the USPTO during patent prosecution. For these reasons, and as set forth more fully below, the government respectfully requests that it be permitted to intervene in the instant action. Background On February 29, 2012, John Wiley & Sons, Ltd. and American Institute of Physics (together, plaintiffs filed the instant complaint against the law firm McDonnell Boehnen Hulbert & Berghoff LLP and John Doe Nos. 1-10, partners, associates and other employees of the firm (collectively, defendants. The plaintiffs claim copyright infringement under 17 U.S.C. 101 et seq., arising from the alleged unauthorized copying and/or distribution of the plaintiffs copyrighted works in connection with the defendants patent prosecution practices, including submissions to the USPTO. The defendant law firm files and prosecutes United States patent applications on behalf of its clients. In order to comply with USPTO regulations and to promote efficient, effective patent review, patent applicants are required to disclose to the USPTO information material to the patentability of their inventions. See 37 C.F.R (requiring applicants to submit all known information material to patentability ; 37 C.F.R (specifically requiring submission of [a] legible copy of... [e]ach publication or that portion which caused it to be listed on the applicant s information disclosure statement. This mandatory disclosure includes submission to the USPTO of copies of prior art materials in the form of published articles (i.e., NPL. NPL provides invaluable guidance to the USPTO and the public as to whether an invention is in fact patentable. It is vital to the patent examination process that the examiners and the public have all available evidence related to patentability, including relevant copyrighted 3

23 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 4 of 16 PageID #:76 articles. One critical use of NPL is to determine whether the invention already is in the public domain and thus not patentable. The plaintiffs publish scientific, technical, and medical journals, consisting primarily of peer-reviewed articles, and either own or exclusively license the copyrights to these articles. They assert that in connection with researching, filing, and prosecuting certain patent applications, the defendants made and/or distributed to the [USPTO], and perhaps others, unauthorized copies of copyrighted articles from plaintiffs journals. Compl. 14. The plaintiffs assert that the defendants made copies of the plaintiffs copyrighted works and included or cited them in their patent applications, and also made copies of copyrighted works that the defendants considered in connection with the applications, but did not ultimately cite or provide to the USPTO. Compl. 15. In sum, the plaintiffs allege that the defendants infringed upon the plaintiffs copyrights by making unauthorized copies of copyrighted works for internal use in the preparation of patent applications and for submittal to the USPTO, and that the defendants made a profit as a result of the infringement. The United States requests intervention to show that certain of the plaintiffs claims are not supportable because the use of copyrighted material in connection with patent applications under the Patent Act constitutes fair use. 1 1 Specifically, as set forth in the attached pleading, the USPTO alleges that the fair use defense applies to the copying of copyrighted NPL and distribution thereof, which copying and/or distribution is necessary and incidental to the filing and prosecution of a U.S. patent application and/or the conduct of other USPTO proceedings concerning or relating to the scope or validity of any issued U.S. Patent, including copies of NPL actually submitted to the USPTO and copies of NPL initially considered but ultimately rejected for inclusion in submissions to the USPTO, by or at the direction of patent applicants, patentees, patent challengers and/or their representatives, such as defendant McDonnell. See, e.g., First Proposed Defense. 4

24 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 5 of 16 PageID #:77 Statement of Interest The government seeks to intervene in this action on behalf of the USPTO. The USPTO has a paramount interest in ensuring that patent applicants can and do disclose the documents necessary to determine whether a proposed patent should be granted. This Court s ultimate decisions regarding the transactions at issue in this suit the copying of copyrighted articles for the purpose of patent research and examination before the USPTO may have far-reaching effects on the USPTO s patent operations and its ability to carry out its statutory mandate. If the plaintiffs obtain the relief they seek, would likely have a significant negative impact on the USPTO s ability to effectively and efficiently carry out its mission and its obligations as imposed by Congress. Argument First, the USPTO can intervene as a matter of right under Rule 24(a(2 based on its critical interest in the subject matter of the case and the impediment to protecting that interest if denied the right to intervene. The plaintiffs requested relief would significantly impair the USPTO s ability to carry out its core statutory functions. Second, the United States has an independent basis for permissive intervention under Rule 24(b(2(A and/or (B because the USPTO is a government agency that (1 advises the President and the entire Executive Branch on intellectual property matters, including the Copyright Act, which is the basis for the plaintiffs claim, and (2 administers the Patent Act and regulations thereunder (37 C.F.R and 1.98, which are inextricably intertwined in the plaintiffs claims and part of the defendants anticipated defense. And finally, the United States has an additional basis for permissive intervention under Rule 24(b(1(B because the United States has a claim or defense that shares with the main action a common question of law or fact. 5

25 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 6 of 16 PageID #:78 I. The USPTO Has A Right To Intervene Under Rule 24(a. Federal Rule of Civil Procedure 24(a(2 reads: (a Intervention of Right. On timely motion, the court must permit anyone to intervene who: * * * (2 claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant s ability to protect its interest, unless existing parties adequately represent that interest. The Seventh Circuit has held that to have a right to intervene under Rule 24(a(2, a party must (1 make timely application, (2 have an interest relating to the subject matter of the action, (3 be at risk that that interest will be impaired, as a practical matter, by the action s disposition and (4 lack adequate representation of the interest by the existing parties. See, e.g., Nissei Sangyo Am., Ltd. v. United States, 31 F.3d 435, 438 (7th Cir (citation omitted. In addition, Rule 24 should be liberally construed in favor of potential intervenors. See iwork Software, LLC v. Corporate Express, Inc., 2003 WL , at *1 (N.D. Ill. Nov. 4, The United States request to intervene meets each of these criteria as discussed below. A. This Application Is Timely. The United States motion and proposed pleading are timely filed. The timeliness requirement of an intervention of right does not impose a precise time limit, but instead is based on a reasonableness test. See Nissei, 31 F.3d at 438. Factors to be considered are the potential intervenors diligence in learning of the suit and any prejudice to the parties caused by any delay. See People Who Care v. Rockford Bd. Of Educ., 68 F.3d 172, 175 (7th Cir. 1995; see also Nissei, 31 F.3d at 438 (prejudice inquiry is not whether the case will be more difficult for 6

26 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 7 of 16 PageID #:79 the defendant to defend on the merits, but whether the delay itself causes prejudice sufficient to justify denying the right of an intervening party to litigate their claim. The United States learned of this action shortly after the plaintiffs filed their complaint on February 29, 2012 and swiftly moved to file its motion and proposed pleading very early on in the litigation process. The docket indicates that no discovery or preliminary scheduling has taken place. For these reasons, there is no risk of timing prejudice to the plaintiffs. See Nissei, 31 F.3d at 439 (intervention timely where intervenor filed motion three months after learning of suit; Clorox Co. v. S.C. Johnson & Son, Inc., 627 F. Supp. 2d 954, 961 (E.D. Wis (intervention timely where motion to intervene was filed just over a month after suit commenced and was the first substantive issue before the court. Thus, this motion is timely. B. The USPTO Has an Interest Related to the Transactions. A party seeking to establish a protectable interest for the purpose of intervention must show that it has a direct, significant, and legally protectable interest. See Solid Waste Agency of N. Cook Cnty. v. U.S. Army Corps of Engineers, 101 F.3d 503, 506 (7th Cir The USPTO has a substantial interest in the transactions that are the subject of this action: the copying and submission to the USPTO of copyrighted materials that occurs in connection with the routine researching, filing, and prosecuting of patent applications under patent statutes. A person preparing and submitting a patent application must identify and disclose all known information that will assist a patent examiner in determining whether to grant a patent. See 37 C.F.R This information is critical to the patent examination function; often, the examiner relies on this information in determining that the claimed invention fails to meet the statutory requirements and is thus not patentable, or that the patent claims must be narrowed in order for a patent to issue. Conversely, in cases where the examiner determines that the invention is patentable in 7

27 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 8 of 16 PageID #:80 spite of the submitted information, the fact that the examiner considered the information in granting the patent frequently plays an important role in subsequent litigation or reexamination proceedings that challenge the validity of the patent. While the USPTO is expressly interested in the defendants specific transactions, its interests extend much more broadly in scope. The USPTO seeks to provide a fair and expedient examination process to all parties involved in the patent application process, including the inventors, their agents, and their attorneys, and including the defendants in this case. Because a ruling holding these defendants liable for copyright infringement could become a precedent for other patent applicants, the USPTO has a strong interest in supporting the defendants position in this case. Further, the USPTO also has a stake in this action because the requested relief could lead to claims against it for merely carrying out the dictates of patent statutes. While the USPTO asserts that certain specific 2 uses, copying, and distribution of copyrighted materials for purposes of patent prosecution by the defendants constitutes fair use under the Copyright Act, 17 U.S.C. 107 (see attached Answer, Defense and Counterclaim, the plaintiffs assert the opposite. The United States proposes to assert a counterclaim for declaratory judgment against the defendants a form of relief available only to parties. As such, it is imperative that the United States be permitted to intervene to protect the USPTO s interest with respect to its own actions, as well as third-party actions taken in compliance with USPTO regulations. C. Disposition of This Matter May Impair or Impede the USPTO s Ability to Protect Its Interest. Disposition of this matter has the potential to severely impede the USPTO s ability to carry out its core statutory mission the review and approval of patent applications. The 2 See, e.g. United States Proposed First Defense. 8

28 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 9 of 16 PageID #:81 existence of an impairment under Rule 24(a depends on whether a ruling would foreclose the intervenor s rights in subsequent proceedings, as measured by the general standards of stare decisis. See Zurich Capital Mkts. Inc. v. Coglianese, 236 F.R.D. 379, 386 (N.D. Ill If this Court were to hold that the defendants committed copyright infringement by submitting copyrighted documents to the USPTO for the purpose of review in connection with patent applications, the ruling could broadly affect countless pending and future applications and handcuff the USPTO s ability to request and receive relevant NPL as required by statute. Such a ruling could impose burdensome transaction costs that would likely impose considerable delays and costs on patent prosecution at a time when Congress, through the America Invents Act of 2011, is encouraging increased American invention and calling on the USPTO to reduce the backlog of patent applications. Such a ruling would also significantly impair the ability of the USPTO to enforce the requirement under the Patent Act that applicants to submit vital nonpatent literature with their applications. A ruling in favor of the plaintiffs could result in applicants simply not submitting certain required information in connection with their patent applications. If an applicant declines to submit all of the materials necessary and required for a patent examiner to conduct a complete and informed review of the proposed patent, it seriously impairs the patent examiner s ability to accurately determine whether a patent should be granted. As a result, patent quality would suffer, patent pendency rates would increase (because examiners would be less-equipped to evaluate applications and encounter more barriers to decision making, and the USPTO s ability to fulfill its statutory role as an engine of innovation and economic growth would be compromised. Such a ruling likely would also drive up the costs and risks of subsequent patent 9

29 Case: 1:12-cv Document #: 23 Filed: 06/12/12 Page 10 of 16 PageID #:82 litigation, which often involves questions about a patent applicant s decision not to submit allegedly material information, including NPL, to the USPTO. D. The USPTO s Interest Is Not Adequately Represented by the Existing Parties. The existing defendants to this action cannot be expected to adequately represent the USPTO s interest. As indicated above, the USPTO s interest extends far beyond the particular transactions here. Because of the broad scope of the government s interest, it is conceivable that there could be a divergence in litigation or settlement strategies. For example, the USPTO would not settle the narrow case at the expense of the national patent system. If not admitted as an intervenor, the USPTO s significant interest in the subject matter of this action will not be represented. 24(a(2. For all these reasons, the USPTO should be permitted to intervene as of right under Rule II. The USPTO Should Be Allowed Permissive Intervention Under Rule 24(b(2 as a Government Agency. The United States also has a right to permissively intervene under Rule 24(b(2. See Bible Way Church of Our Lord Jesus Christ World Wide, Inc. v. Showell, 260 F.R.D. 1, 4 (D.D.C (church could intervene both as of right and permissively in trademark action against the officers of the intervenor church, where the church s counterclaims were identical to those raised by officers and intervention would promote judicial efficiency and consistency. Rule 24(b(2 states as follows: (b Permissive Intervention. * * * 10