October 2, 2018 February 11, 2019 James M. Smedley, Esq.
Companies and Inventors from Singapore can leverage programs at the United States Patent and Trademark Office (USPTO) to substantially accelerate the process of obtaining of a patent in Singapore, all while reducing the overall cost to create a global patent portfolio.
It may come as no surprise that Singapore ranked as one of the most innovative countries in the world. Singapore ranked #3 in the most recent 2018 Bloomberg Innovation Index. Singapore also ranked #3 in the World Economic Forum’s Global Competitiveness Report 2017-2018, and #5 in the International Property Rights Index.
Specific areas of technology that Singapore may be known best for pushing the boundaries on are: 1) Immersive Media; 2) Artificial Intelligence (AI) and Data Science; 3) Cybersecurity; and 4) Internet of Things (IoT) and future communications 1. All areas that are of worldwide significance and growth. Given this, the innovations developed in Singapore are of global appeal and warrant analysis of whether international protection of the intellectual property associated with those inventions are advisable.
Given that international protection of intellectual property rights can be costly and take a lot of time to obtain, it is important to consider all ways that the process can be optimized for both time and cost.
Preparing and filing a patent in almost any jurisdiction is not an inexpensive endeavor. An inventor can expect to spend around S$10,000-20,000 in professional fees for the drafting of a patent application in Singapore, and filing fees that start around S$1,700. At current exchange rates, that is an estimated $8,500-15,800 USD.
According to the Intellectual Property Office of Singapore (IPOS), the average time to get a patent through until grant is about 2-4 years.
Preparing and filing a patent in the United States is similar in complexity to doing so in Singapore. Drafting expenses may be slightly lower, with estimated professional fees for preparing a patent application averaging about $6,000-10,000 USD (S$8,200-13700) (our firm averages slightly lower drafting fees of around $4,000-$8,000 USD). Standard filing fees are also a bit lower, with a small entity (companies with fewer than 500 employees) having a base filing fee of $785 USD (S$1,077).
The average time on a standard timeline application in the US is about 2-3 years.
Both the USPTO and the IPOS share options for accelerating examination of a patent application. However, only the USPTO offers an easy acceleration process that is based solely on the payment of an additional fee. Called Track I Prioritized Examination, the USPTO provides the ability for applicants to pay a fee ($2,000 for small entities or $1,000 for micro-entities) and receive a first office action in the merits, and final disposition within 1 year.
Done right, the Track I Prioritized Examination procedure at the USPTO gives patent applicants quick and clear insight on patentability of an invention. The accelerated timeline of a Track I Prioritized Examination application also gives patent applicants the ability to have insight on whether foreign filings are worthwhile, will also providing options for accelerating granting of patents in those foreign jurisdiction.
For instance, applicants can leverage the Patent Prosecution Highway (PPH), which is a series of agreements the US has with foreign patent offices, such as Singapore, whereby when a first patent office (e.g., USPTO) allows a patent application, the second patent office (e.g., Singapore) will, upon submission of a request, accelerate the examination of the patent in the second office.
I have written a blog post about this separately elsewhere.
While the Track I prioritized examination of US applications is available for applications in any industry, IPOS does offer an option for inventions that are in the FinTech space that may be even more advantageous. A new program launched in 2018 at IPOS, called the FinTech Fast Track initiative, aims to have the time to grant of such FinTech patent applications in as little as 6 months.
So, if your invention is in the FinTech space, you may still be best served by filing in Singapore. However, if your invention is in any other technological field, the Track I Prioritized Examination application at the USPTO may offer additional benefits over filing directly in Singapore.
Before filing directly in the USPTO, those applicants that are Singapore residents till must contact Singapore (IPOS) for national security clearance to file an application abroad before filing an application in Singapore. Luckily, this is not a complex process and usually only takes a few days to a week or so prior to getting the appropriate clearances.
There are several options to accelerate receiving of a patent in the USPTO that should be quite interesting to Singapore companies and residents. From reduced costs, to quicker allowances, and allowances that can accelerate issuance in Singapore as well as numerous other foreign countries.
With all the options available, it may be time to look at you or your company’s IP practices and identify whether some of these options may work to increase the value of your IP, while simultaneously reducing the cost to protect it.
August 17, 2018 August 17, 2018 James M. Smedley, Esq.
Global patent filing using conventional procedures entails significant costs. Optimizing the use of Track I in an enterprise’s patent filing processes may provide an overlooked strategy to help drive down the cost of foreign prosecution and accelerate issuance of a global patent portfolio.
When going global with patent filings, Applicants often follow the same route. They begin with either a provisional or nonprovisional application in the U.S. or another jurisdiction, such as wherethe Applicant is located or where its R&D takes place. If the covered invention warrants global filing, Applicants often pay to file an international application under the Patent Cooperation Treaty (PCT) at 12 months from the earliest priority filing. Perhaps, with luck, they will receive a first action on the merits during the second year of the first application’s pendency. If an Applicant filed the first application with the U.S. Patent & Trademark Office (USPTO), the examining art unit’s backlog typically determines the wait until examination starts.
By the time the 30/31 month due date under the PCT arrive, an Applicant may still be engaged in prosecution of the original application and may not have a clear view of patentable subject matter. Depending on the art unit, or if the Applicant first filed a provisional utility patent application at the USPTO, the original application may not haven even received a first action on the merits prior to the national filing deadlines under the PCT.
Accordingly, Applicants may find themselves in the situation of making national stage filing decisions without having a clear picture of their odds of success in obtaining valuable patent scope for a given invention. Depending on the number of countries an Applicant wishes to file in, an Applicants can easily spend $25,000 to $100,000 on these national stage filings. This figure is just detailing the filing fees and does not include costs for prosecution of each application during examination. All this expenditure occurs without really knowing if an Applicant stands a chance of acquiring valuable global intellectual property. If patent prosecution turns sour in the U.S. or elsewhere, or an application collides with unforeseen prior art, then the already-invested resources may simply evaporate into a loss.
Gaining clarity relatively early in the global filing process through use of the Track I Prioritized Examination program at the USPTO, though, can avoid wasting the enterprise’s resources later during worldwide patent prosecution.
As an alternative to the usual flow of global prosecution sketched above, Applicants may consider taking a different tack by maximizing the benefits of the Track I Prioritized Examination program offered by the USPTO.
As a quick background on the Track I Prioritized Examination program, it is basically a Pay-to-Play system for fast tracking the examination of a US Non-Provisional Utility Patent Application. For an additional fee of USD $4,000 on top of usual nonprovisional patent filing fees, patent owners may file a request for prioritized examination with the USPTO, gaining access to Track I benefits. Small entity Applicants will enjoy access to the Track I program for half of that fee ($2,000), while micro-entity discounts bring the Track I fee down to USD $1,000. Given that most universities and other institutions of higher education can take advantage of the micro-entity status, the Track I program becomes a very viable option for those with heavy domestic and foreign patent prosecution programs.
The Track I Prioritized Examination program includes a number of special conditions, but they will typically not amount to an onerous requirement for most Applicants. For example, patent owners may not take extensions, must file no more than 4 independent claims and 30 claims total, and must be sure to pay all fees at application filing.
As long as the Applicant files the paperwork correctly and overall U.S. Track I filings have not exceeded the Office’s quota for the year, the USPTO will usually accept the application for prioritized examination. The Office will then issue a first Office Action within approximately 3-4 months and produce a final disposition, such as a Notice of Allowance or a Final Office Action, within 12 months. The USPTO currently advertises that it actually issues final dispositions much earlier, by about the six-month mark. If the final disposition displeases the filer, the Applicant retains the option to either re-pay the Track I fee to pursue another round of prioritized examination, or revert back to the standard examination timeline by submitting a request for continued examination (RCE).
Applicants may elect to use the Track I Prioritized Examination program for applications in which they expect to attempt global filing based on the anticipated value to the organization of filing in various nations. Although the USPTO offers other techniques for accelerating prosecution, Track I has emerged as the go-to program for prioritized examination.
In contrast to the conventional approach for global filing, a Track I Prioritized Examination application will likely provide a filer with clarity on patentability before the one year deadline for PCT filing. The insight provided by the Track I Prioritized Examination program may make global filing decision-making clearer, and help to ensure that the organization focuses resources on applications that have a significant probability for earning strong protection. For a relatively small up-front additional fee of a few thousand dollars, Applicants may avoid wasting tens of thousands of dollars on applications that may ultimately be doomed by unknown prior art.
As a quick aside, Applicants should also consider checking to see if any inventor on an application is over 65. If at least one inventor is over 65, the USPTO will make an application special and advance it out of turn for relatively quick prosecution. Filing a simple petition asserting an inventor’s age will expedite prosecution. The USPTO charges no fee for acceleration on the basis of age. Patent owners may accordingly also use age-based acceleration to gain earlier clarity on patentability, without a fee. Age-based acceleration, though, will most likely not be as fast as Track I Prioritized Examination.
In addition to the advantage of gaining the earlier clarity highlighted above, Applicants may also leverage other foreign filing programs available through the USPTO in conjunction with the Track I prioritized examination program. For example, the USPTO has a number of Patent Prosecution Highway (PPH) agreements with other patent offices worldwide in which subject matter deemed patentable by one office may be allowed with little or limited additional examination. The USPTO participates in such PPH programs with counterpart offices in Europe, Japan, Korea, China, Russia, Australia, and other jurisdictions. Although procedures vary based on the nations involved, the basic process usually involves filing an indication of allowable subject matter from a first patent office with a second patent office patent filing, along with a petition to participate in a given PPH program. The patent owner may thereby request limited or streamlined examination to issue a patent in the second nation based on the allowance in the first nation.
Turning back to Track I Prioritized Examination program, if an Applicant receives a Notice of Allowance or other indication of allowable subject matter relatively quickly, the owner may then parlay that allowance into accelerated allowances in other nations based on using various available PPH programs. This not only accelerates the granting of the foreign patents, but also reduces the overall cost of foreign prosecution, as fewer office action responses are required in each jurisdiction. The cost savings can be massive, particularly when the Applicant is entering a large number of foreign jurisdictions.
In practice, PPH programs work with varying degrees of success based on the nations involved. For example, commentators have noted that using PPH to turn USPTO allowances into patents at the European Patent Office (EPO) may tend to hit headwinds, with the EPO essentially fully examining a given application notwithstanding a U.S. allowance. However, using Track I allowances as a springboard to obtain accelerated allowances in other nations remains, in general, a viable option for quickly driving a global patent family to issue. Further, if an EPO patent is part of the strategy for a given application, an Applicant’s US based patent attorneys or agents can draft and prosecute the claims of the US application with that in mind, in order to keep claims that will eventually be allowed in the US patent more similar to those that the EPO would typically grant. This is something an Applicant would want to address early on with their counsel, so that the strategy is in place during the examination of the Track I application.
For slightly higher initial filing fees in the USPTO, an Applicant may leverage prioritized examination under the Track I Prioritized Examination program to gain clarity on patentability of a patent application intended for international filing. Patent owners may thereby avoid expending resources on global prosecution of applications that perform poorly during Track I prosecution. Owners may accordingly use Track I to inform decision-making to optimize the probability of success for global patent acquisition. Applicants may also combine the benefits of Track I with Patent Prosecution Highway programs, leveraging Track I prioritization to accelerate prosecution globally and significantly reduce the overall cost of foreign prosecution.
James M. Smedley, Esq. & Steve Keefe, Esq.
Steve is an attorney in the firm’s Intellectual Property law group. Steve has extensive experience in patent prosecution and corporate transactions. Steve’s career has given him experience both in the law firm setting as well as time spent as in house counsel. Steve’s experience with both national and international IP matters is extensive.
June 19, 2018 March 21, 2019 James M. Smedley, Esq.
If you are a developer, tech startup or otherwise considered trying to protect your amazing new idea or technology based in software, you probably have already looked into patents as a potential to secure those technologies. (I highlight idea, as we will come back to that very salient point in a minute). Probably one of the first things you run across is everyone talking about Alice!
Let us be clear, software is patentable, when done correctly. Even things that are simple processes are still protectable. For instance, Sony Interactive Entertainment, Inc. just received a patent for “DISPLAY OF TEXT INFORMATION ON A HEAD-MOUNTED DISPLAY” on May 29, 2018 (See US Patent 9,984,905), and Zynga recently got a patent for providing in game tutorials for players via a “Show Me” button on May 8, 2018 (See (US Patent No. 9,962,612).
It is important to note that a utility patent covers the functionality of the software, through defining the software in terms of systems and methods. What patents do not cover is the actual code. Source code is covered largely by copyright, which can protect direct copying of the code, but not those who write their own code to do the same thing. And that is exactly where patents step in.
If you are forming the next great startup and you want to be the “Uber for X” or the “Tinder for Y”, that is not, in and of itself, going to get you cross the finish line for patent eligibility. Remember, software patents are directed to covering systems and methods. Software almost always is nothing more than a series of steps (i.e., instructions) that drive a computer to take some action (e.g., process data). Some data goes in, software directs the computer as to what to do with that data, and the output is some generally useful result. Whether it is finding the closest Uber, matching you to your next soulmate, adding two numbers together, or calculating the trajectory of a rocket for sending a payload into space, it all boils down to some data going in, being processed, and a result being output.
For instance, restrictive words, like, “only”, “must”, “always”, and “never” may limit the scope of an invention. If in an application, the disclosure states, “The system always does X before Y”, then you have been committed to a system that either always does X before Y, or never does Y (if you don’t do X, you cannot do Y). These kinds of limitations can poke holes in the breadth of an application, particularly when related to software, where there are frequently dozens if not hundreds of other ways to accomplish a task. Think to yourself when drafting or reviewing an application whether the statements you are making are really requirements, or just simply one way you have chosen to implement the solution.
The good news is that the examiners have now been put to task on these rejections. Per a recent memo from the Deputy Commissioner for Patent Examination Policy at the USPTO addressing all patent examiners, the examiners are now required to give specific rationale for findings that specific elements of the claims are well-understood, routine and conventional in the art. The avenues for them to do this are: i) point to the specification of the present application where the applicant makes express statements about the element being well-understood, routine and conventional (note: silence is not to be construed as having made any such statement); ii) point to previous court rulings that address specific claim elements in the present application; iii) provide reference(s) that show that the claim element is well-understood, routine and conventional in the art; or (iv) take official notice.
Further, the memo notes that when an examiner chooses to take official notice, that the examiner be “certain, based on upon his or her personal knowledge, that additional element(s) represent well-understood, routine, or conventional activity engaged in by those in the relevant art, in that the additional elements are widely prevalent or in common use in the relevant field, comparable to the types of activity or elements that are so well-known that they do not need to be described in detail in a patent application to satisfy 35 U.S.C. § 112(a).” However, the memo then states that if challenged on this by the applicant, the examiner must provide items under (i)-(ii) above.
Software system and methods are still very much patentable in 2018, even in light of Alice. However, it is important to consciously and conspicuously focus on what is it you are trying to protect, and what you say in your disclosures to the USPTO. Done right, the pathway to obtaining a patent on a software system and method can be paved with a smooth and straightforward surface. Follow the rules, watch what you write, include everything, and you are on your way.
May 15, 2018 April 2, 2019 James M. Smedley, Esq.
As a preface, I am a gamer. Since playing text based games at the age of 6 on a TRS-80 (Pyramid 2000), to ESO and Fortnite today, video games have always been a part of my life.
Fifteen years ago, video games were considered obscure things nerds would play in small groups and LAN parties, or perhaps a place to play a game of Madden with your friends. These days, video games are a massive cultural aspect, with the video game industry accounting for over $100 billion dollars in revenue a year.
In fact, these days video games like Fortnite have crossovers with massive media hits, like Avengers: Infinity War. It is clear, video games are a cornerstone of our media and entertainment culture.
But as anyone who has ever played a game on the mobile device knows, there is never just one title in any genre. For every PUBG, there will be a Fortnite. For every Candy Crush, there will be a dozen tile matching games (or 17).
But why are there so many copycats and how do you protect your game from copycats?
When thinking about protecting a video game, the law turns almost exclusively to intellectual property (IP) rights.
Each of these various prongs are directed to a different potion of the actual construct of a video game.
There are two separate types of patents – design patents and utility patents. Design and utility patents protect two very distinct portions of a video game.
First, design patents may be applied for to protect the UX/UI (User Experience / User Interface) of a game. For instance, if you have a novel layout that is ornamental in nature, you can protect the ornamental appearance of the design.
US Design Pat. No. D780776 – King Com Ltd.
However, these design patents truly only cover the single ornamental design. So if a competitor changes your cute little fruit to cute little gems, the design patent will not be sufficient to protect your game design.
One advantage of design patents is that they can be obtained quickly, relative to utility patents.
Utility patents cover the novel aspects of the actual game, such as game mechanics. A utility patent can cover anything from gameplay mechanics and methodology, to user interface functionality, to how data is received and processed by the underlying computer systems. Truly, anything that is utilitarian, can potentially be covered by a utility patent.
There are of course limitations, especially when it comes to video games. First is that for an aspect of the game to be protectable, it must be patent eligible subject matter, and in the case of video games, this means the claimed inventive aspects of the video game must be more than an abstract idea.
While there are a lot of considerations to think about as to whether a utility patent is right for you in protecting your video game, it is definitely still something to consider, and something that large companies are doing, even on the most nuanced portions of their games.
For instance, Zynga Inc., just received a patent on an aspect of their Frontierville (The Pioneer Trail) game. Namely, using a “Show Me” button in a game to identify to users how to perform tasks in a game that may not be easily apparent until detailed to the user. (US Patent No. 9,962,612, granted May 8, 2018). Similarly, Nintendo just received a patent on an aspect of matching players that are close in proximity to one another for providing the ability to share user information with one another. (US Patent No. 9,967,737, granted May 8, 2018). As you can see, if it has functionality, or relates to game mechanics, it could potentially be patented.
There are significant considerations to be made with respect to filing a patent. But we will save those for a series of separate articles, as the actual process of drafting, filing and prosecuting a patent can be quite complex.
One additional benefit of having a patent is that since it covers the mechanics of a game, it is likely to cover other games that copy or lift from your game design. Further, patents may also be licensed or assigned to others, providing additional streams of revenue, value and capital to your company.
Copyrights cover the actual expression of the video game. Copyrights can cover your artwork, the source code, the plot lines, the video cutscenes, the audio elements, and more. If it is an audio, visual or textual work, it most likely may be copyrighted. Again, there are limitations, but assuming there is a level of creativity and originality involved, it may be protectable.
The main limitation on copyrights is that they generally only cover the actual expression, not the ideas or concepts behind the expression. While there are several examples throughout the years, there are two relatively recent cases that we can look at to drive the point home about what is and is not protected via copyright.
The first is Tetris Holdings LLC v. Xio Interactive Inc., 863 F. Supp. 2d 394, 410 (D.N.J. 2012), which involves the venerable classic Tetris, versus a virtual clone, “Mino”. Below is an image of the two games side by side.
It is not hard to see the similarities, because Xio’s intent was to copy the game mechanics and gameplay of Tetris. As noted before, these are aspects of a game that are not protectable by copyright. However, the court found that Mimo went beyond just copying the game mechanics, but copied the actual expression. The court even pointed to other examples of how one could create a legal clone without running afoul of copying the expression, noting in particular Nintendo’s Dr. Mario. So here, if you are truly copying not just the game mechanics, but the overall look and feel, you may be running afoul of copyright laws.
US Patent 5,265,888 – Dr. Mario Patent!
But what if your game is nothing more than a copy of the game mechanics, with no similar appearances? Well, we can look to our second case, DaVinci Editrice S.R.L. v. Ziko Games LLC, 183 F. Supp. 3d. 820 (S.D. Tex. 2016), for the answer. In this case, DaVinci Editrice, maker of the popular card game, “Bang!”, accused Ziko Games of distributing a game, “Legends of the Three Kingdoms” (“LotTK”), that infringed DaVinci’s copyrights.
In this case, the appearances were completely different. Bang! Was a game situated in the wild west, while LotTK was set in ancient China. The cards looked different. The artwork was dissimilar. Visually, the similarity ended at the fact that they were both card games. Instead, DaVinci argued that LotTK copied the characters of Bang!. Bang! had a Sheriff, Deputy, Outlaw and Renegade that had the exact same functionality as LotTK’s Monarch, Minister, Rebel and Turncoat.
However, the court found that this amounted to nothing more than copying of game mechanics, which are not subject to copyright protection. Notably, the court found that these mechanics are dissimilar to book or movie plot, which would be protectable.
So, when it comes to copyright protection, it is truly the expression that matters.
Trademarks protect the branding of a game. Trademarks can truly extend to anything that evokes in the consumer the origin of a good or service. It is not just the game name, studio name, or logos, which are what most people commonly think of when they think of trademarks. Trademarks can also extend to color (e.g., Tiffany & Co. have a registration for their robin’s egg blue boxes with white ribbons), sound (e.g., NBC has a registration for the three note “NBC Chimes” – you probably just heard it in your head) and even scents (e.g., Hasbro registered the smell of PLAY-DOH).
In the video game world, you can protect identifiers like the game name, studio name, taglines, and logos. But you can go further, like Microsoft did for HALO’s Master Chief, and trademark certain names and other aspects, to the extent that they identify the source of the product or service.
One main consideration with trademarks is that they cannot be generic or merely descriptive of the underlying goods or services. You could not get a trademark on the term “First Person Shooter” as that is merely a generic term for a type of game. Examples of merely descriptive marks may be something along the lines of “Goat Simulator”. This is actually a good example in that, while you can never get a registration on a mark that is generic, you CAN actually get a registration on a mark that is descriptive IF that mark develops “Secondary Meaning.” Secondary meaning is when the consuming public comes to know the descriptive mark as an origin of goods or services. Goat Simulator may have been descriptive of the game at first (i.e. a game that simulates the life of a goat, quite questionably I may add), but with hundreds of thousands of downloads under its belt, it likely has become a name that most people recognize.
Marks that are suggestive, arbitrary or fanciful are able to be protected without any evidence of secondary meaning, and may be registered immediately, assuming the mark is in use. That is, assuming it is not confusingly similar to another mark in use.
Trade secrets are the secret sauces kept under lock and key. These are things like the recipe for Coca-Cola or the KFC’s 11 Herbs and Spices, at least until they were revealed. Which is the crux of trade secrets. They are only trade secrets for so long as they remain a secret. Here, the real priority is ensuring that you properly keep access to these trade secrets as limited as possible. Once out of the bag, there is nothing you can do to put them back in the bag.
For trade secrets, developing policies around access, maintenance and security of the information is crucial. Sure, you may be able to sue the employee or company who stole your trade secrets, but after that, it is in the public domain for good.
There are numerous aspects of intellectual property that apply to video games. It is important to come up with a plan to protect those rights, and determine what bag of rights you would like to protect and how to protect them. Coming up with a strategy that works for your game is crucial, and timing can be very important, as each of the various types of intellectual property has ramifications for not taking action by a certain time. Speaking with counsel about creating and implementing the strategy should be part of any game development process.
May 2, 2018 June 19, 2018 James M. Smedley, Esq.
On April 26th, the USPTO released a memo stating that, in light of the United States Supreme Court decision in SAS Institute Inc. v. Iancu, 2018 WL 1914661, (U.S. Apr. 24, 2018), when the PTAB initiates a trial, it will do so on all challenges raised in the petition.
The former approach taken by the PTAB allowed for the panel to initiate trial on a subset of all of the challenges submitted by a petitioner.
This memo is quick on the heels of the ruling in SAS, which came just two days earlier.
This ruling goes hand in hand along with the Supreme Court’s ruling in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, which held that inter partes review of patents are valid and do not violate Article III of the US Constitution or the 7th Amendment. It is also interesting to note that both were decided on the same day (April 24, 2018).
On one hand, we have resolution and clarity on the validity of the inter partes review process, and that petitions will be heard in their entirety or not at all. On the other hand, what we do not know is how this will alter the decisions made by the PTAB.
For instance, previously, when the PTAB had the ability to select which challenges in a petition it would hear, the PTAB would offer quite comprehensive explanations for the decisions it makes. It is unclear as to whether the PTAB will be able to keep to the same time schedule that it has with these trials, and still offer the same comprehensive explanations it currently does, now that the panel must hear all challenges raised in the petition. The flip side to this is it may also result in the PTAB accepting fewer challenges, since it simply does not have the capacity to provide detailed findings for the broader challenges it now must hear. Alternatively, the PTAB may simply start offering more limited explanations for its findings.
Further, there is a question as to how this will impact patent infringement litigation matters in courts where certain judges refuse to stay trials where an ongoing inter partes review is being conducted on less than the entirety of the granted claims. Since now that inter partes review approved by the PTAB will be taking the all or nothing approach, it is possible judges may take this into consideration when reviewing a possible stay in these litigation matters.
While we look forward to what comes next, the one thing we do know is that inter partes reviews are here to stay. For parties being threatened by patents they feel are invalid, this is good news. Inter partes review provides these parties the option to challenge bad patents in a forum that is much more efficient and cost effective than the US court system.
April 30, 2018 August 17, 2018 James M. Smedley, Esq.
On Thursday, April 19, 2018, the United States Patent and Trademark Office (USPTO) issued a memo addressing changes in subject matter eligibility reviews under 35 U.S.C. § 101 in light of the recent federal appeals court (CAFC) ruling in Berkheimer v. HP, Inc.
This is the latest in what appears to be a steady series of updates from the USPTO on guidance for both examiners and practitioners alike.
Without focusing too much on the findings of the court in Berkheimer v. HP, Inc., 881 f.3d1360 (Fed Cir. 2018), there were several important takeaways from that ruling that are important to note with respect to the present memo from the USPTO and for applicants preparing or having patent applications prepared for them.
Second, the CAFC noted that the specification of the patent in question expressly supports the improvements and functionality the claimed invention provides over the prior art. These improvements were called into question by HP, and the lower court agreed with HP. However, the CAFC noted that “there is at least a genuine issue of material fact in light of the specification,” and that summary judgment is inappropriate with respect to the claims in question.
The USPTO memo acknowledges that the ruling in Berkheimer v. HP, Inc. is specifically applicable and relevant to current patent examination practices and procedures, specifically related to subject matter rejections under 35 U.S.C. § 101, in light of previous findings in Alice Corp. v. CLS Bank International and Mayo Collaborative Servs. v. Prometheus Labs., Inc. (which have been so thoroughly discussed that we will assume for the purpose of this post that most are aware of the outcome and impact of those rulings).
Most importantly, the memo addresses exactly how examination procedure will change in light of the ruling in Berkheimer v. HP, inc. Specifically, examiners now are now expressly encouraged to provide specific examples when claiming that a specific element of a claim is well-understood, routine and conventional in the art. The avenues for them to do this are: i) point to the specification of the present application where the applicant makes express statements about the element being well-understood, routine and conventional (note: silence is not to be construed as having made any such statement); ii) point to previous court rulings that address specific claim elements in the present application; iii) provide reference(s) that show that the claim element is well-understood, routine and conventional in the art; or (iv) take official notice.
What the USPTO Memo indicates is that for a rejection under 35 U.S.C. § 101 to be applicable to an element of a claim that an examiner believes is well-understood, routine and conventional in the art, there must be more than a mere statement by the examiner. The memo does a great job of putting examiners to task with respect to overly broad and under supported 35 U.S.C. § 101 rejections. One of the best aspects of this is requiring an examiner to go back to the drawing board and either withdraw or issue a new 35 U.S.C. § 101 rejection if they rely solely on the “official notice” prong of the analysis.
Further, with the memo expressly making reference to the fact that simply because an examiner can find a single reference of an element in piece of prior art, does not by itself make that element well-understood, routine and conventional in the art, the USPTO is helping to push the distinction between subject matter rejections under 35 U.S.C. § 101 and rejections based on prior art under 35 U.S.C. §§ 102-103.
While the memo is less than a few weeks old at the time of this publication, it does appear that the memo is intended to put examiners to task with respect to conclusory statements made for rejections under 35 U.S.C. § 101. In practice, we will see if this is the case as the next set of office actions roll out.
One last thing to consider, for both applicants and practitioners, is the note by the CAFC that the factual analysis of whether an element of a claim is well-understood, routine and conventional in the art will turn to the specification of the patent itself. In the decision, it was noted that since the specification stated that the claimed elements were improvements over the prior art, it became a factual dispute as to whether the element was actually well-understood, routine and conventional in the art. The CAFC and the memo noted this works both ways, that not only do statements of how the art is improved are read from the specification, but also statements about what is well-understood, routine and conventional in the art. So as both a cautionary and advisory tale, remember to watch what you say in your patent specifications, as they can and will be used against you in a court of law!
Additional guidance from the USPTO on subject matter eligibility analysis under 35 U.S.C. § 101 is always welcome. Even better, the memo hints at further changes to come. As subject matter eligibility has always been a moving target, any clarity is always a boon to applicants and practitioners alike. It is also good to see that the USPTO is implementing safeguards that provide express pathways for applicants to challenge lazy or under developed rejections from examiners. All-in-all, this is good news for those seeking patents in the technological fields, such as software and biotech.


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Article 37(a) states that no one may attempt to coerce or influence the action of any convening, approving, or reviewing authority with respect to his judicial acts.
R.C.M. 306 says that each commander has discretion to dispose of offenses, and that a superior commander may not limit the discretion of a subordinate commander to act on cases over which authority has not been withheld.
The key to these problems is to recognize that if the superior commander disagrees with how the subordinate commander is disposing of the case, the superior commander should withhold that case to his or herself rather than trying to get the subordinate commander to change his or her mind. This may cause some logistical problems but that is the cost of preventing UCI.
United States v. Martinez, 42 M.J. 327 (C.A.A.F. 1995). The UCI occurred after the GCMCA has referred the case, so no impact on the accusatorial process.
United States v. Rivera, 45 C.M.R. 582, 583 (A.C.M.R. 1972). It was improper for a battalion commander to return a request for Article 15 to company commander with comment, “Returned for consideration for action under Special Court-Martial with Bad Conduct Discharge.” The court noted that “The fine line between lawful command guidance and unlawful command control is determined by whether the subordinate commander, though he may give consideration to the policies and wishes of his superior, fully understands and believes that he has a realistic choice to accept or reject them.” Here, the court found that the company commander did not and so reversed the case.
United States v. Griffin, 41 M.J. 607 (A. Ct. Crim. App. 1994). The division commander issued a five-page policy letter on physical fitness and physical training addressed other fitness considerations such as weight, smoking, drinking and drugs, and which said: “There is no place in our Army for illegal drugs or for those who use them. This message should be transmitted clearly to our soldiers, and we must work hard to ensure that we identify drug users through random urinalysis and health and welfare inspections.” The SJA took action when he learned about the letter and had the CG issue a new letter without the offensive language. The defense counsel further improved his client’s position by negotiating a waiver of the issue. While there could have theoretically been UCI in the referral process, the issue was waived. See also United States v. Rivers, 49 M.J. 434 (C.A.A.F. 1998) (arose out of the same facts as Griffin).
United States v. Reed, 65 M.J. 487 (C.A.A.F. 2008). In support of an unlawful command influence motion, appellant introduced an email from the convening authority to his subordinates addressing a variety of command management issues and containing a thirty-one page slideshow. One slide contained the following statement: “Senior NCO and Officer misconduct – I am absolutely uncompromising about discipline in the leader ranks.” Some noted examples included: “BAH Fraud, Fraternization, DUI, Curfew violations, Soldier abuse, Sexual misconduct.” The appellant was charged with BAH fraud. The defense also presented evidence that a deputy commander of a subordinate unit addressed a “newcomer’s briefing” with a warning that “BAH fraud is an automatic court- martial here.” Further, the CA contacted the appellant’s rater and senior rater during the preferral process to ensure that the accused got bad remarks on his evaluation. Later, the CA, upon SJA advice, issued a clarifying email. The military judge allowed full litigation on the issue, and the other convening authorities in transmittal chain testified that they had exercised independent judgment, and the military judge allowed extensive voir dire of the panel members. CAAF held that the government met its burden of demonstrating beyond a reasonable doubt that the proceedings were not affected by actual unlawful command influence or the appearance of unlawful command influence.
United States v. Gerlich, 45 M.J. 309 (C.A.A.F. 1996). After a commander subordinate to the SPCMCA adjudged an Art. 15, the victim went to the IG, when then wrote to GCMCA, who told the SPCMCA that he needed to relook the case because he thought that the Art. 15 would not achieve the GCMCA’s justice goals. He told the SPCMCA to decide whether further action under the UCMJ was warranted. The SPCMCA then directed the lower commander to set aside the Art. 15. Charges were ultimately referred. The SPCMCA eventually testified and said that he used his independent judgment when deciding on the ultimate disposition and changed his mind based on what he learned in the subsequent investigation. CAAF stated, “[W]e have previously recognized the difficulty of a subordinate ascertaining for himself or herself the actual influence a superior as on that subordinate.” Here, the court thought that the SPCMCA considered all of the relevant information prior to being told to relook the case and only changed his mind after receiving a letter from the superior commander that suggested that he change his mind. CAAF found that the government had not met its burden to show no UCI and so reversed the findings.
United States v. Wallace, 39 M.J. 284 (C.M.A. 1994). A company commander imposed Art. 15 punishment on the accused. The battalion commander learned of additional misconduct by the accused and told subordinate commander, “You may want to reconsider the [company grade] Article 15 and consider setting it aside based on additional charges.” The company commander considered the new information, set aside the Article 15, preferred charges and recommended a court- martial. The company commander testified that he felt influenced to reconsider his original decision, but not to come to any certain conclusion after having reconsidered the new information, and that he did not feel any pressure related to making his final decision. CAAF said that these facts did not amount to UCI (note, this is a pre-Biagase case so that analysis was not used). The military judge had fully developed the record and CAAF agreed with the trial judge that the company commander had exercised independent discretion.
United States v. Stirewalt, 60 M.J. 297 (C.A.A.F. 2004). In a conference call with three subordinate officers, the senior officer “very clearly and forcefully made his opinion known” to subordinate that case was too serious for nonjudicial punishment and that article 32(b) investigation was warranted. The military judge also found that the subordinate officer knew that the disposition of the case was his to make. While in a void the conference call would look like UCI, the military judge’s factfinding filled in that void and showed that UCI did not actual occur. In particular, the subordinate commander was the one that initiate the conference call, and that after the conference call, it was clear that the subordinate commander was free to make his own decision.
United States v. Treakle, 18 M.J. 646 (A.C.M.R. 1984). No evidence that the commander’s improper comments had any impact on any subordinate’s decision to swear to charges or recommend a particular disposition of charges.

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There has been little rest for the lawyers engaged in the battle over non-compete clauses and other restrictive covenants allegedly covering Deutsche Bank’s departing discretionary portfolio management team. Last Friday, Justice Marcy Friedman entered a TRO enforcing post-employment restrictive covenants against six departing Deutsche Bank employees, including Benjamin Pace, formerly Deutsche Bank’s chief investment officer for wealth management in the Americas. On Tuesday morning, Pace sought interim vacatur of that TRO (insofar as it applied to him personally) by application to the First Department. Pace’s brief to the First Department (available here) relies principally on the absence of any restrictive covenants from his written employment agreement with Deutsche Bank predecessor, Bankers’ Trust. Pace evidently never signed any agreement directly with Deutsche Bank, and insists that the restrictive covenants contained in Deutsche Bank’s employee handbook are unenforceable because the handbook, by its own terms, does not create a binding contract of employment.
Justice Leland DeGrasse granted Pace’s request for emergency interim relief from the TRO. The order is merely an endorsement on Pace’s application for interim relief and does not set forth any reasoning (or effect any defendant other than Pace himself). The order is here. Justice DeGrasse’s vacatur of the TRO as to Pace seems to accept at least implicitly that covenants in written employment agreements are to be distinguished from those contained in employee handbooks — at least where, as here, the handbook contains disclaimer language to the effect that it does not create a written contract of employment.
This guest post was written by Isaac B. Zaur of Clarick Gueron Reisbaum LLP.
On June 3, 2014, the two most senior departing Deutsche Bank employees, Benjamin Pace and Lawrence Weissman, filed notices of appeal in both actions. The pre-argument statements are available here and here. The principal asserted grounds for reversal are: (1) the absence of any agreement between Deutsche Bank and Pace; and (2) the theory that both were constructively discharged without cause – rendering any restrictive covenants unenforceable.
Also on June 3, HPM moved by order to show cause for expedited document and deposition discovery in anticipation of the scheduled June 24 hearing on the parties’ respective requests for preliminary injunctions. The discovery sought focuses on the relevant employees’ personnel files (and hence the existence or non-existence of applicable covenants in written employment agreements) and Deutsche Bank’s conduct with respect to the investment instruments that Pace and Weissman claim they were being pressured to sell their clients. HPM’s brief in support of its motion for discovery is here.
On June 3, 2014, the First Department issued a decision in Culligan Soft Water Co. v. Clayton Dubilier & Rice LLC, 2014 NY Slip Op. 03955, holding that notwithstanding the internal affairs doctrine, New York law applied to some of the derivative plaintiff’s claims.
[T]he internal affairs doctrine . . . recognizes that only one State should have the authority to regulate a corporation’s internal affairs — matters peculiar to the relationships among or between the corporation and its current officers, directors, and shareholders. Since the internal affairs doctrine does not apply to those defendants who are not current officers, directors, and shareholders of Culligan Ltd., namely, Angelo, Gordon & Co., L.P., Silver Oak Capital, L.L.C., Centerbridge Special Credit Partners, L.P., CCP Credit Acquisition Holdings, L.L.C., CCP Acquisition Holding, L.L.C., and Clayton Dubilier & Rice LLC, Bermuda law does not apply to claims asserted against them.
Nor does the internal affairs doctrine apply to claims based on sections of the Business Corporation Law (BCL) enumerated in BCL §§ 1317 and 1319. BCL § 1319(a)(1) expressly provides that BCL § 626 (shareholders’ derivative action) shall apply to a foreign corporation doing business in New York. Thus, the issue of plaintiffs’ standing to bring a shareholder derivative action is governed by New York law, not Bermuda law. We note that Matter of CPF Acquisition Co. v. CPF Acquisition Co. (255 AD2d 200 [1st Dept 1998]) held that the plaintiff’s standing to sue was governed by Delaware law because Delaware was the State of the corporation’s incorporation. However, there is no indication that the plaintiff in that case raised BCL § 1319.
Pursuant to German-American Coffee Co. v. Diehl (216 NY 57, 62-64 ) and BCL §§ 1319(a)(1), 719(a)(1), and 510, New York law applies to the second cause of action, which alleges that the directors of Culligan Ltd. declared illegal dividends.
To the extent plaintiffs allege violations of BCL § 720 (e.g. waste and unlawful conveyance), which is made applicable to foreign corporations doing business in New York by BCL § 1317(a)(2), those claims are also governed by New York law. However, to the extent plaintiffs allege a violation of a section of the Business Corporation Law not enumerated in BCL § 1317 (e.g. § 717, which is part of plaintiffs’ breach of fiduciary duty claim), New York law does not apply. Those claims are governed by Bermuda law and were thus correctly dismissed.
BCL § 1317 permits plaintiffs to sue Culligan Ltd.’s directors and officers. However, defendant Clayton Dubilier & Rice Fund VI Limited Partnership (CDR Fund VI) is neither a director nor an officer of Culligan Ltd.; it is Culligan Ltd.’s majority shareholder. Hence, there is no basis for applying New York law to the claims against CDR Fund VI. It is undisputed that, under Bermuda law, plaintiffs’ claims against CDR Fund VI, as currently pleaded, were correctly dismissed.
One of the challenges in a derivative action is the proper application of the law of the jurisdiction of incorporation, not New York, to claims under the internal affairs doctrine. As this decision illustrates, however, the internal affairs doctrine might not apply to all claims in an action. Thus, a plaintiff needs to do a claim-by-claim analysis to determine which law applies to which claim.
On May 27, 2014, the First Department issued a decision in Smile Train, Inc. v. Ferris Consulting Corp., 2014 NY Slip Op. 03785, enforcing an agreement term shortening the limitations period to bring a claim relating to the agreement.
An agreement which modifies the Statute of Limitations by specifying a shorter, but reasonable, period within which to commence an action is enforceable provided it is in writing. In addition, it must not be so vague and ambiguous that it is unenforcible. . . . .
We . . . disagree with plaintiff’s contention that [the limitations provision in the parties’ contract] does not apply to its claim for breach of the implied covenant of good faith and fair dealing. It is true that I.C.C. Metals v Municipal Warehouse Co. (50 NY2d 657 ) says that a party may not limit its liability for an intentional tort. However, breach of the implied covenant of good faith and fair dealing is not a tort; rather, it is a contract claim. A claim for breach of the implied covenant of good faith and fair dealing may not be used as a substitute for a nonviable claim of breach of contract. It would be anomalous if plaintiff’s contract claim were subject to a three-month statute of limitations but its claim for breach of the implied covenant were not.
The decision to agree to a shortened limitations period might seem small when an agreement is signed, but transactional counsel should remember that such agreements will be enforced, sometimes with significant consequences.
On May 20, 2014, Justice Sherwood of the New York County Commercial Division issued a decision in Goddard Investors II, LLC v. Goddard Development Partners II, LLC, 2014 NY Slip Op. 31335(U), denying a motion for summary judgment in lieu of complaint based on a guaranty because the plaintiff’s right to payment could not be ascertained from the face of the guaranty.
A claim on an instrument for the payment of money is established by proof of the instrument and a failure to make the payments called for by its terms. Proof of the fulfillment of the condition precedent to the obligation to repay, comes within this limited category of elements of proof which may be established by extrinsic evidence without rendering accelerated treatment unavailable.
The fact that defenses may be asserted against the instrument sued upon does not preclude the use of CPLR § 3213 as long as the right to payment can be ascertained from the face of the document without regard to extrinsic evidence, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document. Determining the amount to be paid under the guaranty by reference to a note or a mortgage to which the Guaranty relates is a de minimis deviation in CPLR § 3213 actions for payment.
An unconditional guaranty is an instrument for the payment of money only. A guaranty is not an instrument for the payment of money only when it is relates to a stock purchase agreement which did not specify a sum certain or a series of purchase orders with separately issued invoices. The same result is reached when the guaranty is conditioned upon creditor refraining from disparaging comments about her former employer, because it requires investigation into whether the condition was respected or not.
The Note [is not] an instrument for the payment of money only because the right to payment cannot be ascertained from the face of the document. Although the Note reads that the GDP promises to pay the principal amount of $500,000 with an annual 8% interest, the payment is expressly conditional on the acquisition and sale of property. This is not the sort of de minimus deviation from the face of document that CPLR 3213 contemplates.
CPLR 3213 is a powerful tool for resolving commercial disputes. As this decision shows, however, its scope is limited.
On May 29, 2014, the First Department issued a decision in Pleiades Publishing, Inc. v. Springer Science + Business Media LLC, 2014 NY Slip Op. 03917, affirming that the plaintiff had stated a claim for breach of the implied covenant of good faith and fair dealing.
These allegations state a cause of action for breach of the implied covenant of good faith and fair dealing. While the agreement granted defendant the discretion to decide how to market and promote the [database], defendant did not have the right to exercise that discretion in such a way as to frustrate plaintiff’s rights under the agreement, deprive plaintiff of the value of its journals, or benefit itself at plaintiff’s expense.
Claims for breach of the implied covenant of good faith and fair dealing are often dismissed because of the narrow circumstances in which the covenant applies. This decision illustrates how successfully to plead such a claim.
On May 27, 2014, the First Department entered a decision in Abu Dhabi Commercial Bank PJSC v. Saad Trading, 2014 NY Slip Op. 03767, holding that lack of personal jurisdiction is not a defense to an action to domesticate a foreign judgment.
New York has traditionally been a generous forum in which to enforce judgments for money damages rendered by foreign courts. Historically, New York courts have accorded recognition to the judgments rendered in a foreign country under the doctrine of comity absent some showing of fraud in the procurement of the foreign country judgment or that recognition of the judgment would do violence to some strong public policy of this State.
Arguments the week of June 2, 2014, in the Court of Appeals that may be of interest to commercial litigators.
No. 129: People v. John F. Haggerty, Jr. (To be argued Tuesday, June 3, 2014) (this is a criminal case addressing an evidentiary issue also relevant to commercial litigators—the best evidence rule: specifically, whether the testimony of the attorney who drafted a trust is admissible to prove the ownership of the trust assets when the trust agreement was available). See First Department decision here.
No. 136: In re: Thelen LLP (Geron v Seyfarth Shaw LLP) and No. 137: In re: Coudert Brothers, LLP (Development Specialists, Inc. v K&L Gates LLP) (To be argued Wednesday, June 4, 2014) (addressing certified questions from the Second Circuit: “Under New York law, is a client matter that is billed on an hourly basis the property of a law firm, such that, upon dissolution and in related bankruptcy proceedings, the law firm is entitled to the profit earned on such matters as the “unfinished business” of the firm?” and “If so, how does New York law define a ‘client matter’ for purposes of the unfinished business doctrine and what proportion of the profit derived from an ongoing hourly matter may the new law firm retain?). See Second Circuit decisions in In re: Thelen LLP here and In re: Coudert Bros. LLP here .
On June 5, 2014, Schlam Stone & Dolan partner Jeffrey Eilender will co-chair a CLE program about discovery in the Commercial Division. Among the panelists will be Commercial Division Justice Jeffrey Oing. This event is part of a two-day program hosted by the New York State Bar Association to focus on federal and state-court commercial litigation.


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§ 118-2 Application for license.
§ 118-3 Issuance of license.
§ 118-6 Proration of fees.
§ 118-7 Transfer of license.
§ 118-8 Expiration of license.
§ 118-9 Revocation of license.
§ 118-11 Violations and penalties.
It shall be unlawful for any person to conduct or carry on any traveling or other show, circus, exhibition, theatrical performance or street parade in connection therewith, theater, show house, opera house, concert hall, dance hall, pool or billiard parlor, exhibition ground or any other place of public amusement within the Village without having first obtained a license for that purpose, as provided in this article.
Applications for licenses required by this article shall be made to the Village Clerk upon forms supplied by him for that purpose, accompanied by the required license fee.
Licenses issued pursuant to this article shall be issued by the Village Clerk, provided that no license shall be issued until the application therefor shall have first been referred to the Board of Commissioners, which may either grant or refuse to grant any such license, as the public interest may require.
Any license granted pursuant to this article shall apply only to the building or premises stated in the application therefor.
The fee for a license issued pursuant to this article in connection with the operation of a theater, show house, opera hall or concert hall shall be $175. The fee for a license issued pursuant to this article for all other places of public amusement shall be $100.
Fees for licenses granted pursuant to this article after the first day of August in each year shall be 1/2 of the amount provided in § 118-5.
Any license issued pursuant to this article may, in the discretion of the Board of Commissioners, upon application therefor, be transferred from the place designated in the original application to some other place to be approved by the Board of Commissioners.
All licenses issued pursuant to this article shall terminate on the 31st day of December in each year.
Any license granted under the provisions of this article may be revoked by the Board of Commissioners when, in its judgment, the public good may require, on 10 days' notice to the holder thereof of a hearing before the Board of Commissioners for the purpose of revoking the same.
The provisions of this article shall not apply to any show, exhibition or entertainment held by any charitable or religious body or any Police or Fire Department organization.
Any person, firm or corporation who shall violate any of the provisions of this article shall be punishable, upon conviction, as provided in Chapter 1, General Provisions, Article II, General Penalty.


This is an action brought under Sections 205(g) and 1631(c)(3) of the Social Security Act, 42 U.S.C. §405(g) and 42 U.S.C. § 1383(c)(3), seeking judicial review of the final decision of the Commissioner of Social Security (“Commissioner”) denying the claims of Plaintiff Melissa Stoner (“Ms. Stoner”) brought on behalf of Z.S., a minor child, (“child”) for disability insurance benefits and supplemental security income under the Social Security Act. This matter has been referred to the undersigned United States Magistrate Judge to prepare a report recommending disposition, pursuant to the provisions of 28 U.S.C. § 636(b) and Rule 72(b) of the Federal Rules of Civil Procedure. For the reasons expressed herein, the Court recommends that the Commissioner's final decision be AFFIRMED.
The claimant was born on August 2, 2006, making him a minor, school-aged child at the time of the ALJ's decision. (Admin. Tr. 13; Doc. 10-2 p. 14). At the time of his hearing, the child was on home instruction and had been on home instruction since the end of the previous school year. (Admin. Tr. 54; Doc. 10-2 p. 55). This was the preference of the child's mother, Ms. Stoner, after receiving a letter from the school district indicating it would not be able to continue to allow the child to be in the typical classroom setting. (Id.). The ALJ examined Ms.
Ms. Stoner: At school he doesn't response well, appropriately to adult authority figure. He has a lot of trouble with peer interaction. He's said to have aggressive behaviors and there's been reports of him, you know, throwing a chair or object or something, kicking things, he has a lot of social difficulty and interaction with others [sic].
ALJ: What about at home?
Ms. Stoner: At home, now if he's coming from school to home[, ] there's difficulties of behavior. He needs a lot of redirection but the extent of the behavior to where he just is kicking things and doing things, he does and he has done that depending on what the circumstance[s] may be. If it might be something to his choice or something he doesn't understand or if he's feeling angry or you know, it all depends on what's really going on and what sets the mood with him.
(Admin. Tr. 55: Doc. 10-2 p. 56). Ms. Stoner further testified that the child was not undergoing any treatment or on any medication. (Admin. Tr. 55-56; Doc. 10-2 pp. 56-57).
The ALJ asked Ms. Stoner about the child's interaction and relation with the teacher authority figure who comes into his home to provide him instruction. (Admin. Tr. 56; Doc. 10-2 p. 57). Ms. Stone testified that the interaction and relation is “[m]uch different than that of what it is inside of school. . . he seems to do much better [behaviorally] . . . .” (Id.).
The child has a sister, with whom he has a healthy relationship and behaves normally towards. (Admin. Tr. 57-58; Doc. 10-2 pp. 58-59). The child also has friends in the neighborhood, and enjoys spending time and playing with them. (Admin. Tr. 58; Doc. 10-2 p. 59). According to his mother, the child loves to play sports and video games and has always been very active. (Admin. Tr. 57; Doc. 10-2 p. 58). She also testified that the child has no problem taking care of his personal needs such as hygiene or completing his chores around the house (such as cleaning his room and being responsible for his dog). (Admin. Tr. 58-59; Doc. 10-2 pp. 59-60).
On March 22, 2013, an application for supplemental security income was filed on behalf of the child. (Admin. Tr. 10; Doc. 10-2 p. 11). It alleged a disability onset date of October 1, 2011. (Id.). It claimed attention deficit hyperactive disorder (“ADHD”) and oppositional defiance disorder (“ODD”) as the child's disabling conditions. (Admin. Tr. 119; Doc. 10-6 p. 18).
The claim was initially denied on July 16, 2013. (Admin. Tr. 10; Doc. 10-2 p. 11). On November 21, 2014, ALJ Jarrod Tranguch held a hearing on the claim. (Id.). The child, his mother, and their attorney appeared via video feed. (Id.).
On March 2, 2015, the ALJ issued an opinion finding the child was not disabled under the Social Security Act. (Admin. Tr. 10-24; Doc. 10-2 pp. 11-25). The ALJ followed the three-step analysis for disability claims regarding a minor under the Social Security Act. (Id.).
At Step One, the ALJ found the child was not engaged in substantial gainful activity since the application filing date. (Admin. Tr. 13; Doc. 10-2 p. 14). At Step Two, the ALJ found the child had two severe impairments: (1) ADHD; and, (2) ODD. (Id.). At Step Thee, the ALJ determined that the child did not have an impairment or combination of impairments that met or medically or functionally equaled the severity of one of the listed impairments. (Id.). In determining the child did not functionally meet a listing, the ALJ analyzed six domains (discussed below) and found him to have less than marked limitations in four of them and no limitation in two of them. (Admin. Tr. 13-24; Doc. 10-2 pp. 14-25). (Admin. Tr. 32-35; Doc. 11-2 pp. 33-36).
On August 17, 2016, the agency Appeals Council denied Ms. Stoner's request for review. (Admin. Tr. 1; Doc. 10-2 p.2). On, October 19, 2016, Ms. Stoner filed a civil action with this Court seeking review. (Complaint, Doc. 1 pp. 1-2).
A claimant under the age of 18 (“minor”) shall be considered disabled for under Title XVI of the Social Security Act if he or she “has a medically determinable physical or mental impairment, which results in marked and severe functional limitations, and which can be expected to result in death or which has lasted for a continuous period of not less than 12 months.” 42 U.S.C. § 1382c(a)(3)(C)(I); 20 C.F.R. §416.906. Notwithstanding the above, no minor who engages in substantial gainful activity, as defined by the Social Security regulations, may be found disabled. 42 U.S.C. § 1382c(a)(3)(C)(ii); 20 C.F.R. §416.906.
The ALJ employs a three-step evaluation process to determine whether a minor is eligible for SSI payments by reason of disability. If the ALJ finds that the minor is not disabled at any point in the sequence, review will not proceed any further. See20 C.F.R. § 416.924. As part of this analysis the ALJ must sequentially determine: (1) whether the minor is engaged in substantial gainful activity; (2) whether the minor has a medically determinable, severe impairment; (3) whether the minor's impairment or combination of impairments meets, medically equals, or functionally equals an impairment listed in 20 C.F.R. Part 404, Subpart P, Appendix 1. See20 C.F.R. § 416.924.