Patent Strategy Lesson: Shaping Patent Claims to Match Changing Markets

Nest Learning Thermostat with Energy Savings Setting Icon

Anyone working with US patents have found themselves faced with the situation where, when looking at a patent family, they find many, potentially even hundreds, of granted patents and pending applications that all claim the same parent or provisional application. As discussed previously, when talking about comparing claims text, US patent law allows for Continuations, Continuation-in-Parts and Divisionals to be applied for after an initial application has been filed. According to the Wikipedia page on Continuing Patent Applications, Continuations and Continuation-in-Parts can be distinguished as follows:

A “Continuation application” is a patent application filed by an applicant who wants to pursue additional claims to an invention disclosed in an earlier application of the applicant (the “parent” application) that has not yet been issued or abandoned. The continuation uses the same specification as the pending parent application, claims the priority based on the filing date of the parent, and must name at least one of the inventors named in the parent application. This type of application is useful when a patent examiner allowed some, but rejected other claims in an application, or where an applicant may not have exhausted all useful ways of claiming different embodiments of the invention.

During the prosecution of a continuation application, the applicant may not add additional disclosure to the specification. If the inventor needs to supplement the disclosure of the earlier parent application, he must file a Continuation-in-Part application.

It is common practice, with many inventions, to always have at least one application pending in the United States so additional claims can be written by filing Continuation or Divisional applications. Once the last pending application has issued (with the fees being paid) the door closes for the filing of new claims by these routes. For this reason, whether the case is still open for prosecution becomes a key value indicator, when talking about the overall value of a patent portfolio or document.

It is also a sign of a good patent strategy when a company follows this practice since it allows them to shape their claims to cover new entrants to their field. The last sentence of the first paragraph copied from Wikipedia on Continuations spells this out when it says that these applications are valuable “where an applicant may not have exhausted all useful ways of claiming different embodiments of the invention”. In this case the applicant is writing claims on different embodiments based on what they see being developed or marketed by a competitor as they enter the space.

On the surface this may sound like a “submarine” patent or dirty pool but as long as the specification can support the new claims and they are filed before the last pending application has issued this is a perfectly legitimate and common strategy followed by patent savvy companies and their counsel. Keep in mind that with applications filed after June 8th, 1995 the term of a US patent is approximately twenty years from the earliest priority date so the practice of writing Continuation applications can only be carried on for so long and the applications filed years later will still expire naturally at the same time as the earliest one filed (barring extensions).

I came across a particular good example of this practice while reading a daily PriorSmart email alert on recently filed patent litigations. In the case of Allure Energy v. Nest Labs (Civil Action No. 9:13-cv-00102 Eastern District of Texas), Allure Energy was issued US patent number 8,442,695 and on the very same day filed a patent infringement lawsuit against Nest and two utility companies who also sell the Nest Learning Thermostat.

This case caught my intention since I own a Nest and know that, as a potentially disruptive technology entrant into the relatively conservative field of thermostats, they have already been sued by Honeywell, one of the entrenched players. I wasn’t looking specifically for an example of claims shaping when I looked at this case, but as I started to learn more about the Allure portfolio and individually about the ‘695 patent I recognized that it provides an excellent study on the practice.

Let’s start with some dates to put this study into perspective. The ‘695 patent was filed for on November 22nd, 2011 claiming priority to a provisional application filed on August 21st, 2009. Nest Labs appears to have been founded in 2010 by Tony Fadell and Matt Rogers and on October 25th, 2011 issued a press release announcing the “world’s first learning thermostat”. So, within a month of the announcement, with much publicity and fanfare, of the Nest Learning Thermostat we have a patent filing from Allure that they eventually will use to file suit against Nest. It is also important to point out that the original 30 claims that were filed were canceled after a final rejection and replaced with the claims that would go on to grant during a Request for Continued Examination on December 26th, 2012. The new claims appear to be even more targeted towards Nest.

Looking at the granted claims of the ‘695 patent we find the following:

1. A temperature controlling apparatus, comprising:

  • a housing including an LCD screen capable of displaying settings information and an energy savings settings icon;
  • a processor configured to detect multiple inputs with the housing, the multiple inputs including inputs from a plurality of users providing the settings information in response to the interaction with the housing;
  • the processor further configured to initiate a suggestion of a setting resulting in a display of the energy savings settings icon;
  • encoded logic configured to be used by the processor to process the multiple inputs and determine a schedule and determine whether to display the energy savings settings icon based on the determined schedule;
  • a wireless communication module configured to access a hosted web service and a mobile device, wherein each of the hosted web service and the mobile device may receive multiple inputs from the plurality of users such that the settings information used to determine the schedule can be provided remotely; and
  • wherein the multiple inputs can further include detecting a presence in proximity to the housing of at least one user over a period of time and providing a presence status to determine the settings information.

2. The apparatus as set forth in claim 1 wherein the processor is further configured to:

  • detect the multiple inputs with the housing subsequent to the determination of the schedule; and
  • update the schedule in response to the multiple inputs with the housing subsequent to the determination of the schedule.

3. The apparatus as set forth in claim 1 wherein the temperature controlling apparatus is a thermostat.

4. The apparatus as set forth in claim 1 wherein the LCD screen has a touch screen interface.

5. The apparatus as set forth in claim 1 wherein the multiple inputs are an increase or decrease in a temperature set-point of the temperature controlling apparatus.

6. The apparatus as set forth in claim 1 wherein the housing is round and the interface includes a temperature control mechanism configured to rotate left and right in response to the multiple user inputs.

I have highlighted the energy saving setting icon portion of claim 1 since when looking at the Notice of Allowance from USPTO Public PAIR it was this item, previously listed in an independent claim, that needed to be added to the dependent claim in order to put the application in order for an allowance. I have included a picture of my Nest thermostat at the top of this post displaying an energy savings icon in conjunction with the setting the thermostat is set to (and yes, we prefer to keep the house a little warm in the summer).

Looking at the claims of the ‘695 patent it appears that Allure may have had the Nest press release and the subsequently launched product in mind when they wrote them. The release lists the following features:

  • Programs itself – Nest programs itself based on the temperatures you set. Nest learns your personal schedule in a week and starts automatically turning down heating or cooling when you’re away to save energy. Nest will keep refining its schedule over time.
  • Saves Energy – Nest tracks the temperatures you typically set and guides you to more energy-efficient ones, displaying the green Nest Leaf as a reward when you set the temperature to a more energy-efficient setting. The Auto-Away™ feature uses sensors to detect when you’re not home, lowering the temperature and saving energy. You can also check Energy History to see how much you saved.
  • Connected – Connect Nest to your home’s Wi-Fi to control it from your laptop, smartphone or tablet. Change the temperature, adjust your schedule and check your energy usage.
  • Simple to Use – Rotate the outer ring to adjust the temperature. The display turns blue when cooling and red when heating. Push down to open the menu.

For the most part these look to be mirrored in the claims right down to the fact that the thermostat is round with a rotating temperature control that is listed in claim 6.

At the beginning of the post it was mentioned that writing Continuation applications like this one is an acceptable practice assuming that the case is still open for prosecution and the specification supports the newly written claims. Looking at the Continuity Tab from Public PAIR for the ‘695 patent the following is found:

Public PAIR Continuity Data on ‘695 Patent

It can be seen that six additional granted US patents have resulted from the initial filings and that several more applications are still pending including two that have been filed in the last year to ensure that the case continues to be open for prosecution, and claim shaping, as the market for connected energy devices continues to grow and evolve.

Notice that all of these applications are Continuations as opposed to Continuation-in-Parts which means that they all have the same specification and no new material has been added in order to justify new claims. This is also a sign of a good patent strategy since the law firm (Dickson Wright) and the inventors invested the time to add as much information as they could on this invention to the initial applications when they filed them.

Speaking of the specification, in order to prove that no new matter had been added, Kaleidoscope was used to compare the specification text between the seven granted patents associated with this portfolio. Kaleidoscope was discussed in a previous post on comparing claims text within and between different documents. In this case the specification text was a little over 38,000 words (covering about 25 pages in a US patent in traditional two column format) and with the exceptions of some typos and punctuation errors were identical between all of the granted patents.

Added Space is One Small Difference Between Specifications of Different Granted Patents in Allure Portfolio

There were no 112 rejections, which would have indicated that the specification did not support the claims, listed by the examiner but I thought it would be interesting to at least look for the energy saving settings icon part of the claim in the specification since this is the item that brought the application into order for allowance. The following paragraph was found in the specification that seems to match this portion of the claim:

According to a further aspect, a current readings section 718 can also include an energy savings level 724 configured to indicate a savings level that relates to current thermostat set-point 722. For example, as current thermostat set-point 722 is set to a low set-point, an air conditioner unit may run more frequently and cause a low energy savings. As such, a visual indication of an energy savings can be displayed in association with a current set-point giving a user feedback on energy consumption based on a thermostat set point. In some forms, a user can adjust a thermostat set-point up or down, and an energy savings level can be altered in near real-time based on the users selection.

This post is already quite long but there are two other items about this case that surprised me as I was looking into it.

  1. Allure filed for Track 1 prioritized examination for this application and paid extra to get this sent to the front of the queue. I haven’t looked to see if this is a common practice by Allure with this portfolio but it seems interesting in this case that they spent extra money to get this resolved quickly. This would support the shaping argument for a product already on the market.
  2. In their complaint, Allure goes to great lengths to explain how their invention benefits the State of Texas and that the corresponding Eversense product that they produce was made in Texas. They go on to state that Nest is made in China and does not benefit the State of Texas. I am not sure how this is material to patent infringement but it was interesting to see Allure play the patriot card when filing this suit.

Keeping patent cases open for additional prosecution is a common component of good patent strategy and provides the patent owner with the opportunity to continue shaping their claims so that new entrants that practice their invention can be covered as different embodiments. This is possible when applicants invest the time and resources into building a thorough specification that covers all aspects of the invention and considers how the invention might be applied.

While it can’t be proved that Allure Energy was thinking specifically of Nest when they filed the Continuation application that became the ‘695 patent it certainly seems like an interesting coincidence that it was filed within a month of the press release issued by Nest discussing their new product. In any event, it provides a detailed example of how patent strategy can play a vital role in corporate strategy and competing in a technology space.

Disclaimer: I am not a patent attorney and this post does not constitute legal advice. It just seemed like a really interesting example worth writing about and sharing.

Comments 5

  1. Good Post, and a good example of how managing prosecution and IP can be a strategic benefit to companies. Somewhat related to this, an interesting article came across my feed last week on filing behaviors for Essential Standards Patents by Kohler, Blind and Thumm. I think managing IP like it will be in an essential standard, and how it is being done in the Allure / Nest case probably share the same characteristics: prosecution shapes the patent to match the market and the invention, and it is not blindly prosecuted to just “get the patent”.

    The article is here, if you are interested:
    http://idei.fr/doc/conf/sic/seppapers2013/thummweb.pdf

    I’m working on a blog post on the topic and will let you know when it’s up.

    1. Hey Peter,

      Thanks for the thoughtful response and interesting link. I will certainly have a look at the paper. I also completely agree with your comment about blindly prosecuting to just “get the patent”.

      Let me know when you post on the topic so I can tweet it out to my followers. I have you on my list of RSS feeds so I will likely see it there as well.

      Thanks again,
      Tony

    2. Hi Peter,

      I’ve worked with you so we have a little history. I agree with everything. The only thing I would add (and it should be noted) is that sometimes it’s okay to “just get the patent” as you can rely on subsequent continuations to flesh out better claims. Sometimes getting an issued patent, no matter the value of the claims, is a good thing!

      I urge all to understand the nuances of continuations and CIP’s as it is the heart of any valuable IP Strategy plan and critical to all companies “core IP”.

      – Scott Davis

  2. On one of the LinkedIn Groups I post these studies to, a comment was made by Steven Hansen that I thought was particularly insightful. Steven writes his own blog at http://hanseniplaw.com/blog/ and I find his writing on patent prosecution and the business of patents to be excellent. With Steven’s permission I am posting his comment here as well:

    One of the ways that the U.S. patent system benefits inventors more than many other patent systems is the relative ease with which claims can be added to cover competitive products after an application is filed. The key is to keep a continuation pending as Tony mentions. Of course, any newly added claims must be supported by the originally filed application, but this is where U.S. law is more favorable to inventors than other jurisdictions (e.g., Europe). U.S. practice tends to take a much more relaxed approach in determining whether an original application supports later-filed claims. Features from different embodiments can sometimes be combined, and in addition, claims can be broadened much more easily in other jurisdictions as long as they are not broadened so much as to encompass the prior art. In contrast, examiners in Europe and elsewhere are more inclined to find that claims cannot be broadened because in so doing the applicant typically omits something from the claims which the examiner contends is necessary to the invention, even if the omitted feature is not required to distinguish the prior art.

    Of course, the downside to the U.S. approach is that competitors can find themselves “submarined” to some extent by the addition of different claims in continuation applications, and they may find this unfair. However, from the inventor’s perspective, it is important to recognize that obtaining the full value of a U.S. patent application requires making full use of the liberal continuation application practice we have here.

  3. Basically, as your article suggests, this patent strategy is some sort of way for you to file a claim to an invention disclosed in an earlier application of the applicant for approval. That sounds confusing yet important when naming or creating a product. I’ll try to read more on the legalities of these patent strategies and their laws. Thanks!

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