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Under the proposed rules, the PTO will take away the right to unlimited continuations and will allow the patent applicant to “continue” the examination process only once. The patent applicant may not want to use up its one chance to “continue” the application to overcome a patent examiner’s rejection so as to keep open the option of a subsequent “continuation” application as part of a “late claiming” strategy. For a patent applicant facing a final rejection of claims, the only recourse would be appeal to the Board of Patent Appeals and Interferences. But a patent appeal is a much more rigid, costly and time-consuming process. In addition to dramatically increasing the cost and time commitment of patenting, the applicant on appeal risks loss of patent coverage in an appellate decision that cannot be easily reversed.
According to the PTO, these changes to the rules are necessary to combat the large and growing backlog of unexamined applications. The increasing number of patent filings in the U.S. has indeed put pressure on the PTO to keep up with its examination obligation without jeopardizing patent quality. The PTO considers the unlimited right to “continue” an application a contributing factor to the backlog problem, estimating that 30 percent of all applications filed in 2005 were continuation applications.
The Federal Trade Commission and corporations such as IBM, Apple Computer and eBay all support the proposed rules as a solution to the backlog problem. In particular, eBay, the subject of numerous patent infringement suits, applauds the proposed rules for targeting those that are “abusing the patent system” by not distinctly claiming the invention until after multiple generations of continuations have been filed. The FTC favors the proposed rules as limiting the ability of patent owners to practice the “late claiming” technique, which the FTC regards as harmful to market competition.
On the other hand, other corporations and industry groups such as the American Intellectual Property Law Association fault the PTO for proposing changes that take away patent applicant rights without first considering other constructive measures to combat the backlog problem, such as increasing the size, training and resources available to the examiner corps, privatizing certain administrative tasks such as publications and searching, and making creative use of the fee structure to discourage undesired or abusive behavior by applicants. Other practitioners predict that the proposed rules will only shift the backlog to the appeals process.
PTO solicitor John Whelan recently indicated that the PTO hopes to issue a final decision on the proposed rules before Jan. 1. Companies that wish to protect their intellectual property assets through the patent system should take the following steps now:
1. File continuation applications now rather than wait for the changes. Applicants that anticipate filing any continuation, divisional or continuation-in-part applications in the future should do so now rather than face the proposed rules or the uncertainty of other rules that may take effect. The PTO is likely to implement the rule changes prospectively, so that any applications already on file at the time of the rule changes may be governed by the previous rules. Companies should evaluate their most important inventions now to identify candidates for continuation applications.
2. Increase the number of claims filed with the applications. Applicants should ensure that more claims are presented for examination now under the current examination regime. All patent applications should include a wide assortment of different claim types and breadths. This way, there is a greater likelihood of getting sufficient patent protection and less need for continuation applications later. You should think about alternative implementations of the invention, and be sure that claims are crafted now to cover those implementations.
3. Lobby the PTO and Congress. Although the deadline for public comment on these proposed changes was May 3, the PTO is still holding town hall meetings with various stake-holders and soliciting other possible alternatives to address the backlog problem. The proposed rule changes may ultimately require a statutory amendment rather than mere administrative rulemaking, and so Congress will likely need to step into the debate. See In re Henriksen, 399 F.2d 253, 262 (C.C.P.A. 1968) (holding that only Congress, not the PTO, can limit the number of continuation applications). Many industry groups have a lobbying function that could be used to influence the ultimate adoption of the new rules.
The effectiveness and quality of the patent system is critical to maintaining the technological edge of U.S. companies. Corporate decision makers need to be aware of these potential changes to the patent rules that may impact their ability to obtain the broadest patent protection for their inventions. Companies should take action now in anticipation of these new rules to ensure that inventions are adequately protected.
Brian Berliner is a partner in O’Melveny & Myers’ Los Angeles office. His practice focuses on representing high technology companies, particularly with respect to the acquisition, management and enforcement of intellectual property rights.
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