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Saratoga Business Journal, February, 2007

Significant Changes to U.S. Patent Law

By Gerald F. Dudding

On January 3, 2006, the United States Patent and Trademark Office ("USPTO") proposed significant changes in patent examination practice for both new and continuation applications. The proposed rules would limit examination of an application to ten designated “representative claims” rather than all claims, and would also severely limit the opportunity for presentation of claims through the use of continuation applications and continued examination practice (RCE).

On July 10, 2006, the USPTO proposed new rule changes related to Information Disclosure Statements. Applicants list information for the examiner to consider in a communication called an Information Disclosure Statement (IDS). These proposed IDS rule changes are designed to encourage patent applicants to provide the USPTO the most relevant information related to their inventions in the early stages of the review process. Although the USPTO has stated that these proposed rule changes are designed to improve the speed, efficiency, and quality of the patent examination process, many are opposed to the sweeping changes. They argue that these changes will adversely affect patent applicants in terms of both cost and the scope of their patent protection.

Opposition to the Rules Changes
Despite the best efforts of the United States Patent and Trademark Office to convince many in the patent field otherwise, the proposed changes have run into substantial opposition from small businesses as well as the patent bar itself. Copies of the comments provided by these groups are found at:

1. (continuation comments)

2. - (claim comments)

The Small Business Administration has come out against the proposed rules since "[s]mall entity representatives indicated that limiting applicants to ten representative claims would make it very difficult to properly identify a potential patent, could create future liability concerns, and would weaken potential patents." Additionally, the Small Business Administration indicated that "[s]ome small entities also stressed that continuation applications are used frequently by small businesses to secure the most commercially successful inventions. Therefore, limiting the number of continuations could severely weaken small entities’ ability to protect their patent." As such, the Small Business Administration suggested that the United States Patent and Trademark Office instead provide incentives, such as accelerated examination of cases with less than ten representative claims and increasing fees for each successive continuation application. Copies of the Small Business Administration comments are found at Letter from Office of Advocacy (Advocacy) of the U.S. Small Business Administration (SBA) of April 27, 2006 Re: Changes to Practice for the Examination of Claims in Patent Applications, 71 Fed. Reg. 61 (January 3, 2006)

The American Intellectual Property Law Association (AIPLA) has also come out squarely against these proposed changes. The specific criticisms include that there has been no evidence that the proposed changes will have the desired effect of reducing the backlog of cases, would hamper the legitimate uses of continuations to obtain claim scope to which applicants are entitled under the law, and could increase the workload instead. The AIPLA took specific issue with various "flawed" assumptions that appear to be the basis of the rule, and also noted that, in not examining some of the claims, the United States Patent and Trademark Office may be operating ultra vires since the rule changes are outside of their statutory authority under 35 U.S.C. Copies of the AIPLA Comments on these rules are found at Letter from AIPLA to USPTO of April 24, 2006 Re Comments on Proposed Rules: “Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications Containing Patentably Indistinct Claims” 71 Fed. Reg. 48 (January 3, 2006) and Letter from AIPLA to USPTO of April 24, 2006 Comments on Proposed Rules: “Changes to Practice for the Examination of Claims in Patent Applications” 71 Fed. Reg. 61 (January 3, 2006).

The American Bar Association (ABA – Intellectual Property Law) also came out against this rule change. To date, no major association has come out in support of the proposed rule change.

Current Patent Application Process
Patent applications are often initially filed with a number of claims that range in scope from broad to narrow. The USPTO examines all claims presented in an application, so long as the claims are all directed to a single invention. The examiner conducts a search of the field, allows or rejects claims, and presents the applicant with reasons why rejected claims are not patentable.

Once an applicant is faced with a final rejection by the examiner (which usually corresponds to the second rejection), the applicant can either abandon the application or pursue additional avenues for presenting arguments, claim amendments, or evidence (i.e., filing a request for continued examination to re-open the case or filing a continuation application). This iterative process allows applicants to craft their claims in light of the examiner's evidence and arguments, which in turn leads to well-designed and stronger claims.

Significant Changes Proposed for Patent Examination
The USPTO's proposed rule change would limit the number of claims that can be presented for examination to ten. If applicants exceed this limit, either upon initial filing or through amendments to the claims during examination, they must identify up to ten claims as being "representative" and submit an "examination support document" that includes a patentability report and comparison of the claims to the closest identified earlier technology. The rule would not only apply to applications filed on or after the effective date of the rule, but would also be retroactive and include any application that is pending but has not received an examination.

The second proposal would limit the number of continuation applications or requests for continued examination in most cases to only one. If a second continuation application or request for continued examination is filed it must be accompanied by a showing as to why the amendment, argument, or evidence could not have been submitted during the prosecution of the prior-filed application. In addition, the proposal requires that patentably indistinct claims in multiple applications filed on the same date listing a common inventor, common assignee, and overlapping disclosure be submitted in a single application. These changes would also be retroactive and would apply to any pending application as of the date of the rule's enactment.

Although the USPTO has argued that these proposals do not present an absolute bar to the presentation of more than ten claims or the filing of a second continuation application or request for continued examination, the practical effect is that applicants wishing to pursue these options face significant and burdensome obstacles in doing so. For example, those who wish to present more than ten claims will have to accept the higher costs of conducting the initial search and examination themselves, as well as the additional time and expense of carefully crafting an examination support document that will necessarily contain admissions regarding patentability and inevitably exposes the applicant to potential charges of withholding or mischaracterizing references. This will make it much harder for independent inventors and small companies with limited resources to pursue claims that cover the full scope of their invention.

The third proposal would require applicants to submit an Examination Support Document (ESD) if they find more than 20 references or references of more than 25 pages to provide the USPTO the most relevant information related to their inventions in the early stages of the review process. While the goal of the USPTO to improve the quality of patent examination by shifting to applicants may be justifiable, where appropriate, care should be taken to avoid providing an incentive for applicant behavior that prevents the USPTO from achieving that goal. The enlarged disclosure duties outlined by the Proposed IDS Rules encourage applicants to avoid educating themselves regarding the prior art, as by conducting pre-filing patentability studies. In particular, applicants will readily understand that if they perform patentability studies they will be much more likely to find more than 20 references or references of more than 25 pages that require consideration, which in turn will trigger the duty to provide Identifications, Correlations, and Noncumulative Descriptions for a significant number of references. The USPTO’s other proposed rules concerning Examination Support Documents (ESDs) substantially amplify this incentive.

The net effect of the Proposed IDS Rules and proposed rules concerning ESDs is that applicants who conduct pre-filing searches are likely to find it necessary to provide Identifications, Correlations, Non-cumulative Descriptions, and ESDs for a substantially greater number of references. Accordingly, the Proposed IDS Rules are likely to cause many applicants to avoid prefiling patentability investigations or otherwise inquiring as to the state of the art, which will result in substantially fewer relevant references being disclosed to the USPTO. The USPTO should withdraw the Proposed IDS Rules in favor of a revised set of rules that shifts a less burdensome set of duties onto applicants.

Implications for Patent Applicants
If these rules are to be implemented, in the short term their retroactivity will result in substantial costs for patent applicants. Applicants will be forced to review all applications they currently have on file to determine the need to file continuation applications before the effective date of the rule, as well as to designate ten representative claims in each application.

In the long term, as stated in comments filed with the USPTO by the American Intellectual Property Law Association, the combined effect of these proposed changes will be to shorten the examination of applications, increase the pressure on applicants to reduce the scope of claims they are pursuing, and force applicants to accept more narrow claims as a result of the more limited opportunity for continued presentation of claims.

The USPTO's Proposals Are Still Only Proposals
The USPTO's proposals are still only proposals, and may be amended prior to implementation in response to public comments that have been received. These proposals have faced significant opposition from multiple industry groups, both in the form of written comments submitted to the USPTO as well as views expressed during several town hall meetings that have been conducted by the USPTO last spring. However, the extent to which the USPTO will incorporate such comments into the final rules is unknown. At the most recent town hall meeting on April 21, 2006, USPTO officials indicated that the implementation of any rule changes would be accompanied by 30, 60, or 90 days notice before the effective date of the changes. Therefore, patent applicants should stay tuned for developments and be ready for the possibility that they will need to review all of their pending applications to designate ten representative claims in each application and to identify the need to quickly file continuation applications prior to the effective date of any rule changes.

Strategies for addressing the USPTO proposed rule changes:

  • Evaluate all current applications for filing continuations prior to implementation of the effective date of the rule changes;

  • Take advantage by requesting interviews with the Examiner in order to optimize communication;

  • Be prepared to file an appeal after a second rejection; and

  • File multiple applications, such as provisional, Paris Cooperation Treaty (PCT), and U.S. non-provisional applications where the application supports patentably distinct claims; or

  • Instead of filing multiple applications, file one application having multiple inventions and force restriction by designating claims having a diverse subject matter.


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Gerald F. Dudding, J.D., Ph.D. Mark K. Dudding, B.S.
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