Saturday, February 25, 2006

On the USPTO's proposed limitations on continuing application practice

As pointed out in IPT in Nov. 2005, RCE's are now the most prominent type of "continuing" application, although they were not considered in data of Lemley and Moore in the Boston University Law Review ("Ending Abuse...")

Of the issue of patent application backlog, it's hard to believe that continuing applications are the direct source of application backlog, since the fraction of continuing applications has been relatively constant for some time (ca. 25% of all applications). Further, one notes that it is probably easier for an examiner to handle ANY continuing application (whether RCE, div, con, cip) than to start on an entirely new application. Thus, a rule that would foreclose 100 continuing applications would not open up an amount of time which could be used to handle 100 new applications.

Nevertheless restricting continuing application practice is SOMETHING that the USPTO can do to free up some time. In the presence of repeated failure by Congress to end fee diversion, the USPTO is engaging in a bit of self-help. It won't be enough to stem the backlog, but it might make a dent. The PTO's position is out of self-interest, not through acceptance of the validity of the article by Lemley and Moore.

Comments on the USPTO proposal on continuations:

from 271blog:

On 4 Jan 06

There are two primary reasons. First, current continuation practice allows applicants to file unlimited continuations off of a single disclosure. As a result, the USPTO can never finally reject, or even allow, an application for patent. And when applicants file long strings of continuations from allowed applications, the effect of this is akin to the "submarine patents" of bygone days - defendants can feasibly be sued multiple times off of the same disclosure, and crafty applicants can tweak continuation claims to ensnare unsuspecting companies. Recent research conducted by legal scholars Mark Lemley and Kimberly Moore found that, while continuations are filed in 23% of all patent applications, patents based on continuation applications represent 52% of all litigated patents.

The second reason is that continuation applications unnecessarily eat up USPTO resources. The Office claims that 30% of examiner time is spent reviewing continuation applications. Furthermore, the Office issued over 289,000 first Office actions on the merits in fiscal year 2005. According to the Office, "had there been no continued examination filings, the Office could have issued an action for every new application received in 2005 and reduced the backlog by issuing actions in 35,000 older cases. Instead, the Office's backlog grew because of the large number of continued examination filings." While the USPTO appreciates the necessity of filing continuations to further prosecution, the Office has statistically concluded that the "marginal" benefits provided by second or subsequent continuations are outweighed by the burden placed on the USPTO.

end 4 Jan 06

begin 21 Feb 06

During February's [2006] Town Hall Meeting in Chicago, the USPTO was putting forth arguments in support of the continuation restriction proposal. One of the main reasons for restricting continuations was that the purported excess of continuation applications was overwhelming patent examiners, thus slowing production.

Most practitioners rightfully questioned the extent to which continuation applications delay overall examination. The USPTO has been touting the hiring of 1,000 examiners over the coming year as evidence that the USPTO is tackling the pendency problem. Also, the encouragement of electronic filing and other initiatives are being promoted additional tools for reducing the amount of time applications wallow in the Office.

So it was somewhat surprising that, during the Town Hall Meeting, the USPTO claimed that the hiring of additional examiners would not solve production problems, and that restricting continuations was necessary as a result. In fact, the USPTO made a pretty strong point of this, as shown by one of the Power-Point slides provided at the meeting:

[We Can Not Hire Our Way Out!]

end 4 Feb 06

One comment--> Rather, it seemed apparent that the real reason for restricting continuations was to restrict applicants’ ability to use a continuation application to address competitors’ efforts to design around. They apparently believe that practice is inappropriate. In other words, at least for the continuation rules, they seem to be using the backlog as merely a smokescreen for a substantive change in law/policy.

from promotetheprogress:

To make matters worse, the proposed rule would apply to applications filed on or after the effective date of the rule, if adopted. What does that mean? In essence, beginning on the effective date of the rule, any application that is a third or subsequent application in a chain must be accompanied by a petition providing justification for its existence. Oh, and another thing...the standard for the justification you must's perfectly undefined.

Now you can really worry.

If adopted as proposed, the new rule would force all companies that make use of legitimate continuation practice to review their entire portfolio of pending applications and determine which continuations should be filed before the effective date of the rule. This would result in great expense and administrative burden and would likely translate into a massive surge in filings during the weeks, days, and months before the effective date of the rule. If a company elects to avoid the time and expense of reviewing the portfolio and filing continuations, it will risk losing the ability to seek protection because the burden that must be satisfied under the proposed "justify your existence" petition is not known.

So, for corporate counsel, the proposed rule creates a largely unpredictable expense and a tremendous fear of the unknown.

Now you can really, really worry.

What should you do?

First, understand the proposed rule and its potential effect on your patent application filing strategy. Biotech, pharma, and medical device companies should pay particular heed. You can view and/or download the Federal Register Notice of the proposed rule here. your intellectual property trade association of choice and get involved with its coordinated effort on the issue.

Third, consider filing comments on the proposed rule. Written comments can be sent by e-mail to and must be received on or before May 3, 2006.

[IPBiz post 1285]


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