Sunday, November 11, 2007

On the burdens of 37 C.F.R. § 1.78(f)(2)

Writing of Rule 37 C.F.R. § 1.78(f)(2) (enforcement of which is now temporarily enjoined), patent docs noted:

Paradoxically, one of the features of this aspect of the new rules that concerned members of the patent bar and their clients might be useful in the context of reducing the backlog of unexamined applications. In order to comply with the identification requirement, practitioners would need to know about the existence, content, and priority claims of all commonly owned applications or patents having an inventor in common with the application the practitioner is prosecuting. This raised a burden under the now-enjoined new Rule 78(f) for practitioners who prosecute applications for larger assignees that employ the services of multiple outside counsel. For each application, Outside Counsel A prosecuting a first application would need to know the identities of all other applications being prosecuted by Outside Counsels B through Z (and, of course, the converse). This requirement is less burdensome in the absence of the more extensive analysis required to comply with now-enjoined new Rule 78(f)(2), but still could represent an administrative nightmare for a corporation such as IBM which has, according to its amicus brief filed in the consolidated Tafas v. Dudas and GSK v. Dudas case, 30,000 pending applications.

IPBiz previously noted the paradoxical position of IBM, who both took the position of strongly supporting the rules on continuing applications AND who filed an amicus brief criticizing the rules. [See IPBiz post:
IBM's "apparent schizophrenia" on patent policy revisited

For simply keeping track of related patent applications, who is in the better position to know what IBM has filed: IBM or the USPTO? Who created the "administrative nightmare," IBM or the USPTO?

Patent docs continued:

And this is where the convergence of the rule and the backlog might take place. It is at least possible that a company like IBM would conclude that a portion of these pending applications are not sufficiently valuable to justify the administrative costs incurred by complying with the notification rule. This does not imply that these applications were filed improperly or unnecessarily. However, it is the case that some applications lose value over time, either because the inventions they protect have not had the expected or hoped-for commercial success, or because these inventions have been overtaken by "new and improved" embodiments (that are the subject of their own applications), or for other business reasons. It is impossible to know the magnitude of this category of cases, but if it as little as 10% that would reduce the backlog by 3,000 applications from one applicant. If this pattern were to apply across the spectrum of at least large companies, by this one administrative device alone the patent backlog could be reduced by 75,000 applications. This is close to the number (11%, or about 82,500 applications) that the Office has said contain more than 5 independent claims and 25 total claims, or more than the number of applications having more than 2 continuations.

Of the text --not sufficiently valuable to justify the administrative costs--, one would hope that someone at IBM would be keeping track of "who" at IBM is filing "what" patent applications. Even if IBM chooses to use multiple patent counsel to file the applications, someone at IBM should be coordinating what is going on and maintaining oversight as to -- applications losing value over time--. One hopes that the "burden" of the new rule, which merely requires reporting of knowledge hopefully already in existence, would not tip the scales as to the valuation of patent applications.


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