SKGF_Presentation_What You Need To Know About The Proposed USPTO Rule Changes And Other Reform Initiatives_2006

507723_1.ppt

What You Need to Know about the What You Need to Know about the Proposed USPTO Rule Changes and Proposed USPTO Rule Changes and

Other Reform InitiativesOther Reform Initiatives

Michele A. Cimbala Ph.D., Esq.

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USPTO Initiatives

Overview

• Backdrop at the USPTO

• Proposed Rules Changes and Practice Recommendations

• Potential Impact

• Other Reform Initiatives

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USPTO Initiatives

Changes on the Ground Already

New campusHired 1000 new examiners in 2005Central Re-exam Unit formed July 2005Second-Layer Review – extended office-wideEnhanced search toolsPatent Academy changesExaminer re-certificationTelecommuting/HotelingWeb-based electronic filing (EFS-web) released March 16, 2006

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USPTO Initiatives

Changes on the Ground Already

Reduced Allowance rate58.7% Allowance rate office-wide

(down from traditional 80%+ rate)11% Allowance rate in business methods

Increased PendencyBut dramatic reduction in pendency for cases on appeal

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Problems from PTO Perspective:

• Pendency• Keeping Up with Growth• Quality• Past Solutions Failed

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First Action Pendency by Art Areas

30.9

52.1

24.3

50.4

39.7

30.8

27.7

Pendency1 (months)

3723 – Tools & Metal Working

3612 – Land Vehicles

2833 – Electrical Connectors

2651 – Dynamic Information Storage & Retrieval

2125 – Manufacturing Control Systems and Chemical/ Mechanical/Electrical Control

1752 – Radiation Imagery

1620 – Heterocyclic Compounds and Uses

Low Pendency Art Areas

10.9

12.0

8.8

16.1

20.0

12.1

16.9

Pendency1

(months)

3731 – Surgery: Cutting, Clamping, Suturing

3628 – Finance & Banking, Accounting

2836 – Control Circuits

2617 – Interactive Video Distribution

2123 – Simulation and Modeling, Emulation of Computer Components

1743 – Analytic Chemistry & Wave Energy

1640 – Immunology, Receptor/ Ligands, Cytokines, Recombinant Hormones, and Molecular Biology

High Pendency Art Areas

1“Average 1st action pendency” is the average age from filing to first action for a newly filed application, completed during October-December 2005.

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Inventory by Art Examples

38-47

25-130

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111

46

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38-51

Months of Inventory*

3742 – Thermal and Combustion Technology

3651 – Conveying

2831 – Electrical Conductors

2651, 2653 – Information Storage and Retrieval

2125 – Manufacturing Control Systems and Chemical/ Mechanical/Electrical Control

1734 – Adhesive Bonding and Coating Apparatus

1620 – Organic Chemistry

Low Inventory Art Areas

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12

8

12

10

10

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Months of Inventory*

3731 and 3737 – Medical Instruments, Diagnostic Equipment

3620 – Business Methods

2836 – Control Circuits

2611 – Interactive Video Distribution

2127 – Computer Task Management

1753 – Radiation Imagery

1614, 1615, and 1617 – Drugs, Bio-affecting and Body Treatment

High Inventory Art Areas

*The number of months it would take to reach a first action on the merits (e.g., an action addressing patentability issues) on a new application filed in July 2005 at today’s production rate. Today’s production rate means that there are no changes in production due to hiring, attrition, changes to examination processing or examination efficiencies, and that applications are taken up in the order of filing in the given art unit/area. Of course, USPTO is taking aggressive steps to ensure changes that will significantly lower the inventory rates in high-inventory art areas.

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Technology Center Application Inventory

1 “New Application inventory” is the number of new applications designated or assigned to a technology center awaiting a first action. 2 “Overall Pending Application inventory” is the total number of applications designated or assigned to a technology center in an active status. Includes new applications; rejected awaiting response; amended; under appeal or interference; suspended; reexams and allowed applications awaiting grant publication.

*Total inventory includes applications not assigned to a particular TC, awaiting processing either pre- or post-examination.

27,599809,323108,039101,097137,458138,822102,440105,44795,006Overall Pending Applications2

9/30/2004

18,451508,87865,00556,73877,65197,38071,77863,92355,402New Applications1

9/30/2004

38,104932,300130,168117,045159,687167,721117,728120,767107,647

Overall Pending Applications2

9/30/2005

24,534586,58083,22570,35494,425115,58576,52972,69762,644New Applications1

9/30/2005

3700 Total* Design360028002600210017001600

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Technology Centers Rework* Statistics

* Rework first actions are those actions that are in a Continuing (CONs and CIPs), RCE, CPA or 129(a) applications (excludes Divisionals).

FY 2002 FY 2003 FY 2004 FY 2005TC

Summary% FAOM Rework

% FAOM Rework

% FAOM Rework

% FAOM Rework

1600 36.4% 39.7% 40.3% 42.4%1700 25.2% 26.9% 27.1% 28.0%2100 23.9% 24.0% 24.6% 28.2%2600 24.8% 24.2% 24.3% 25.4%2800 19.1% 22.0% 24.9% 24.1%3600 17.7% 21.2% 23.2% 28.5%3700 22.2% 25.1% 24.0% 28.1%UPR 23.2% 25.3% 26.1% 28.3%

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USPTO Statement of the Problem

Why focus on continuing applications and RCEs?

Each continuing application or RCE:

• Requires the USPTO to delay taking up a “new” application, thus contributing to the backlog of unexamined applications

• Defeats the public notice function of the patent claims in a initial patent since it allows the possible issuance of multiple patents

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USPTO Statement of the Problem

When applicants are allowed to generate a string of continued examination filings from an initial application, the exchange between examiners and applicants:

– becomes less beneficial and

– suffers from “diminishing returns” as each of the second and subsequent continuing applications or requests for continued examination in a series is filed

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USPTO Initiatives

Rule Making Proposals

– Limits to Continuation Practice (comments due May 3, 2006)

– Limits to Claim Examination (comments due May 3, 2006)

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Vision

• Proposed Rule Changes goal:– free up examiner time now spent on re-work so

that cases waiting for a first office action are examined sooner.

• Potential undesired impact:– Increased complexity of prosecution– Increased cost– Less protection

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First Notice of Proposed Rulemaking

• (1) “Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications containing Patentably Indistinct Claims,” 71 Fed. Reg. 48 (January 3, 2006)

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(1) Continuing Examination

• The revised rules require that a second (or subsequent) continued examination filing be supported by a showing as to why the amendment, argument, or evidence “could not have been” previously submitted.

• The showing is in the form of a petition that the USPTO estimates would take 2 hours to prepare. (Proposed 37 C.F.R. § §1.78(d)(1)(iv) and 1.114(f))

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Proposed 37 C.F.R. § 1.78

• Definition: A “Continuing Application” is a continuation, divisional or continuation-in-part (CIP) application.

– Applications that claim benefit of a provisional application or priority to a foreign application are excluded from the definition.

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Proposed 37 C.F.R. § 1.78(d)(1)(i)

– A nonprovisional application that is a continuation or CIP application may claim benefit of only a single prior-filed application and even then only if:

– Benefit of the prior-filed application is not claimed in any other nonprovisional application other than a divisional application; and

– NO request for continued examination (i.e., NO RCE) had been filed in the prior application.

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Proposed 37 C.F.R. § 1.78(d)(1)(i) example

B nonprov C nonprov↑Con/CIP ↑Divisional only

________________________↑

A (nonprov/no RCE)

Both B and C can claim benefit of ANo showing needed for either B or C

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Proposed 37 C.F.R. § 1.78(d)(1)(iii) example

C↑ Con/CIPB (no RCE)↑ DivA (Restriction/Lack of Unity)

Claims in B are a non-elected group from XNo showing needed for either B or C

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37 C.F.R. § 1.78(d)(1)(i) example: two CIP’s

C (claims new matter “B”)↑ CIP

B B (new matter “B”)↑CIPA

No showing needed for C if C only claims matter new in B

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(1) Continuing ExaminationProposed 37 C.F.R. §§ 1.78(d)(iv) and 114 example

C with “showing”↑ CIP/Con/Div/>1 RCEB

B is a nonprovisional application and either- an RCE has been filed in B or - B claims benefit of another nonprovisional application

C has new argument/evidence/amendment

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Proposed 37 C.F.R. § 1.78(f)(1) – Identification

Applicant must identify – in the “cross-reference to related applications” section –- all non-provisional applications/patents with benefit or filing dates within 2 months of each other

- that name at least one common inventor- that are owned by the same entity

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Proposed 37 C.F.R. § 1.78(f)(1) – Identification (cont.)

• Must provide ID within 4 months of filing or of entering U.S. national phase

• ID required even if the applications do not have similar subject matter.

[Question: would such identification also make those applications available to the public?]

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If circumstances under 78(f)(1) exist

- And if multiple applications have the samefiling/benefit date

- And contain substantial overlapping disclosure

- Applicant must explain how the claims are patentablydistinct or submit terminal disclaimer.

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If any other (nonprov) application has been identified as containing patentably indistinct claims, absent a sufficient explanation, the Office may require elimination of such claims from all but one of the applications.

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Proposed 37 C.F.R. 1.114(f)

• Only a single RCE may be filed per application

• No RCE may be filed in any continuing application other than a divisional unless the RCE is accompanied by a petition and fee and showing as above

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Proposed 37 C.F.R. § 1.114(f) example

B C↑Con/CIP ↑Div only

________________↑

A (nonprov/no RCE)

Both B and C claim benefit of AYou could not file an RCE (or CON) for B without petition and a showingYou could file an RCE in CYou could file a CON of C if there was no RCE in C

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• Proposed changes to Rule 78 apply to any application filed on or after the effective date of the final rule.

• Proposed changes to Rule 114 apply to any application in which an RCE is filed on or after the effective date of the final rule.

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Practice recommendations

(1) Review portfolios of pending applications

(2) Decide whether to file a continuing application soon - to grandfather it under the current continuing application rules

(3) Budget for possible grandfather filings in your 2006/2007 budget

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(1) Continuing ExaminationPractice Recommendations (cont.)

(4) Actively prosecute in PCT Chapter II in front of the US/IPEAto get another round with the U.S. examiner

- interview the examiner- attempt to settle novelty/inventive step issues

(Enablement/written description will only be raised in U.S. National Stage)

(5) Do not use “bypass” § 371 by direct filing to enter U.S. National Stage; the § 111 application will be your one allowed continuation; must use 371 procedures

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2nd Notice of Proposed Rulemaking

“Changes to Practice for the Examination of Claims in Patent Applications,” 71 Fed. Reg. 61 (January 3, 2006)

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(2) Examination

The USPTO proposes

– to focus initial examination on claims designated by applicant as representative claims.

– to defer examination of non designated claims until the application is otherwise in condition for allowance.

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(2) Examination

What are the “representative claims”?

- all of the independent claims; and

- certain designated dependent claims

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(2) Examination

• If the Applicant fails to expressly designate any dependent claims for initial examination, the USPTO will initially examine only the independent claims.

• Even if there are 10 or fewer claims in the application, the Applicant must expressly designate dependent claims for initial examination.

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(2) Examination

• The mere presentation of a dependent claim is not a designation for initial examination.

• A designated dependent claim (including a multiple dependent claim) must depend only from an independent claim or from another designated dependent claim.

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(2) Examination

Example:

Claim set has 3 independent claims and 20 dependent claims.

– The 3 independent claims are automatically selected for initial examination.

– Applicant can designate 7 of the dependent claims.

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(2) Examination

• A claim that refers to a different statutory class of invention will be treated as an independent claim even if written in dependent form.

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(2) Examination

An “Examination Support Document” (ESD) under 37 C.F.R. 1.261 must be submitted if

• There are more than 10 independent claims

• Applicant desires initial examination of more than 10 claims

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(2) Examination

If the total number of independent claims (or independent plus designated claims) exceeds 10, and no ESD has been submitted, and it appears this was inadvertent:

– Applicant will be sent a notice with a 1 month period (not extendable) to supply the ESD;

– Cancel claims/rescind designation; or

– Submit a suggested restriction accompanied by an election without traverse to an invention drawn to a group with fewer than 10 claims.

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(2) Examination

A restriction may still be required.

• If election results in withdrawal of independent or designated claims, Applicants may designate additional representative claims for initial examination so long as the total of all claims does not exceed 10.

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(2) Examination

Markush Claims

• The Office is soliciting comments on how to handle Markush claims under the new practice

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(2) Examination

One Markush option:

Each alternative would be counted as a separate claim for examination purposes unless:

– The Applicant shows that each alternative includes a common core structure AND common core property or activity, in which the common core structure constitutes a structurally distinctive portion in view of the existing prior art and is essential to the common property or activity.

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(2) Examination

“Examination Support Document” (ESD) must include:

(1) a statement that a preexamination search was conducted,

– an identification of the field of search by class and subclass

– the date of the search where applicable

– for database searches, the search logic or chemical structure or sequence used as a query, the name of the files searched, the database service and the date of the search

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(2) Examination

The preexamination search must include:

• US patents and patent application publications• Foreign patent documents• Non-patent literature

– Unless the applicant can justify why no references more pertinent than those already identified are likely to be found in the eliminated source

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(2) Examination

• The preexamination search must encompass all of the features of the independent claims and must cover all of the features of the designated dependent claims

• A search report from a foreign patent office will not per se suffice – it must satisfy all of the search requirements set out in Rule 261

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(2) Examination

ESD requirements (cont.)

(2) An IDS

(3) An identification of all the limitations of the independent claims and the designated dependent claims that are disclosed by the references cited in the IDS

(4) A detailed explanation of how each of the claims are patentable over the references

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(2) Examination

ESD requirements (cont.)

(5) A concise statement of the utility of the invention as defined in each of the independent claims

(6) A showing of where each limitation of the independent claims and the designated dependent claims finds written description support in the specification of the instant application and any benefit application

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(2) Examination

Proposed 37 C.F.R. § 1.133

• Would allow the examiner to request an interview with applicants before the first office action

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(2) Examination

Proposed 37 C.F.R. 1.704

• Failure to file an ESD when necessary is a circumstance that constitutes a failure to engage in reasonable efforts to conclude processing or examination of an application –thus affecting patent term adjustment.

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(2) Examination

The proposed examination rules would apply to

– any application filed on or after the effective date of the final rule; and

– to any application in which a first office action on the merits was not mailed before the effective date of the final rule.

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(2) Examination

• Applicants who filed before the effective date of the final rule would be allowed to submit either an ESD or a new set of claims to avoid the need for an ESD.

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(2) Examination

Strategy –new applications

(1) Consider paying for extra groups in the PCT so that all the claims are searched and use Chapter II and the US IPEA to get an extra “round” of examination – preferably interviewing the US Examiner.

(2) Consider filing multiple applications (with a terminal disclaimer); each with claims of a different scope if you have a reason why the cases should be kept separate.

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(2) Examinations

Strategies for New Examinations (cont.)

(3) Draft claim sets now that are amenable to review under the proposed regulations.

(4) Protect members of Markush groups by also having separate dependent claims to the most important members of the Markushgroup.

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(2) Examination

Recommendations – Pending Applications

(1) Review portfolios for applications due for a first office action on the merits this year – work with the examiner to obtain a first office action on the merits before a final rule would take effect (maybe never but, if the rules were to be finalized, probably not until late summer at the earliest).

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(2) Examinations

Strategies – Pending Applications (cont.)

(2) Consider “mega” interview on all members of a family of cases so as to expedite first office actions in unexamined members of that family.

(3) Minimize time in OIPE by electronic filing applications likely to go to art units with little backlog (E-file using the new EFS-Web –general release date March 17th).

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A Shooting Gallery for Patents

• Consider a world in which these rules were made final, and also post-grant oppositions were allowed.

• One could oppose an issued patent knowing that the patentee probably had no continuation application on file to act as a safety net.

• The patentee would be pressured to take only the most narrow of claims to survive opposition – much more so than if the patentee had a “safety net” continuation application on file.

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Final Rulemaking Implementation

John Doll: Expects final rulemaking in about 4 months (around September)

There will be a 30-60 day (and maybe a 90 day) period before the final rule takes effect.

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Possible Compromises

• Retain current divisional practice (i.e., where it is not required to file all divisionals off the application in which the restriction was made

• Retain unrestricted RCE practice and allow 2 Con/CIP before a petition is needed

• Expand ability of 3rd party submissions

• Examine all claims but increase excess claim fees

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Other Potential USPTO Options• Examination options:

– Deferred examination (up to 3 years) – Accelerated examination (allowance in 12 months)– Suite of options for examination with varying levels of examination and

enforcement rights

• Pre-Grant Opposition Pilot Program

• Increase fees for successive continuations/RCEs

• Community Patent Review

• Permit applicant requested pre-first office action interview

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* Credits: Several slides and statistical data are taken from presentations by John Doll and James Toupin of USPTO and made available to the public in February 2006.

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THANK YOU!

Michele A. Cimbala, Ph.D., [email protected]