USPTO Issues New Rules Update

Although the rule changes are complex and lengthy, we will provide only highlights of the rule changes here, but we encourage you to read the complete rules package available at www.uspto.gov. Additionally, our clients are encouraged to contact us to discuss your cases and how these rules impact pending cases and future filings. This discussion provides an overview with general suggestions.

Interpretations by the Patent and Trademark Office, as well as our advice, will evolve.

Highlights of Changes and Strategies

1. Limitation of Continuations (2+1)
A limit has been defined to prevent an applicant from filing an unlimited number of continuing applications, i.e., continuations, continuation-in-parts, and divisionals. Under the new rules for a given "patent family," applicants will generally be limited to 2 continuing applications. A continuation-in-part is defined as a continuing application that discloses subject matter not disclosed in the parent application and thus will be counted as a continuation. A patent family will also be allowed only one RCE. Thus, the new limitation of 2 continuing applications and 1 RCE for each patent family is referred to as "2+1". Divisional applications that are filed voluntarily will count toward the 2 continuing application limit.

2. Petition to Exceed 2+1

If an applicant needs to file another continuation or RCE, beyond the 2+1 limit to enable the introduction of an amendment, argument or evidence, then a petition will be required. The petition and corresponding fee must include a showing of why the desired amendment, argument or evidence sought to be presented "could not have been submitted during the prosecution of the prior-filed application or prior to the close of prosecution in the application." Based on the USPTO's question and answers document posted on the USPTO website, it appears that the showing can be denied based on an Examiner's subjective belief that the material "could have been" submitted earlier. Consequently, our belief is that the petition will be difficult, at best, to obtain (see comments 84-102 and the PTO's response on the USPTO website). Surprisingly, the USPTO also indicated that the submission of an information disclosure statement (IDS) would not automatically cause a petition to be approved (See the "Question and Answer, D5" document posted on the USPTO Website). As such, no one situation will be automatic, but instead a factual case-by-case basis analysis will be applied.

3. One More Exception

In cases where an applicant is at the limit of 2 continuing applications as of August 21, 2007, the rules will allow for the filing of "at least one more" continuing application without a petition and showing. For instance, if the applicant is already at the limit of 2 continuing applications, the applicant is allowed to file any number or continuations for the patent family before November 1, 2007. However, if the applicant files at least one more continuation before November 1, 2007, the applicant will not be allowed to file one more after November 1, 2007. Thus, if an applicant is at the limit of 2 continuing applications on August 21, 2007, a determination should be made if the applicant wants to use the one or more continuing applications before November 1, 2007, or wait until after November 1, 2007. In many respects, continuations will become valuable tools during prosecution, as a given family will not be allowed more than one RCE. If an RCE was used in a patent family, then another option is to use one of the continuing applications to facilitate further prosecution. This use of a continuing application is referred to by the USPTO as a "streamlined continuation application", so examination will be placed back in the Examiner's "Regular Amended" docket for expedited handling. Of course, this uses up one of the available continuations.   

4. Divisional Practice

Divisional applications are only allowed if the USPTO declares that a given patent applications includes more than one invention. An applicant can then choose to prosecute a single invention from the multiple inventions in the original application as a divisional application and each divisional application is given a family limit of 2+1. If a divisional application is filed without a declared restriction, then the divisional will be considered a continuing application. However, if the family already has 2 continuing applications, then the filed divisional will be invalid. Many cautions are given in the rules regarding improperly filed divisional applications. Namely, if the USPTO issues a restriction, but later rejoins the inventions, then any filed divisional will be considered a continuing application and may be invalid. Likewise, if the USPTO issues a restriction for a genus-species, the Office could potentially allow a generic claim. If the generic claim is allowed, then the species could be rejoined by the Office. Any divisional filed for the species claims would then not be proper, thus converting it into a continuing application, which in turn counts toward the limit of 2 continuing applications.

5. Suggested Restriction Requirement (SRR)

Divisional application families have the benefit of its own set of continuing applications under 2+1. For this reason, it is generally to the client's benefit if the USPTO issues a restriction requirement. If a client knows that a currently pending application does in fact contain multiple inventions (and a first action on the merits (FAOM) has not been issued, the application should be amended to include claims to the different inventions. Additionally, the applicant should file a suggested restriction requirement (SRR), identifying to the Office which claims refer to each of the distinct inventions. It is unclear how the Office will handle an SRR, as one goal of the Office is to reduce the number of applications filed and it is at the Examiner's discretion as to whether to follow the SRR . Although, if the application does indeed include multiple applications, the Examiner will be required to issue an Office Action that addresses the features of each invention. One other consideration applicants must be aware of is the fact that filing an SRR may be used as an admission that the claim sets are patentably distinct and may prevent coverage under the doctrine of equivalents in litigation.

6. Limitations on Claims 5/25, ESD

For each patent family having patentably indistinct claims, the number of claims cannot exceed 5 independent claims and 25 total claims("5/25"). If the claims at any time exceed 5/25, then the Applicant will be required to file an Examination Support Document (ESD). An ESD is a document that requires the applicant to perform a detailed search of each claim, produce search strategies used, map each claim to the prior art revealed from the search, and present a detailed analysis. The exercise of preparing an ESD requires the applicant to essentially make admissions against their claims on the record, create detailed prosecution history estopple, and spend substantial attorney time traversing the very statements made in the prior art mapping. In addition to being an exceeding onerous task that requires admissions against interest, preparing an ESD is sure to substantially increase an Applicant's attorney fees and search consulting fees. Simply for the avoidance admissions against an Applicant's interest, we would strongly discourage clients from filing an ESD simply to add more claims. If the claims exceed 5/25 in a patent family, it is recommended that the clients consider canceling claims in the patent family, if the applications in the patent family are patentably indistinct. If the claims in given applications of a patent family are patentably distinct, then the 5/25 will only apply to the application that holds the patentably distinct invention. For this reason, the USPTO notes that it is possible to have a total of 15/75 in a given patent family, as each of the initial application, and each of the two continuations can have 5/25, so long as the inventions in each of the two continuing applications and the initial application are patentably distinct. If at anytime during the prosecution of a patentably distinct application, an amendment makes any one claim patentably indistinct, then the 5/25 limit will apply to both the application in which the amendment was made and the other patent in the patent family. Thus, claims in each patentably distinct family should be monitored carefully to avoid triggering the limit of 5/25 for multiple applications that, prior to the amendment, were patentably distinct. If patents or patent applications become patentably indistinct, and the applicant does not cancel claims to be below 5/25, then the applicant will have to prepare an ESD for each of the applications. Any pending application in which a FAOM has already been received, or in which an FAOM is mailed before November 1st, is exempt from the 5/25 limit.

7. Patentably Distinct Claims

The USPTO is attempting to prevent applicants from filing multiple applications with the same specification, and with substantially the same claims. In essence, the USPTO desires that the applicant performs all the planning/preparing up front and limits the number of bites out of the apple.

8. Identification Burden on Clients

Unfortunately, the USPTO has applied a heavy burden on applicants to report related cases and analyze related cases to ensure that they are patentably distinct. (Rule 1.78(f)(1)) The rules require applicants to identify all applications or patents that:
"        have filing dates or claim benefit to filing dates that are the same date or within 2 months of each other taking into account the actual filing date, the foreign priority date, the US priority date, and any filing date of a prior-filed provisional or nonprovisional application for which a benefit is claimed; and
"        name at least one common inventor; and
"        are owned or subject to an obligation of assignment to the same person or entity--at the time the invention was made (as defined in 103(c) and MPEP 706.02(l)(2)).
For applications filed on or after November 1st, the reporting must be done within the later of four months from the actual filing date of the application, or 2 months from the mailing date of the initial filing receipt. For applications filed before November 1st, the information must be submitted by February 1, 2008.
However, it should be noted that due to the 2 month window before and after the filing date, the applicant must wait for two months after the filing date to ascertain whether any additional applications fall within the window. Accordingly, it is not possible to actually identify these applications until after 2 months of the filing, thereby placing a restrictive 2 month reporting deadline on clients. The clients are typically the owners of this information and will have to track and report the information to the prosecution firms, as any one firm will not have a complete picture of all of the cases that will have to be identified (i.e., noting that most companies use more than one patent firm).

9. Rebuttable Presumption Required

The rules create a rebuttable presumption under Rule 1.78(f)(2) that an application contains at least one claim that is not patentably distinct from a claim in another pending application, or an issued patent, when the other application or patent has the same priority or filing date, at least one common inventor, and substantial overlapping disclosure (§112 support is provided for at least one claim).
The presumption can be rebutted by filing a terminal disclaimer, or by explaining why the claims are patentably distinct. The rebuttal must be filed by the reporting due date of February 1, 2008 for applications existing before November 1, 2007, or within 4 months of filing an application after November 1, 2007.   
If the presumption cannot be rebutted, then the applications affected will be subject to the 5/25 total, for all of the claims. Thus, if the presumption cannot rebutted due to some claims being patentably indistinct, it would be advisable to cancel those claims so that the affected cases no longer have any claims that are patentably indistinct. If claims are not cancelled, and it is not possible to rebut the presumption, and the total claims exceed 5/25, then an ESD will be required in both applications.

10. Recommended Action to Take NOW

A. Begin to define your identification strategy to comply with Rule 1.78(f)(1) and 1.78(f)(2). This will require consultation with multiple firms, if an applicant uses more than one firm. Additionally, consider obtaining information from the USPTO database, as many current docket system do not contain all information necessary to complete the identification. Clients are reminded that, in the past, it was not necessary to docket each and every priority in a string of priorities, as the critical priority date to docket was for foreign filing. However, now, all priorities are critical. For this reason, serious consideration should be given to this reporting requirement to comply with the rules.

B. Instead of filing a nonprovisional application, file a provisional application for each new case. The provisional application should be a "complete" case, as if it were to be filed as a nonprovisional. If innovation happens during the 1 year period from the filing of the provisional, then consider updating the provisional before the filing of the nonprovisional or consider filing another provisional. By the 1 year date from the earlier provisional, file the nonprovisional application, claiming priority to all provisionals in the window, provided updated provisionals were filed.

C. Consider filing a PCT application as the first application, instead of the nonprovisional application.

D. Consider a strategy of filing a complete provisional application followed by a PCT application by the 12 month date. This will allow you to get a Search and Written Opinion in the PCT filing. But, DO NOT file a Demand in the PCT, or the nonprovisional filing off of the PCT will count as a continuing application. Another benefit of this strategy is that the PCT Search and Written Opinion will provide the Applicant with the opportunity to make adjustments to the claims in view of the Search Report art, and thus place the very first nonprovisional application filed in the US (by 30 months from the provisional filing) in a more advanced "examination ready" position. Still further, the PCT Search Report will provide clients with a list of art that can be filed in an information disclosure statement (IDS) at the time of filing the first nonprovisional application. This "pre-processing" of the application during the provisional period and PCT period, should certainly place the patent application in a better position for examination during the pendency of the nonprovisional application.

E. Before November 1, 2007, consider reviewing all cases with a final rejection that have already used an RCE. If an RCE was already filed in the patent family, you will not be allowed to file another RCE. Thus, it is critical that any case under final, for which an RCE was already filed, that consideration be given to the filing of an RCE with an amendment. Otherwise, the patent family having no more continuations will be forced to Appeal with claims that may not actually be ready for Appeal. If, however, your application family was at the limit of 2 continuations before August 21, 2007, no continuation was filed before November 1, 2007, then you will have "one more" continuation available to make claim amendments before being forced to Appeal.

11. Conclusions

This rule change summary is not intended to be exhaustive of all rule changes and the nuances associated with the rules, interpretations and unknown mechanics of implementation by the USPTO. The USPTO has published at www.uspto.gov the final rules, informative slides, question and answer documents and other materials. These materials provide a complete outline of the many requirements that simply cannot be covered in this brief client letter. As a result, you should consider a complete study of the rules before implementing any strategy that can affect your intellectual property. Clients of Martine, Penilla & Gencarella, LLP are encouraged to contact us to evaluate your particular circumstances.

Past News:

• End of Year Update: Proposed Rule Changes
  
• Patent Law Updates-Status
  
• More Exam Cycles; More RCEs
  
• Malaysia added as PCT Contracting State
  
• Firm Update
  
• 2004 PCT CHANGES, Pros AND Cons
  
• EPO ABOLISHES 21 MONTH NATIONAL FILING DEADLINE, AND OTHER PCT MEMBER COUNTRIES TO FOLLOW
  
• Japan Shortens Time for Requesting Examination
  
• Patent Law Update: December 2000