The "Word" on the New Continuation Rules (from the USPTO Webcast) - Part I

    By Kevin E. Noonan --

The Patent and Trademark Office appears to recognize that the recently-published revised rules of practice regarding continuation applications and restrictions on total claim numbers are producing as much confusion as they are anger and concern among inventors, patent holders, and patent practitioners.  (The rules have already provoked a legal challenge filed in the Federal District Court in Virginia, as reported by Patently-O) In an effort to explain the rules (which is likely to be an easier task than justifying them), the Office hosted a webcast today starting at 1 p.m. Eastern time.  Patent Docs will present a series of summaries of the webcast (the PowerPoint presentation for the webcast can be obtained here), and of course reference to the slides supersedes these synopses.  We will also provide some initial recommendations, surely to be subject to refinement and further development as the rules are implemented starting November 1, 2007.

With regard to the "starting" date for applying the rules, the Office has made one controversial decision already: it will permit applications filed prior to August 21, 2007 (the day the rules were published) to have the benefit of one additional continuation application without requiring a showing that the claims in such a continuation could not have been earlier presented.  This move is clearly a way to avoid what many have predicted:  a rush to file additional applications prior to the "effective" date of the rule.  Once again, the Patent Office appears to have violated the spirit if not the letter of the Administrative Procedures Act by making this retroactive application of the rule prior to its effective date.  Anyone who was practicing (or inventing) when the rules changes relating to adoption of the GATT provisions (the change in U.S. patent term from 17 years from issue to 20 years from earliest filing date) in 1995 or those changes caused by the American Inventors Protection Act (AIPA) in 2000 (providing for U.S. patent applications to be published, and more importantly, for the prosecution file histories to be publicly available after publication) will understand the Patent Office's reasoning, regardless of its legality.  Notably, these provisions will also apply to U.S. national phase applications filed after November 1, 2007, and retroactively to any national phase applications filed after August 20, 2007, regardless of the filing date of the International Application from which they derive.

Turning to the most well-publicized of the new rules changes, applicants will be permitted to file two continuation or continuation-in-part applications and one Request for Continued Examination (RCE) for each application "family" (thus limiting RCE practice by requiring a showing, as discussed below, for any "additional" RCE in any related continuation or CIP once a first RCE has been filed in the parent or continuation/CIP application).  The effective date of the RCE practice is November 1, 2007; however, for pending applications having filed at least one RCE prior to that date, filing a subsequent RCE will require a petition and showing (i.e., RCEs needed for consideration of newly-discovered art, etc. should be filed prior to November 1, 2007).  Continuation/CIP applications can be filed "in series," claiming priority sequentially from an originally-filed application, or "in parallel," with each continuation claiming priority to a pending, originally-filed application.

The Office will refuse to acknowledge any priory claim that is inconsistent with the new rules (i.e., if a "third" continuation application is filed without the required petition and showing), and the application's priority date will be the application's filing date.  Since applications in a series of continuing applications frequently depend on a priority claim to avoid anticipation by an earlier-granted patent or U.S. application under 35 U.S.C. § 102(b), failure to recognize the priority claim could be fatal to patentability of such a continuation.

The Office has emphasized that additional RCEs, continuation, or continuation-in-part applications will be available if an applicant can make the appropriate showing.  The procedure includes:

• A petition in compliance with § 1.78(d)(1)(vi) or 1.114(g);
• The petition fee set forth in § 1.17(f);
• An amendment, argument, or evidence; and
• A showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application, or prior to the close of prosecution in the application.

Unfortunately, "evidence" does not include newly-uncovered prior art to be submitted in an Information Disclosure Statement.  Besides a requirement for "reasonable diligence" the Office has provided little guidance on what will be sufficient to make a sufficient showing, and has further compounded this uncertainty by stating that each petition will be decided on a "case-by-case" basis (suggesting that the decisions will be subjective and that whatever standard is developed will be applied inconsistently).

The Office has anticipated that patent applicants would be tempted to increase the likelihood that they would retain (albeit transiently) the potential to pursue all of the claims they are entitled to by statute through the expedient of filing multiple parallel applications containing substantially the same disclosure prior to the November 1, 2007 "effective date." To forestall these efforts, the Office is imposing a requirement (37 C.F.R. § 1.78(f)) that an applicant identify all commonly-owned applications (or patents) having at least one inventor in common and a filing date or priority date within two months of an application's filing date.  The Office must be notified of any such "related" applications or patents within four months of the application's filing date or two months of the receiving a filing receipt for the related application.  The Office will exercise a rebuttable presumption that any such related applications contain at least one patentably indistinct claim (and are thus subject to mandatory joinder as explained elsewhere) if, in addition to having at least one common inventor and being filed/asserting a priority claim within two months of each other, the applications contain "substantial overlapping disclosure" (defined as disclosure that would support at least one claim in the related application).  An applicant can either rebut the presumption (by supplying, for example, the type of reasoning found in a restriction requirement), or submit a terminal disclaimer.

In the "miscellaneous provisions" category, the Office will not "count" an earlier-filed divisional against an applicant if the application was abandoned at the pre-examination stage (the Office used abandonment for failure to comply with a formalities requirement).

Patent Docs plans to provide additional information and commentary on the new continuation and claims rules in future articles.  We also anticipate posts relating to the consequences of the new rules (and ways to avoid them where possible) given sufficient time to review the rules and contemplate their implications.

Comments

[An Interested Party]

At this point, it seems likely that:

1) I will not file applications with more than 25 claims

2)I willfile many, smaller applications, being sure that the subject matter in one application is not disclosed in other, related applications, e.g., the A-ring is aryl in one application, the A-ring is heteroaryl in another, etc. (I do a lot of pharmaceutical work, not sure how the EE, ME, CS people will handle this)

3) appeals will become more common

4) patent prosecution related expenses will go up

5) claims of inequitable conduct will go up - if anyone actually characterizes a reference

6) confusion will reign for a long time

7) shoddy office actions will no longer be tolerated

8) the pre-appeal process will be utilized more often

9) paralegals will spend a lot more time making sure IDS's are filed as soon as possible

and

10) more lawsuits challenging the rules are coming.

[Kevin E. Noonan]

Dear Interested:

I agree. As to your point #7, we are preparing a primer on patent examining procedure (more concise than the MPEP) to identify the types of actions that are objectively "shoddy."

Thanks for the comment.