An Analysis of the New Rules: 37 C.F.R. § 1.78(d)(1)(i) & (vi): PCT Practice

    By Donald Zuhn --

On August 21, 2007, the U.S. Patent and Trademark Office published new rules concerning continuation and claims practice that will undoubtedly have a profound effect on the way patent attorneys and agents prosecute applications before the Patent Office.  In view of the 128-page Federal Register notice regarding the new rules, the Patent Office's nearly two hour webcast on August 23, 2007 (and the webcast's accompanying 109-page presentation), and the Office's 45-page list of Frequently Asked Questions, Patent Docs believes it may be helpful to examine the rules piece-by-piece in an attempt to identify areas where patent attorneys and agents will need to modify their patent prosecution practice.

37 C.F.R. § 1.78(d)(1)(i) & (vi):

A Patent Docs reader recently asked whether a Demand filed with the International Preliminary Examining Authority, requesting an international preliminary examination, would constitute a member of an application family.  In other words, the reader wanted to know whether the Demand would cut into the three-application limit imposed by the new rules - i.e., whether the Demand would, in effect, constitute the parent application in an application family, with the national stage application constituting the first continuation permitted under the new rules, and a continuation filed off the national stage application constituting the second, and final, continuation permitted under the new rules (absent a petition and showing).

This is an important question, since many biotech and pharma patent practitioners have probably begun considering the benefits of filing an international application instead of a U.S. nonprovisional application under the new rules.  One significant benefit of such a strategy is the up to 18 months of additional time for plotting a prosecution strategy that an applicant can obtain by filing an international application and then waiting until the last possible moment to enter national stage in the U.S.

The short answer to the reader's question is that the Demand does not constitute a member of the application family under the new rules.  And now for the long(er) answer.

In normal PCT practice, an applicant usually files a provisional or foreign application, files an international application claiming the benefit of the provisional, and then files a national stage application.  Under such circumstances, Rule 78(d)(1)(i) applies, and an applicant is permitted to file two more continuations that claim the benefit of the national stage application.

In particular, Rule 78(d)(1)(i)(A) states that a continuation or continuation-in-part application can "claim[] the benefit under 35 U.S.C. 120, 121, or 365(c) of no more than two-prior filed applications."  Thus, the second continuation would claim the benefit of the first continuation and the national stage application (and the national stage application would be entitled to the benefit of its international filing date and prior filed provisional/foreign application under the PCT).

In addition, Rule 78(d)(1)(i)(B) states that any application whose benefit is claimed under 78(d)(1)(i)(A) can only be claimed by one other application.  Thus, the national stage application would be claimed by the first continuation and second continuation.  For the purposes of Rule 78(d)(1)(i), neither the national stage application nor the first and second continuations would be claiming the benefit of the international application.  In other words, all of these applications get the benefit of the international filing date and the provisional/foreign filing date through the national stage application, and the national stage application is effectively the parent application in the application family.

The above situation can be illustrated like this:

provisional/foreign application ---> international application --> national stage application --> continuation 1 --> continuation 2

As an alternative to the above scenario, an applicant can decide to file a "bypass continuation" instead.  Rule 78(d)(1)(iv) applies to bypass continuations.  A bypass continuation is a U.S. application that claims the benefit of an international application where the Demand has not been made and the national filing fee has not been paid.  This situation can be illustrated like this:

provisional/foreign application --> international application --> bypass continuation --> continuation 2 --> continuation 3

If Rule 78(d)(1)(iv) did not exist, Rule 78(d)(1)(i) would prohibit an applicant from filing continuation 3 above because it would have to claim the benefit of the international application, the bypass continuation, and continuation 2 (and thus would claim the benefit of three applications).  In particular, continuation 3 would need to claim the benefit of the international application under 35 U.S.C. §§ 120 and 363.

In order to prevent applicants from trying to prosecute a bypass continuation and national stage application in parallel, Rule 78(d)(1)(iv)(A) forces an applicant to choose to prosecute the application family through the bypass continuation or the national stage application, and not do both (i.e., an applicant cannot file a national stage application without filing a Demand and paying the national filing fee, and an applicant cannot choose to go the (d)(1)(iv) route if the Demand has been filed and national filing fee has been paid).

In summary, a bypass continuation is U.S. application that claims the benefit of an international application under 35 U.S.C. §§ 120 and 363 and a national stage application is a U.S. application that claims the benefit of an international application under 35 U.S.C. § 365(c).  Thus, each is a distinct type of application, and each gets the benefit of the international application - albeit in different ways.

In addition, the number of continuations an applicant can obtain (without filing a petition and showing) turns on whether the applicant files a Demand and pays the national filing fee.  There are three scenarios:

1.  If an applicant files a national stage application, the national stage application is the parent application in the application family, and the applicant can file two continuations under Rule 78(d)(1)(i).

2.  If an applicant files a bypass continuation claiming the benefit of an international application on which no Demand was made and no national filing fee was paid, the international application is the parent application in the application family, and the applicant can file three continuations under Rule 78(d)(1)(iv): the bypass continuation being the first of the three continuations.

3.  If an applicant files a bypass continuation claiming the benefit of an international application on which a Demand was made and the national filing fee was paid, the international application is the parent application in the application family, and the applicant can file two continuations under Rule 78(d)(1)(i).  The two continuations would be the bypass continuation and the next continuation filed.

For additional articles in this series, please see:

• "An Analysis of the New Rules: USPTO Releases ESD Guidelines," September 17, 2007
• "An Analysis of the New Rules: 37 C.F.R. § 1.265: Examination Support Document," September 13, 2007
• "An Analysis of the New Rules: Revisions to First Action and Second Action Final Practice," September 11, 2007
• "An Analysis of the New Rules: 37 C.F.R. §§ 1.78(d)(1) and 1.114: Streamlined Examination," September 10, 2007
• "An Analysis of the New Rules: 37 C.F.R. § 1.117: Refund Due to Cancellation of Claims," September 10, 2007
• "An Analysis of the New Rules: 37 C.F.R. § 1.142: Suggested Restriction Requirements," September 6, 2007
• "An Analysis of the New Rules: 37 C.F.R. § 1.114: RCE Practice," September 5, 2007
• "An Analysis of the New Rules: 37 C.F.R. § 1.75(b): 5/25 Limit on Claims," September 4, 2007
• "An Analysis of the New Rules: 37 C.F.R. § 1.78(d)(1): Claims for Benefit of Prior-Filed Applications," September 3, 2007
• "An Analysis of the New Rules: 37 C.F.R. § 1.78(f): Commonly Owned Applications and Patents," August 27, 2007

For additional information on this and other related topics, please see:

• "Rules Challenger Amends Complaint and Withdraws PI Motion," September 11, 207
• "Inventor Sues PTO to Prevent New Continuation Rules from Taking Effect," August 30, 2007
• "Patent Office Provides Recorded Web-Based Discussion of New Rules," August 30, 2007
• "New PTO Continuation Rules: Unfair to Biotech?" August 29, 2007
• "Proposed Agenda for September 12, 2007 Biotechnology/ Chemical/Pharmaceutical Art Group Meeting," August 24, 2007
• "The 'Word' on the New Continuation Rules (from the USPTO Webcast) - Part II," August 24, 2007
• "The 'Word' on the New Continuation Rules (from the USPTO Webcast) - Part I," August 23, 2007
• "New Continuation and Claims Rules Published," August 22, 2007
• "More on M.P.E.P. § 710.06," August 20, 2007
• "Patent Office to Hold Webcast on New Claim and Continuation Rules on August 23, 2007," August 20, 2007
• "Patent Office Announces that New Continuation and Claims Rules Will Be Published . . . Tomorrow," August 20, 2007
• "Procuring Patent Protection from the Present USPTO," August 15, 2007
• "New Continuation and Claims Rules to Be Published in Late Summer," July 25, 2007
• "They Just Don't Get It - 'Patent Reform' at the USPTO," April 11, 2007
• "Patent Applicants Beware: The Rules Are Changing (Again)" Part 1 and Part 2, November 6, 2006

Changes to Rule 78(d)(1)(vi):

(d) Claims under 35 U.S.C. 120, 121, or 365(c) for the benefit of a prior-filed nonprovisional or international application. A nonprovisional application (including an international application that has entered the national stage after compliance with 35 U.S.C. 371) may claim the benefit of one or more prior-filed copending nonprovisional applications or international applications designating the United States of America under the conditions set forth in 35 U.S.C. 120 and paragraph (d) of this section.

(1) A nonprovisional application that claims the benefit of one or more prior filed copending nonprovisional applications or international applications designating the United States of America must satisfy the conditions set forth in at least one of paragraphs (d)(1)(i) through (d)(1)(vi) of this section. The Office will refuse to enter, or will delete if present, any specific reference to a prior-filed application that is not permitted by at least one of paragraphs (d)(1)(i) through (d)(1)(vi) of this section. The Office's entry of, or failure to delete, a specific reference to a prior-filed application that is not permitted by at least one of paragraphs (d)(1)(i) through (d)(1)(vi) of this section does not constitute a waiver of the provisions of paragraph (d)(1) of this section.

(i)(A) The nonprovisional application is either a continuation application as defined in paragraph (a)(3) of this section or a continuation-in-part application as defined in paragraph (a)(4) of this section that claims the benefit under 35 U.S.C. 120, 121, or 365(c) of no more than two prior-filed applications; and
(B) Any application whose benefit is claimed under 35 U.S.C. 120, 121, or 365(c) in such nonprovisional application has its benefit claimed in no more than one other nonprovisional application, not including any nonprovisional application that satisfies the conditions set forth in paragraph (d)(1)(ii), (d)(1)(iii) or (d)(1)(vi) of this section.

* * *

(iv)(A) The nonprovisional application claims benefit under 35 U.S.C. 120 or 365(c) of a prior-filed international application designating the United States of America, and a Demand has not been filed and the basic national fee (§ 1.492(a)) has not been paid in the prior-filed international application and the prior-filed international application does not claim the benefit of any other nonprovisional application or international application designating the United States of America;
(B) The nonprovisional application is either a continuation application as defined in paragraph (a)(3) of this section or a continuation-in-part application as defined in paragraph (a)(4) of this section that claims the benefit under 35 U.S.C. 120, 121, or 365(c) of no more than three prior-filed applications; and
(C) Any application whose benefit is claimed under 35 U.S.C. 120, 121, or 365(c) in such nonprovisional application has its benefit claimed in no more than two other nonprovisional applications, not including any nonprovisional application that satisfies the conditions set forth in paragraph (d)(1)(ii), (d)(1)(iii) or (d)(1)(vi) of this section.