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October 23, 2008

Comments

Kevin,
Just curious - are any of these professors licensed patent practitioners? Has any of these professors ever drafted or prosecuted a patent? Invented anything?

Ah, the old "you're not a patent lawyer, you surely can't understand" argument. Craig Nard and John Thomas are patent attorneys.

That aside, it's not clear why it matters here - this is an administrative law question. Even if these rules make patent attorneys and inventors really, really sad that doesn't mean that the PTO doesn't have the power to implement them. Indeed, the rules allow one to explain why a continuation is necessary - why is it that this is a substantive change? You can't get a reissue unless there was a mistake, so how is it that continuations should be substantive different just because a claim was kept in play rather than the entire patent issuing?

On a side note, I've represented plenty of inventors and worked side by side with patent attorneys in securing their inventions - I know why inventors might not want the rules, but that doesn't mean the rules are illegal.

Michael:

A great deal of GSK's argument would have been foreclosed if the rules were not made retroactive. But that would not have satisfied the real reason for the rules, reducing the backlog. If the rules had been made prospective, the backlog would have doubled or tripled, because every applicant with the economic wherewithal would have filed multiple continuations.

There are several problems with the rules besides the issue of whether the PTO has the authority to implement them. The philosophical grounds for the rules (not the practical reasons for them) are wrong - the idea that continuations lead to submarine patents ala Lemelson is an anachronism in view of the change to a 20-year patent term under GATT. Moreover, the idea that continuations are a burden to examiners is contrary to reality - most examiners will tell you that continuations, and the relatively less time they need to spend examining them, enable them to devote more time to new applications. Since PTO management hasn't revised the time allocations for examination in a generation, examiners don't have enough time to do a proper job (which leads to the need for continations). And the idea that an applicant can "wear down" an examiner is a fantasy of a non-practicing law professor; anyone who has ever actually practiced knows this doesn't happen. (Do the thought experiment - what possible motivation would an examiner have to allow a case improperly, since a continued stream of continations gives them the same "count" benefit as a new application, + gives them more time to examine new applications, + avoids a negative quality review assessment for allowing the case when they should not have.)

In addition, proponents of the rules, like the law professors, ignore the fact that the statistics involve double counting - RCEs are counted as continuations, even though filing an RCE "abandons" the original application - at best every RCE merely replaces one application with another, a net increase of zero. But by counting RCEs as "new," the Office can exaggerate the size of the problem.

Finally, divisional applications are just as big a "problem" and just as much a source of the backlog as continuations and RCEs, and the number of divisionals is almost completely under control of the Office. Even a casual perusal of pending applications shows how frequently one application is split into several, contributing to the problem. Now, this may be legitimate, and may reflect the lack of time examiners get to perform an application, but rather than tackle these issues this administration in the Office decided on these rules.

And remember, Judge Cacheris only ruled on one of the many grounds GSK and Dr. Tafas raised. It is very unlikely these rules will be implemented, no matter what the CAFC decides in this case.

Thanks for the comment

"A great deal of GSK's argument would have been foreclosed if the rules were not made retroactive."

Fair enough. Note that the professor's brief takes no stance on the retroactivity issue (in other words, some of us agree that this is a problem).

As for the philosophy - maybe so, thought it is irrelevant to the ability of the administrative agency to interpret the statute, even for the wrong reasons so long as they are not arbitrary and capricious (and I don't think difference in philosophy applies).

Finally, I don't think the concern with continuations (for me at least) is with extending the term and I agree that continuations are not necessarily as costly as argued, though I have to believe that the PTO is in a better position to judge this than any of us are.

I think the problem with continuations is with extending the scope of the claim in a manner that would never fly if it were a reissue. What happens is a claim that is arguably enabled and (barely) described but that is designed to cover after invention improvements. Even worse is the CIP where new description is added with a disingenuous argument that the broadened claim is covered in the original specification and not the new matter.

Surely there is no argument that this doesn't happen - it happened in O'Reilly v. Morse! (though that was reissue) - it's the oldest game in the book, and because cracking down on the written description requirement is difficult, I don't think that having inventors explain why it took three continuations to figure out the broadest claim scope is unreasonable.

Dear Michael:

We agree that it should be impermissible for an applicant to extend the scope of a claim in a continuation that would not be permitted in a reissue. As a biotech patent attorney, I have more respect for the rigor with which the written description requirement can be applied. In addition, cases like Sitrick v. Dreamworks or ATI v. BMW or Liebel-Flarsheim v. Medrad suggest that enablement is also a reasonable tool for preventing the abuses you mention.

The problem with your assumptions is that it takes three continuations for an applicant to figure out the broadest claim. Under this administration, the typical course of examination is 1) very bad first examination; 2) response; 2) final rejection ignoring most of the response; 3) RCE and further response; 4) narrower but equally bad rejections; etc. Whether this is due to patent examiner inexperience or lack of time or management mandating lower allowance rates doesn't matter. The fact is that the applicant frequently knows exactly what s/he as invented. The "new" rules would just make it easier for an examiner to take the bureaucratic option - saying NO is always safer - and this, I believe, would harm innovation.

You have recognized an important, but I submit infrequent, problem, and the PTO's proposed solution is vastly in excess of what is needed to solve the problem. There has to be a better way.

Thanks for the comment.

Michael,

I've got to side with Kevin on this one. In my opinion, the USPTO hierarchy is delusional to believe it can win this appeal. The Federal Circuit would have to have "stare decisis" amnesia to rule in favor of the USPTO. The GSK brief in particular points out the serious flaws in the USPTO reasoning, including the fact that the USPTO knows it has no authority to enact this Rules package (and is entitled to no Chevron deference).

On a practical note, this Rules package, if enacted, would be a prosecution and litigation nightmare. Particularly bad is the ESD (known to us as the "Document of Doom" or "Estoppel Suicide Document"). As GSK rightly points out, feature number 1 (a mandatory search) is not only contrary to Federal Circuit law, but impossible to comply with. You may not have been accused of "inequitable conduct" but I have (twice in litigation) and the ESD is a guarantee that there will be more charges of "inequitable conduct." And I speak as one who is in their 32nd year of practice.

Since the IP professor amicus brief brings up the applicability of the APA, particularly disturbing to me is how the USPTO hiearchy has flouted the APA, RFA and OMB Rules. Go read the Polestar Capital amicus brief in support of the GSK/Tafas motion for SJ which gives a very unflattering (but accurate) view of how the USPTO didn't follow the APA, RFA, and OMB Rules. In fact, that's why the other Rule packages, including the "form over substance" appeal Rules are currently in limbo.

At least it gives us insight into the next Administration's patent policy.

Arti Rai of Duke is Obama's patent adviser.

"The Law Professors argue that Judge Cacheris "wrongly assumes that the rules in fact represent a drastic departure," contending that 'the PTO already uses the doctrine of prosecution laches to limit continuation applications' (as a result of the Federal Circuit's decision in In re Bogese, 303 F.3d 1362 (Fed. Cir. 2002))..."

How many times, other than Bogese, has the PTO used the doctrine of prosecution laches to limit continuation applications? Take a wild guess.

Bogese does not support the PTO's position. The facts involved in Bogese were so extreme as to be singularly unique.

The PTO's reply brief cites to some case involving the FCC rejecting "carelessly prepared" applications. That's ridiculous. The PTO has no evidence that 2nd, 3rd, etc. continuation applications are "carelessly prepared." In fact, those applications are, generally speaking, much more carefully prepared.

When the PTO loses their appeal, let's hope they come to their senses and approach the applicants (aka their "customers") and the patent bar in a far less hostile and more constructive manner.

"At least it gives us insight into the next Administration's patent policy.

Arti Rai of Duke is Obama's patent adviser."

Anon,

Not a comforting thought I can assure you.

"Indeed, the rules allow one to explain why a continuation is necessary - why is it that this is a substantive change?"

Uhm, because Section 120 doesn't require an explanation.

"You can't get a reissue unless there was a mistake, so how is it that continuations should be substantive different just because a claim was kept in play rather than the entire patent issuing?"

Well, probably because most applicants/patentees only resort to a reissue if they have no continuation pending. In other words, a reissue is different because competitors have an expectation that a patent that has no pending continuations can only be corrected by reissue, and cannot be broadened after two years. And they may have intervening rights. If competitors know that a patent has a continuation pending, they don't have any of those expectations.

"Even worse is the CIP where new description is added with a disingenuous argument that the broadened claim is covered in the original specification and not the new matter. Surely there is no argument that this doesn't happen"

I would argue with that. Why would anybody file a CIP and then claim subject matter that was only supported by the parent application?

Can you cite us an instance, with the exception of maybe Lemelson, in which this oldest game in the book was played?

"...and because cracking down on the written description requirement is difficult..."

Why is this difficult? Are you telling us the PTO is a super competent administrative agency, but can't tell its knee from its elbow when it comes to written description?

Sorry Professor, but you really don't understand the issues.

The amicus brief of the professors is a breath of fresh air. They clearly have this right. The patent bar has a vested interest in the present system, but the public has an interest in a more efficient and fair patent examination process. Clearly, these changes are procedural--not substantive. These changes do not impact the conditions for patentability (i.e., novelty, non-obvious, enabled, operative, written description, utility, etc.) The whiners in the patent bar need to get a grip on reality---Chevron deference clearly applies to this case, and the rules by any measure are reasonable. Applause to the law professors for bringing common sense and fairness into the discussion.

With due respect, Lemley, Rai and Thomas are the worst exemplars of why practicing lawyers regard ivory tower [fill in the blank] with such disdain.

To take one of their most baffling mischaracterizations, this case is *not* about "repeated filing of applications directed at the same subject matter." If it's "repeated ... same subject matter," then Bogese applies. Had the rules been tailored to "repeated ... same subject matter" continuations, no one would be complaining.

The fight is about what the rules actually say. The rules, if one bothers to read them, limit continuations to *different* subject matter. That's the billion dollar dispute.

Good grief.

"Uhm, because Section 120 doesn't require an explanation."

This, I think is at the core of the disagreement. The PTO puts a gloss on all sorts of sections in the act, as does any administrative agency. The rules here are one such gloss, and I don't find the argument that 120 is sacrosanct while every other section gets a gloss to be terribly convincing.

"I would argue with that. Why would anybody file a CIP and then claim subject matter that was only supported by the parent application?"

It's a waffle - you make the broadest claim possible which arguably but ambiguously is supported only by the new matter, and then in litigation claim priority to the earlier date. If, however, you run into trouble there, you live with the later date. The battle is about the invention date for 102 prior art where the amendment was really an afterthought designed to cover someone else's invention.

And yes, I've seen it in litigation (both using it in our favor as a plaintiff and as a defendant having it used against my client). One instance? Morse - though that was a reissue, and your distinction that people are put on notice because there is a claim still in play is unpersuasive to me - I am still at risk that the patentee will look at my product and attempt to get it covered somehow. I still have no idea whether I might have litigation down the pike.

A modern example is PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299 - where the patentee tried to rely on an earlier filing date when the only support for the claims appeared as new matter.

I suspect that when prosecuting attorneys say that one doesn't understand the issues, that the blinders are on for prosecution only - the way this stuff plays out in litigation is way, way different, and I did it for a lot of years prior to joining the academy. I understand why prosecuting attorneys feel the way they do on these issues - you have a job to do for your clients, and there are many reasons why continuations and CIPs are necessary and good. I'm somewhat surprised at the either feigned or real ignorance of the issues that lead to my contrary views.

Dear Michael:

Of course, the problem is that propensity of patentees to use their claims as a "nose of wax" in litigation won't be prevented by the PTO's solution. And similarly, those of us who work (at least occasionally) on the prosecution side of the practice are surprised at the lengths attorneys with primarily litigation experience will profess feigned or real ignorance about why the rules will neither solve your problem or promote innovation.

Thanks for the comment.

"And similarly, those of us who work (at least occasionally) on the prosecution side of the practice are surprised at the lengths attorneys with primarily litigation experience will profess feigned or real ignorance about why the rules will neither solve your problem or promote innovation."

Well, fair enough. I have no idea whether these rules will work. My point is simply that the PTO is entitled to give them a shot and see.

With respect to the nose of wax, it goes beyond litigation - when claims are added late in the prosecution process (and often to cover competitors' products), molding is happening during prosecution, not litigation. If it's done right (and I'm not saying it is always on purpose) is ALSO leaves the ambiguity in litigation. I think that there should be extra vigilance about such claims, keeping in mind that if the inventor truly invented the broad claim, then the inventor is entitled to that claim.

Thus, I tend to think other policies that you would hate would actually have more of an impact, like requiring all new claims in a CIP to declare whether or not they are supported by new matter (or to otherwise set a priority date). I would also push for much more rigorous application of written description and enablement requirements to amended and added claims.

Another one that might help is abandoning the broadest reasonable construction rule so that examiners actually apply an ordinary meaning to terms (of course, I am biased toward this one having written an article on it - just my own shameless self promotion).

"I have no idea whether these rules will work."

With all due respect, Professor, that is some painfully transparent disingenuousness on your part.

By the PTO's own admission, 3rd and higher continuations account for only about 7% of the applications that are filed. Eliminating every one of them, which is what the rules would do, barely makes a dent in the million case backlog.

As for whether the rules are substantive, I would ask you: if the PTO decided that you needed to explain why you needed even one application before they would examine your application, would that be substantive?

According to you, section 120 is not sacrosanct. Is section 111(a)? Is section 131?

"I am still at risk that the patentee will look at my product and attempt to get it covered somehow. I still have no idea whether I might have litigation down the pike."

Eliminating 3rd and higher continuations will not solve this problem. You know that. I know that. The PTO knows that. And even if it would solve the problem, you need to answer the question: is this problem one that the PTO should be trying, or empowered, to solve?

The causes of the huge backlog and pendency are too numerous to mention here. Chief among them, however, is the abandonment of the rule of law at the PTO in its "quality = reject, reject, reject" directive to the examiners, and the examiner production system which rewards them for doing poor work (and flagrantly ignoring the law) on the first round of examination, which forces applicants to file RCE's and continuations because the petitions and appeals process at the PTO are irreparably broken because of mismanagement and sheer incompetence.

The proposed claims and continuation rules are not going to solve any of these problems. In fact, they will actually exacerbate them.

As an ex-examiner and now as a practicing patent attorney, I take issue with Professor Risch's statement that "I have to believe that the PTO is in a better position to judge this than any of us are." When I was at the PTO, it was clear to the examining corps that most of the PTO's upper management was incompetent. Even the best of them were trying to use changes in examination/rules/practice to paper over the real problems.

As other people have noted, the two biggest problems are that (1) there has been no change in the examiner production system in a generation, with quantity not quality being rewarded, and (2) many good examiners leave because management treats examiners badly and are incompetent to boot. Over the past few years, I believe that problem (1) has led first to allowing everything then to allowing nothing because having management tell you to allow (or reject) everything is easier than actually doing a good examination. Problem (2) has led to having a dearth of experienced examiners who are capable of doing training and examining applications with a practiced eye. Further, when management doesn't treat examiners as professionals but rather as low-grade bureaucrats, the PTO will tend to lose those people who are good and retain those who really do see themselves as low-grade bureaucrats who will do whatever management tells them to do.

I think the problem of continuations and CIPs being used to "wear down" the examiners is real but not a huge one. Certainly, I have seen patents issued that shouldn't have been, but it is just as often as not that the allowance comes on the first application as on the third continuation. I have also seen the situation where later added claims were patented in order to cover a competitor's commercial embodiment. In some cases, the claims were legitimate -- there was sufficient written description and enablement for it. In other cases, the claims weren't legimately granted, but the problem was that the examiner didn't properly reject the claims on written description and/or enablement. Examiners have the tools to make these rejections, but they have to have sufficient time and be sufficiently motivated (regarding themselves as professionals and the PTO as a well-run organization) to make these rejections and to issue good patents.

Both in my current career as a biotech/pharma practitioner and as an ex-examiner, I know there are plenty of good examiners at the PTO. Unfortunately, they aren't rewarded. If they take the time to do a good job, they don't have the "quantity" to get good reviews or bonuses. No wonder so many of them leave. What PTO's management should do is to talk to those good examiners and talk to examiners at places like the EPO (where they are valued, paid well and do a good job) and figure out how to make the PTO better for examiners and examination.

Don,

I just saw from AIPLA Direct that the PTO announced they won't be finalizing the IDS or Markush Group Rules. May be the PTO hierarchy sees the "handwriting on the wall."

EG:

Thanks for the heads up. Of course, David Boundy and Richard Belzner are probably not surprised, seeing as how hard they have fought these rules at OMB.

Don

If you have no idea what these rule changes will do, and the overwhelming majority of the Patent Bar thinks they will be horrible, maybe you should reconsider your support?

At a minimum you have to acknowledge that the PTO's claim to the OMB that the new rules imposed no financial cost and therefore did not need a fiscal impact analysis and OMB review was purely false. At a minimum, the rules must be sent back for true OMB evaluation, with a financial analysis from the PTO.

If the PTO really wants to reduce backlog they'll update the production numbers to correspond to the fees paid by applicants. If I'm paying twice as much to have forty claims examined, the Examiner should be given twice as many points. It's only logical. The backlog is strongly based on long cases that the Examiners don't want to look at. I can tell you with 99% accuracy how long my case will be in the PTO before examination simply by looking at length and number of claims. If you restrict your case to 20 pages, 20 claims, it'll get examined in 2 years. If it's 40 pages, 40 claims, it'll take 3 1/2. Because the Examiner gets the same amount of time, and same points for examining these two cases, it only makes sense that she'll take up the short one first.

And last but not least, I do wish the academics filing these amicus briefs bothered to talk to at least one actual Examiner. Who can explain why RCEs are the overworked examiner's best friend. Same point as a new case, and not only is the search already done but you're familiar with the Specification.

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