Rarely does a change in U.S. Patent and Trademark Office (“PTO”) rules elicit much controversy. The issues tend to be technical in nature, their burden falling far more heavily on the lawyers than on patent applicants. Not so for the thick stack of changes enacted on August 21, 2007. The new rules, which will have far-reaching effects throughout the patent process, have attracted widespread attention – much of it negative. Although the rules technically do not go into effect until November 1, 2007, the PTO, eager to avoid a rush of last-minute filing, has made them largely retroactive. It is fair to say that the new regime will require a substantial rethinking of portfolio strategy, and the larger the patent portfolio, the more rethinking will be required.

Basically, the PTO has placed severe limits on the number of patent claims an application can contain; on the number of “continuations” (i.e., patent applications that draw priority from an earlier application) that can be filed; and on the amount of permissible negotiation with a patent examiner before an appeal must be filed or an application abandoned. The hallmark flexibility of the U.S. patent system, in other words, has been substantially curtailed.

Limitations On Continuation Applications

The new rules cluster applications covering similar subject matter into “families,” and strictly limit the number of continuation applications that can be filed in a given family. Continuations have long been employed to serve important strategic objectives, such as broadening patent coverage or tailoring it to cover specific competitive products as they emerge in the marketplace. Prior to August 21, an unlimited number of continuation applications could be filed claiming priority to a parent application.

The new rules, however, generally limit applicants to two continuations and one request for continued examination (“RCE”) per patent family. An RCE is different from a continuation in that it isn’t a new application; rather, an RCE extends the process of negotiation with the PTO as an application is prosecuted. The rules, therefore, limit both continuations and the amount of attention the PTO will devote to an entire application family.

Continuations include “continuation-in-part” applications (“CIPs”), in which new material is added to an existing application. CIPs are often used to cover improvements to an invention. If an applicant wants to file more than two continuations or one RCE within a family, s/he must file a petition with the PTO and demonstrate why the new claims, argument or evidence could not have been submitted earlier. This will be a difficult hurdle to clear.

In order to blunt the sudden impact of the new rules, the PTO will make an exception for application families that already have two continuation filings as of August 21, 2007; in such cases, “one more” continuation application may be filed.

Divisional Applications

Applications claiming different aspects of an invention often encounter “restriction” requirements, by which the PTO limits examination to a single inventive concept. The applicant must choose a single set of claims from among the claim groups identified by the PTO, and pursue coverage for other claim groups by way of “divisional” applications. Traditionally seen as bothersome impositions due to the expense and delay of divisional applications, restriction requirements will now be keenly sought after, since each divisional application counts as a separate family entitled to its own set of two continuations and one RCE. CIP applications claiming priority to a divisional application, however, are not allowed under the new rules.

Limitations On Number Of Claims

The new rules strictly limit the number of claims that will be examined in connection with a particular invention. Spreading claims among multiple applications will not circumvent these limitations; the PTO will aggregate claims to related subject matter across applications. The new rules will require substantial revision to conventional claiming strategies, since the tendency has always been toward more rather than fewer claims. Patent claims stand on their own in litigation: the invalidity of one claim will not affect the validity of any other. Moreover, a patent is infringed if even one valid claim is practiced by a third party. In the past, therefore, patent applications would typically have a broad suite of claims – some broad enough to encompass the likely activity of a potential infringer, and others narrow enough to remain novel and non-obvious over prior art.

Under the new rules, an applicant is limited to five independent claims and 25 total claims (“5/25”) in a single application. The 5/25 claim limitation will apply to any patent application that has not received a first patent office action on the merits before November 1, 2007. Claims in parallel applications sharing at least one inventor and covering similar subject matter may be aggregated by the PTO and held to the 5/25 limitation (although allowed claims will not be counted).

Once again, the PTO has provided a mechanism whereby an applicant can request relief from the 5/25 rule, but it is not attractive. The applicant must file an Examination Support Document (“ESD”), which requires, in part, a pre-examination search and statement with detailed identifications tying prior art to claim limitations. Because of the cost and risk of an ESD, it will likely have few takers. An applicant may, however, file a “Suggested Restriction Requirement” (“SRR”) in order to provoke a restriction, which would multiply the number of families and, hence, the number of possible 5/25 claim sets.

Identification Of Related Patent Applications Required

Patent applicants will be required to identify other patent applications and issued patents that are commonly owned, share at least one inventor, and have a filing or priority date within two months of any filing or priority date of the application. For most pending applications, the deadline for such identification will be February 1, 2008. Those applications and issued patents with the same filing or priority date and substantial overlapping disclosure create a rebuttal presumption that one or more claims are not patentably distinct. If the presumption cannot be overcome, the applicant must agree to limit the patent’s term to that of the earlier-expiring patent and to permanent co-ownership of both patents. If two or more pending applications are involved, the PTO may also require elimination of patentably indistinct claims from all but one of the applications.

Preliminary New Rules Strategy And Checklist

  • Before November 1, 2007, identify applications in which one or more Requests for Continued Examination have previously been filed, and if appropriate, file further RCEs.

  • Before February 1, 2008, identify commonly owned, pending applications and issued patents with at least one common inventor and with filing or priority dates within two months of each other.

  • Before February 1, 2008, identify commonly owned, pending applications and issued patents with at least one common inventor and with the same effective filing or priority date and consider how best to overcome any rebuttable presumption that at least one claim is not patentably distinct.

  • Identify pending patent applications that have not received a first action on the merits and consider filing an SRR for cases with more than 5/25 claims.

  • For applications filed after November 1, 2007, consider filing an SRR at the time of filing when there are more than 5/25 claims presented.

  • Evaluate pending applications and consider adding claims to any unclaimed subject matter; such claims can be pursued in a later-filed divisional if a restriction requirement is issued.

  • As required under the new rules, identify claims in pending CIP applications that are supported by prior-filed parent filing.

  • Consider whether patentably distinct inventions should be filed in separate applications.

  • Evaluate all commonly owned applications (with or without common inventor) for the presence of any patentably indistinct claim and consider canceling indistinct claims from one of the applications.

Goodwin Procter LLP is one of the nation’s leading law firms, with a team of 700 attorneys and offices in Boston, Los Angeles, New York, San Diego, San Francisco and Washington, D.C. The firm combines in-depth legal knowledge with practical business experience to deliver innovative solutions to complex legal problems. We provide litigation, corporate law and real estate services to clients ranging from start-up companies to Fortune 500 multinationals, with a focus on matters involving private equity, technology companies, real estate capital markets, financial services, intellectual property and products liability.

This article, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin Procter LLP or its attorneys. © 2007 Goodwin Procter LLP. All rights reserved.