Proposed U.S. Patent Office Rule Changes Could Significantly Affect Portfolio Development

Earlier this year, the United States Patent and Trademark Office (USPTO) proposed a series of new rules to streamline the examination of patent applications. If adopted in their current form, the rules will significantly affect how applicants develop their patent portfolios. At the moment, it is unclear what the final rules will be. Furthermore, the USPTO has not specified when the new rules will go into effect, but has indicated that at least 30 days’ advance notice will be given.

The three most relevant areas include: (i) the disclosure of information to the USPTO during the examination of patent applications; (ii) the filing of continuing applications; and (iii) the manner and extent to which an invention is claimed and examined.

During examination of patent applications, certain individuals, including the inventors, have a duty to disclose to the USPTO information known to that individual to be material to patentability. In the past, this has lead to the submission of large numbers of documents, leaving the patent examiner to sift through them for what is actually relevant. Under the first set of proposed rule changes, the individuals associated with the filing will be required to describe the relevance of all documents submitted in any information disclosure statement (IDS) as soon as 20 documents have been cited in a case. The submission of multiple IDSs each citing fewer than 20 documents will not circumvent the requirement. In addition, it will be necessary to explain any foreignlanguage document or any document greater than 25 pages in length, even if the 20- document threshold has not been reached.

One objective of the proposed rules is to minimize the number of patent applications associated with each invention. Under current practice, applicants often direct separate applications to various inventive features. For instance, if the USPTO rejects some claims in a patent application, the applicant may opt to obtain a patent on the allowable subject matter and pursue the rejected claims in a separate "continuation" application. This approach can be valuable if, for example, quick action against an infringer is called for.

The proposed new rules limit the number of continuing applications that may be filed as well as when such applications should be filed. These restrictions cover continuation applications, continuation-in-part (CIP) applications, requests for continued examination (RCEs) and divisional applications. For example, under the proposed new rules, applicants usually will be permitted only one continuing application as a matter of right. Further continuing applications may be possible only if the applicant can demonstrate that an earlier-filed amendment, argument or evidence submission could not have been earlier submitted. The restrictions could also apply to applications pending when the new rules take effect.

The proposed rules also limit priority claims. For example, a continuation or a CIP typically will be entitled to the benefit of the original filing date of a single prior application. More importantly, a priority claim can only be made once – that is, priority to an earlier "parent" application will generally not be accorded if another application has already claimed priority to that parent.

In addition, the proposed rules could significantly affect the filing of divisional applications. For example, divisionals filed serially, one after the other, will no longer be permitted to claim priority to the original parent. As a result, in order to take advantage of the earliest effective filing date, an applicant must file all divisional applications before the parent application issues as a patent. Otherwise, it will be possible to claim priority only to the immediate predecessor application.

Finally, a third set of proposed rule changes limits the number of patent claims that the USPTO will examine initially. For example, an applicant will need to submit an "examination support document" if the application contains more than 10 independent claims or if the number of independent and dependent claims designated for initial examination exceeds 10.

If an applicant wants more than 10 representative claims examined, he or she will have to state that a pre-examination prior art search has been conducted, identify the most relevant art found, indicate how the claims are patentable over the art and how the claims meet the utility requirement, and explain how limitations in the claims are supported by the specification. This requirement has obvious implications for patents likely to be litigated.

Although we do not know what form the final rules will take, we recommend that you:

• Consider reviewing all patent applications in your portfolio that have received a restriction requirement to determine what divisionals should be filed before the rules go into effect.
• Consider reviewing all pending applications with more than one parent to see if any further continuations should be filed before the rules go into effect. Any continuing application filed under the new rules will be entitled to claim priority only to its immediate parent.

It is expected the new rules will be published, in some form, before the end of the year for enactment in January 2007. Because the USPTO may give no more than 30 days’ advance notice before the rules go into effect, you should begin planning now for their potential impact on your patent portfolio development strategies. If you have any questions about the issues raised in this Alert, please contact:

Kenda J. Stewart contributed to the preparation of this alert.

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.