The United States Patent & Trademark Office (USPTO) has proposed rule changes that potentially will greatly affect, change and restrict the public's ability to obtain patents. First proposed last August 21, the USPTO published rules that were set to become effective on November 1. But no sooner had they been put forward than did a group of companies file suit to challenge them.
In many instances, aspects of the new rules applied retroactively. Despite significant debate throughout the industry, many aspects of the new rules remain unclear. First, there was significant debate regarding how the rules would affect currently pending patent applications. Second, the USPTO provided minimal and often ambiguous 'guidance' as to how aspects of the rules would be implemented in practice. Third, it remained unclear whether the USPTO, itself, had the proper authority to implement such sweeping changes that might curtail and/or contradict the current patent laws passed by Congress.
As a consequence, GlaxoSmithKline ("GSK") and others sued and a U.S. District Court issued a Temporary Restraining Order ("TRO") to stop the USPTO from implementing the new rules. Currently, GSK and others are fighting the USPTO in court to permanently stave off the rules, thus putting patent practice into great flux.
It should be noted that this article only provides an introductory overview of a few of the more significant new rules. The rule changes are expansive, complex and their application and impact vary significantly under differing circumstances. Due in part to the interplay of the rules discussed here, application filing strategies may vary greatly.
As these new rules have yet to go in effect or be tested, many uncertainties remain. Although numerous courses of action have been discussed throughout the industry, no clear consensus as to best practices has been reached; and in fact professionals disagree as to the application and consequences of the rules. Consequently, it is important to contact your intellectual property counsel directly to discuss a prosecution strategy moving forward.
Rule Change Summary
The USPTO's rule changes fundamentally and drastically change the patent application process.
Generally, these new rules would make obtaining a patent more difficult because the rules limit the number of claims applicants may pursue, the number of continuations that applicants may employ, and place additional restrictions on the way in which patent applications may be submitted and pursued. The end result is that these rules make patent prosecution more complex and costly for applicants and implement arbitrary limits/caps to the types of patents that applicants can obtain.
The USPTO changed the rules as follows in three major areas, including: (A) a "5/25" claim limitation rule; (B) a "2+1" continuation limitation rule; and (C) a multi-application claim recombination ("Lasso") rule.
The 5/25 Claim Limit Rule
With the new rules, the USPTO is attempting to reduce the number of so-called patent claims that applicants may submit. The patent claims describe the bounds of an applicant's intellectual property. With the new rules, the USPTO is also attempting to discourage applicants from filing more than 5 independent claims or more than 25 total claims in a single patent application. For patent applications that have more than 5 independent claims or more than 25 total claims (i.e., the "5/25" claim limit), the USPTO would require that a patent applicant perform duties that, prior to these new rules, were the responsibility of the USPTO.
In particular, when exceeding the 5/25 claim limit, the applicant would be required to perform a "prior art" search. Perhaps more significantly, applicants that are "large entities" (i.e., those that have more than 500 employees), may need to report the relevancy of the discovered prior art to their patent claims. The USPTO refers to this search and report as an Examination Support Document (ESD). Although the sufficiency standards for such reporting is not well established as of yet, some consider such reports to be effectively undesirable admissions against self interest.
2+1 Continuation Rule
The 2+1 rule is a limitation on the number of so-called "Continuations" an applicant may pursue. Prior to this rule, applicants essentially enjoyed unlimited Continuations and/or Requests for Continued Examination ("RCEs"), which provided greater opportunities to pursue added patent protection. A Continuation application and/or an RCE are valuable because they allow an applicant to continue pursuing a patent application even after a final rejection by the USPTO. In the past, it was common to use both continuations and RCEs to ultimately obtain a grant of a patent.
After November 1, 2007, patent application filings would be limited to two (2) continuation applications and one (1) RCE per patentably distinct invention. This gives rise to a "2+1" rule for the limited number of continuations/RCEs per continuation family that are now allowed.
Applications filed before November 1, 2007 would also be retroactively constrained by the 2+1 rule. Importantly, if an applicant has already pursued continuations for an existing application, the patent office will provide only "one more" continuation by right.Applicants may obtain additional Continuations/ RCEs by filing a Petition with the Patent Office and providing a reason why the additional continuation/RCE is necessary. However, the USPTO has not specified what would constitute a sufficient showing to obtain a grant of a Petition.
With the new "Lasso" rule, the USPTO would determine whether certain applications are related and potentially recombine 'patentably indistinct' claims from multiple patent applications into a single application. Through a rebuttable presumption, the USPTO may rope together claims from separately filed patent applications when there is common subject matter and if the applications contain 'patentably indistinct' claims. Applications that have a common inventor, filing date, priority claim, and have overlapping subject matter would presumptively be considered to have common subject matter. More specifically, if a claim in one patent application is supported by the disclosure/specification of another patent application, the claims as between the two patent applications would be subject to USPTO scrutiny for potentially being lassoed together. As such, the USPTO could require applicants to recombine all patentably indistinct claims into a single application. One problem with this "lassoing" together of claims is that the recombined application would likely exceed the new 5/25 claim limitation rule, thereby bringing those claim limitations and complications further into play.
Possible Ramifications Of Rule Changes
These fundamental patent procurement rule changes will likely:
• change patent filing and procurement strategies.
• cause some to consider preemptive continuation strategies.
• greatly increase the complexity of procuring a patent.
• require greater numbers of appeals to obtain patent grants.
• spur many to conduct Intellectual Property (IP) portfolio audits in the near term.
• cause many to alter budgets for future patent procurement.
The above is a non-exhaustive list of rule changes. These rule changes affect applicants differently based on their individual circumstances. The industry has debated the implications and even the likelihood of these changes taking place (as several entities continue with their suits against the USPTO to prevent the new rules from going into effect). Unfortunately, to date, no clear consensus has been reached and professionals continue to disagree as to the proper application and/or consequences of the new rules.
There is no guarantee that any permanent injunction will be granted stopping the new rules. With such great uncertainty, perhaps the most prudent path for those seeking to obtain a patent is to move forward as if the rules were to come to pass. Should the rules not be allowed to come about, patent applicants may then modify their strategy to be free of the new rule restrictions. The converse of ignoring the new rules (i.e., filing an application as if the rules are not in effect, and then having to modify applications to comply with the rules should they go into effect) will likely require significantly more work and potentially result in greater losses of rights.
Considering the absolute uncertainty that the USPTO has put the industry in, it is now highly advisable for patent applicants to consult counsel for further direction regarding their particular circumstances and patent portfolio.
Walter Hanchuk is a Partner and John Kheit and Daniel Sheridan are Associates in the Intellectual Property practice at Chadbourne & Parke. They are reachable at 212-408-5100.