Should the Patent Office Kill Late Claiming?: Proposed Continuation Change

In January 2006, the PTO proposed dramatic changes to patent continuation practice that would essentially allow only one continuation (or CIP or RCE) per application. [Link]. 

Although the PTO has justified these changes based on a need to reduce examiner workload, the real controversy with extended continuations is what I call “late claiming.” 

There are many different ways to “claim” an invention in a patent application.  Often, an applicant may pursue one aspect of the invention in the original application, and then file continuations to obtain coverage for other aspects.  That practice is fine and legal, but can create business problems when the applicant waits until learning of a competitor product before adding claims that cover that new product.

Late claiming occurs when the applicant adds new claims to cover what has arisen in the marketplace since filing the original patent application.

According to the law, those new claims are generally legitimate so long as they are enabled by the original written description.  However, the possibility of late claiming creates another potential down-the-road liability for product developers.

Is late claiming a problem?
Will the PTO rule change reduce late claiming?

21 thoughts on “Should the Patent Office Kill Late Claiming?: Proposed Continuation Change

  1. Departmental shredder are auto start-stop so you don’t have to monitor shredding long runs of continuous forms. Select from high speed or large capacity models. Every Destroyit shredder model has a 10-year warranty on cutting heads and can take staples and paper clips.

  2. Tom nailed it: “Why the software industry has taken pride for so long in NOT filing for patents to protect their innovations is one of the great unsolved mysteries of American business.”

    Patents are valuable for smaller companies. Without patent protection, the small software company risks being dominated by larger software companies with much more resources. For example, to enter the server market to compete with Novell, Microsoft spent hundreds of millions of dollars on research and development — more than Novell was earning in yearly gross revenue. Do you think Novell would have liked some patents at that point?

    Software patent applications (even if they never issue) are especially valuable because, when they publish, they become rock-solid prior art against future patent applications. The best way (and perhaps only way) to prevent someone else from patenting your software technology at a later date is to file an application and have it published–so that the patent examiners can search and find it.

  3. Bemused,

    You stated, “The notion that companies learn from patents is truly absurd.” You provided two points in support of this conclusion: 1) Software patents include little implementation detail and 2) Companies tell their software engineers not to look at patents for fear of liability. In other words, companies don’t learn from software patents because their employees are not looking at them. And even if their employees did look at the patents, it wouldn’t be very fruitful given the relatively little amount of disclosure in those patents.

    This raises two important issues:
    First, what good is a patent’s disclosure if companies (those that are most like to improve upon the disclosed invention) are not reading them?
    Second, does the amount of a patent’s disclosure justify the 20-year term?

    At the heart of the first issue is willful infringement. As you may know, a judge may increase actual damages up to 3 times their value for willful infringement. To avoid willful infringement, companies in all technological areas (not just the software arts) typically advise their employees to avoid looking at patents because you cannot willfully infringe a patent that you have no knowledge of. Many persons have suggested various ways to reform patent law to allow competing companies to review each other’s patents without risking a flood of willful infringement allegations. So you’re not alone in your concern that the patents themselves may not be as beneficial to society as they could be. However, to the extent that having a patent application helps to motivate the applicants to commercialize their inventions, the public may at least benefit from the public disclosure of those inventions because companies are much more likely to examine (and learn from) each other’s commercially available products.

    At the heart of the second issue is the value of the patent’s disclosure. In order to claim an invention, you have to put the public in possession of that invention. Obviously, to put the public in possession of that invention, the patent must have a threshold level of detail. This raises a question: How much detail should there be? As you may know, patent law requires patents to have sufficient detail to enable one of ordinary skill in the art to make and use the claimed invention “without undue experimentation.” Often, a mere flowchart can enable one of ordinary skill in the art to practice the software process shown the flowchart. Similarly, a few pictures of a mechanical device (such as a shovel) may sufficiently enable the invention.

    As a result, patents (especially software patents) typically don’t have much detail. This means software engineers might have to write their own code, and mechanical engineers might have to identify particular sizes. But coding is something that ordinary software engineers can do, and calculating dimensions is something that ordinary mechanical engineers can do. Thus, the public will not be deprived of the invention.

    The policy behind the “without undue experimentation” rule is two-fold: patents should have sufficient disclosure to allow someone of ordinary skill to read the patent and then take it from there, but patents should not be cluttered with further detail that the public doesn’t truly need. This helps to ensure that the public will be able to practice the invention, but helps to reduce the effort (and patent lawyer fees) associated with preparing the application. This, of course, favors the applicant over those seeking to leverage the disclosure of the patent application. But it’s probably the right result given that patent applications are already too expensive and we want to encourage people to get patents so that they (or their licensees) will commercialize their patented inventions.

  4. bemused,

    You can say that Microsoft won the spreadsheet market, say, because of anti-competitive practices. But it’s equally true that it can win markets like that simply due to exact copying of features in the product, combined with a better known name and powerful marketing, and it’s hard to make a case that that by itself constitutes anti-competitive behavior. (Indeed, that is exactly the sort of argument Microsoft has always tried to make.) From time immemorial, that is how large companies have stolen ideas from smaller players and made all the profits on those ideas. But that is exactly the problem that patents are intended to address.

    And certainly not all patents in software are reasonably awarded. Of course, if there is indeed prior art, that should be something that can be made evident in court. Raising the quality of software patents is a good thing for all deserving players.

    What damages the software industry more than anything else, in my view, is that the true innovators DON’T patent their ideas. THOSE patents would survive both the patent office AND the court process. They would be able to get reasonable compensation for their pioneering efforts.

    Why the software industry has taken pride for so long in NOT filing for patents to protect their innovations is one of the great unsolved mysteries of American business. It is a perversity masquerading as refinement and enlightenment.

    Only a fool fails to file for a patent on a truly important, innovative idea.

  5. Microsoft competed with other makers of, for example, spreadsheets. They were able to win not because they stole the idea of a spreadsheet, but because they employed anti-competitive practices in the way they marketed their operating system. Software patents that I have seen being litigated have little to do with innovation — the prior art inevitably existed even if it is difficult to obtain due to the passage of time before the litigation occurs. And obviousness to a patent judge seems to mean “obvious to him”. Meanwhile, several hundred thousand dollars later, it is a crapshoot whether the piranha holding the inappropriate software patent can be defeated, so the attacked software company settles.

  6. Bemused,

    What you are conveniently not mentioning is the single biggest gripe of people in software from near its inception: that every last good idea the industry came up with was sucked up by Microsoft, and that the pioneers of the new technologies — the people who by definition were the true innovators — got little or nothing for their efforts.

    Please explain to us how it can possibly be good for an industry for 80-90% of the profits of that industry to go to a company that practically defines imitation, and not innovation? Why should that money be parked in the bank account of such a derivative player?

    Don’t you think we would have only GREATER innovation if the actual innovators were able to build up their own paradigms, instead of having, in effect, only ONE filter at Microsoft through which all ideas must pass?

    Yes, there’s been a great deal of innovation in software — but this is DESPITE the failure in protection for novel ideas, not BECAUSE of it.

    The real question is, how much MORE innovation might there have been if more parties had been allowed to pursue their own innovative visions, instead of being drummed out of the industry, or reduced to a marginal player, by the likes of Microsoft?

  7. Consider the dreadful performance of the software industry before software patents were allowed. Development of compiler technology, packet networking, functional languages, relational databases. And software businesses did so badly. Those poor small inventors like Mitch Kapor and Bill Gates were unable to build businesses without the protection patents gave to their ideas.

  8. So bemused, what is your argument?

    That there are no original ideas in software technology? That none of them are worthy of protection by patent?

    I mean, we have hundreds of thousands of smart people in software, but not one single idea they generate is non-obvious and novel, and that every apparent pioneer of a software concept is actually just copying from someone else?

    I guess I had always thought of the software industry as one of our great examples of (mostly) American ingenuity. Is this simply false, and in truth there are no important novel ideas?

    Seriously, what can you possibly be arguing here? Doesn’t your “argument” collapse into incoherence?

    In fact, one of the truly stupid notions running through the software industry is that patents aren’t worth having, or are somehow ignoble, inclining software developers to fail to file for patents. Of course, when their ideas are ripped off by bigger players, they scream bloody murder, but the idiocy of the industry on the point of patent protection prevents them from seeing their own foolhardiness.

    My view is that if you don’t patent your ideas, you’ve got no one to blame but yourself if you have no protection from copying. And you have absolutely zero right to complain that Microsoft, in particular, makes off with your ideas. It’s exactly what you deserve.

    No one loves you as much as Microsoft when you make these kinds of arguments.

  9. The notion that companies learn from patents is truly absurd. In the field of software, patents are often granted with little actual disclosure of implementation details in the specification. Software engineers are told not to look at patents for fear that they may be tainted in some future litigation. It amazes me that patent attorneys continue to pretend that patents serve any purpose at all but the establishment of monopolies for the “inventor”, who frequently is simply someone who jumped on the technical bandwagon well after actual invention occurred. Continuations are just another example of this scam.

  10. Late claiming is really a consequence of the effective loss of DOE and the Johnston v. RES decision (that any equivalents not claimed are lost). The latter have left only literal infringements, in effect, to be asserted. With practically no flexibility left, one must almost be omniscient to figure out how to craft a set of claims for devices appearing during the term of the patent and infringing the spirit of the claims. The only way out has been to continue the case and craft new claims.

    If late claiming is halted through the back door by the PTO (rather than by legislation), then more applications will be originally filed to set up the vehicles for additional claims.

  11. To foster innovation and encourage inventors to disclose their inventions, Congress created a quid pro quo. In exchange for disclosing their inventions in a patent, inventors receive a right to exclude others from practicing those inventions for 20 years.

    The proposed patent office rules relating to continuing applications substantially impair the value of the 20-year term. In particular, these rules seek to force applications to a final resolution well before the 20 year term expires–thus allowing competitors (1) to leverage the “disclosure-dedication rule” and copy any feature disclosed but not claimed and (2) to design around the claims while copying many disclosed features.

    The patent office apparently believes that 20 years is too long for copyists to wait for patent-disclosed technology to be available for use. I disagree. The copyists should have to wait for the 20 year term to expire because that was the contemplated result of the congressionally mandated quid pro quo: a 20-year period of exclusivity. If the ability to “late claim” helps an inventor better enforce that 20-year exclusivity, so be it!

    However, copyists typically do not have to wait the full 20-year term to commence their copying. With each continuing application or RCE, applicants must weigh the cost of ongoing prosecution against the potential benefit of additional claim scope. As time passes, this cost-benefit analysis eventually persuades almost all applicants to voluntarily bring their applications to an early final resolution by not filing any continuing application or RCE. Of course, in a relatively small amount of cases, applicants may file several continuations where they see sufficient value in additional claim scope. But in each case, the value of exclusive right affects the chain’s length–leading to a fair result under the quid pro quo. Where inventions are highly valuable, the applicants will file several continuing applications. These several continuing applications create an increased burden on the public, but this increased burden is fair because the public will eventually benefit from these highly valuable inventions. In contrast, where inventions are less valuable, the applicants may file fewer continuing applications (or none at all), which is also fair because the public will be less burdened. Since economics are generally effective at limiting the length of application chains, the proposed rules are unnecessary.

    In sum, if the public gets the full value of an application’s disclosure once published, the applicant should get the full value of the 20 year term. Continuation practice (including the ability to “late claim”) — while frustrating to copyists who lack “notice” as to what they can copy — helps to ensure that applicants get the full value of their 20-year term. To those that find it frustrating to have to wait 20 years for a patent to expire, I say: “Next time, be the first to invent!”

    Notwithstanding my belief that there are legitimate purposes for continuation practice and “late claiming,” continuation practice and “late claiming” can be abused where, for example, they are used to draft claims that read on later developed technology that has little to nothing to do with the applicant’s invention–but that’s a topic for another entry. But let me say for now that I do not believe that limiting the number of continuing applications is the right way to limit such abuses.

  12. Based on my own experiences with the USPTO, continuations have their place. Based on my experiences with litigation issues, late claiming and abuse of continuations is a serious problem that is growing. Without thinking about it too much, I recall having been involved in four litigations in the last 8 to 9 years where patent owners sued clients on patents that involved some form of late claiming where the second, third or sixth patent in a continuation series created the real problem.

    The USPTO is a bureaucratic institution that necessarily needs to manage “by the numbers” at all levels. One does not need to look very far into the available sources of information to conclude that the USPTO’s proposed rules changes are mostly driven by the need to manage the inflow and outflow of numbers. The USPTO recognizes that continuations and other related forms of what the USPTO calls “rework” (divisionals, as an example) have driven the internal population of pending patent applications to about one million. There is public testimony that indicates some art units have a back log of about nine years. Concerns about numbers of this kind seem to be what is driving the USPTO’s need to make rules changes – which is a bureaucratic solution to a numbers problem, rather than a solution that is driven by concern about how late claiming or continuation abuse impacts the public. In this last respect, the USPTO publicly reports that those who are abusing the system represent a small minority, which suggests the USPTO is mostly concerned about processing the numbers, rather than addressing the underlying reasons as to why the numbers got so high in the first place.

    Regardless of the USPTO’s reasons for implementing these proposed changes, will they improve the current problems that we have with abuse of the system? That remains to be seen. Bear in mind that ex parte reexaminations were implemented with the intended purpose of giving the public a cost effective means for invalidating patents. Quite the opposite has proven true over the years. In my opinion, the existing problems relating to system abuse need to be corrected via statutory changes rather than looking to the USPTO for fixes.

  13. While the idea of public notice is a good one, how can the public truly be on notice until the claims are intrepreted and defined by a Markman ruling. It seems to me that the public would find it safer to take the entire specification into account when designing around. In addition, I recall that there have been some cases which have said that writing claims on an infringing product is not only permissible but preferred. Writing claims to specifically cover an infringing product would likely benefit the court.

  14. The so-called “notice function” of early publication is also thwarted by non-publication requests. Thus, a would-be competitor is similarly “disadvantaged”, as any attempted design around would be at the mercy of the publication of an issued patent, if at all, rather than the publication of the application at or around 18 months.

    Unless there is a serious suggestion to abolish non-publication requests as well, the strategy or necessity of “late claiming” does not seem any more or less offensive than an inventor’s ability to utilize non-publication requests, in lieu of filing foreign patent applications. Considering the sizeable costs of foreign filings, and the general size of the U.S. markets for most patentable commercial embodiments, the non-publication request operates to provide as much secrecy and extend the developmental window for an inventor as possible without sacrificing potential market share to other late-coming improvements.

    In this aspect, late-claiming operates similarly. I do not since this is much of an issue with regard to the “notice-function”, other than a minor policy argument regarding multi-national filings. Instead, the movement appears motivated by the desire to increase administrative efficiency, or at least lighten the case load of individual examiners.

  15. As long as claim language is going to strictly interpreted by courts late claiming MUST be allowed. An over-interpretation of a single word in a claim is often used to deny an inventor the appropriate scope of her invention and the inventor must be allowed to reclaim the proper scope of her application through late claiming.

    You only get what you have written description and enablement for, and as long as that is true late claiming is NOT a problem and, in fact, is one of the things that allows the current overzealous restriction practice of the Office to be fair to inventors.

  16. One cannot necessarily design around claims even after the last claims in the last continuation, given the possibility of broadening reissue within two years. The doctrine of intervening rights provides some aid, but does not in all circumstances afford total protection to the party attempting to design around the claims.

    Thus, the scope of the broadest claims is not fixed until two years after the last continuation issues.

  17. @Hasit – That which is not claimed is dedicated to the public. So the notice-function value of a specification is only good if all available claims are before the public. Under the current system, one who wishes to design around the claims cannot safely do so until he sees the last claims in the last continuation.

  18. For as long as competitors are allowed to work up an “invent-around” defense, then patentees should be allowed a reasonable opportunity to “late claim.” In either case, one company is just looking at the other’s commercial embodiment, then trying to get around it or claim around it.

  19. Hi Dennis,

    Your note raises very interesting questions. I think the “late-claiming” undercuts the spirit behind the notice-function of a patent claim. The early publication of a patent application affords no notice if the set of claims will keep on changing subsequently after the publication of an application.

    A competitor will have to keep on guessing what new claims will be filed during prosecution after an application is published. This means an hypothetical competitor will have to stop trying to design around a claim when it is being prosecuted.


  20. You raise quite interesting questions here.

    Taking the second question first, I think reducing the overall availability of continuation practice cannot help but reduce the latest of the late claiming. The chain of applications will end sooner, on average, than before.

    As for the first question, is late claiming a problem, I think the benefits of permitting post-filing claim amendments diminish rapidly in the face of rising uncertainty costs. It is impractical to deny an applicant any chance to amend claims in response to an examiner’s assessment. As time passes, however, the adequacy of written disclosure support for claim language can be cast into the murkiest doubt by applicant overreaching (which, by the way, can be the product of deeply held, and deeply mistaken, applicant belief). On balance, one or two continuations should be sufficient to permit an applicant to claim well what he or she actually invented, and to support a presumptive connection between disclosure and claim in which the public can have some confidence. This tradeoff also highlights the sharp distinction between any given applicant’s private interest in pursuing protection and the social interest in a system with more, rather than less, benefit net of cost.

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