Noonan’s Corner: Changes to Continuation and Examination Practice

From the desk of Kevin Noonan

On February 1, 2006, the U.S. Patent and Trademark Office sponsored a "Townhall Meeting" at the Northwestern University Law School. The meeting was attended by practitioners, patent counsel and corporate executives, and presentations were made by John Doll, Commissioner of Patents, and James Toupin, General Counsel of the Patent and Trademark Office.

The topic was the proposed changes in U.S. patent practice relating to "continuation" applications, which are applications that have been examined without obtaining an allowance (for at least some of the claims), and that are re-submitted to the Office for further examination. These types of applications arise either as the result of patent prosecution strategy by the applicant (who elects to cancel non-allowed claims to have other claims grant, and retain the right to pursue the non-allowed claims in the continuation application), or as the result of unwillingness by the Office to allow claims in an application (where further prosecution is needed to amend claims or present arguments or evidence of patentability). Also included under this definition are requests for continued examination, which are not new filings but rather permit continued prosecution of non-allowed claims in an application.

The proposed changes are dramatic and depart heavily from current practice. Most draconian in effect is to limit the number of continuation applications to one as of right, and to require an applicant who wants an additional continuation to show by petition that the amendments, evidence or argument could not have been previously submitted. This requirement would eliminate the opportunity for strategic decisions to cancel certain non-allowed claims to obtain other claims deemed allowable by the Office. The Examples provided by the Office also make clear that most applicants would be precluded from filing more than one continuation.

In addition, the Office is proposing to require an applicant to designate ten claims as "representative" in any application having more than 10 claims. All independent claims must be designated, and designating dependent claims up to ten total is optional. These 10 claims will be searched and examined by the Office, and if found allowable all other dependent claims will be examined solely for compliance with Sections 101 and 112.

Alternatively, if an application has more than 10 independent claims, or at the applicant's election, the Office will search and examine all claims in an application. However, under these circumstance the applicant must perform a search, using US PTO searching criteria, and then submit a patentability statement that identifies all claim limitations present in the prior art (with specificity) and explain how the representative claims are patentable over the prior art. The decision on whether to submit representative claims or the search/patentability information can be changed during prosecution at applicant's election.

There are also proposed rules for other types of "related applications," including divisional applications and continuation-in-part applications. For divisionals, only involuntary (i.e., required by the Office for unity-of-invention reasons) will be permitted. More importantly, a divisional will be able to claim priority only to the parent application, meaning that all divisionals will need to be filed during the pendency of the original application. Continuations-in-part will be permitted, but the applicant will be required to identify all claims disclosed in the parent application (which will be given the original filing date) and all other claims will be given the filing date of the continuation-in-part. Moreover, any claims in a continuation application filed from a continuation-in-part will be entitled only to the filing date of the continuation-in-part application.

The Office is also proposing a requirement that an applicant identify, within two months of the filing date, any co-pending application or co-owned patent having a common assignee and common inventor, in an effort to identify applications that should be subject to obviousness-type double patenting restrictions. These applications will be under a rebuttable presumption that they are patentably indistinct, and an applicant will have to affirmatively establish patentable distinctness or submit a terminal disclaimer. Otherwise, the Office may merge any such claims into a single application (presumably the earlier-filed one).

The justification for these proposed changes are two-fold: pendency and examination quality. The Office is experiencing an increasing backlog of pending cases: there are more than 900,000 cases pending at present, and the backlog number is growing. As a consequence, the pendency times (which vary by art unit) range from 28 - 52 months, and absent changes in the examiner corps or the pace of patent filings, it would take 36 - 130 months (depending on the art unit) to work through the backlog. Additionally, the "error rates" (cases where claims that should be allowed are not, and vice versa) is between 4 - 8% (depending on art unit). Although the Office is planning to hire 1,000 new examiners this year, and train them for about 8 months in a new training academy, the Office does not believe that either measure is sufficient to reduce pendency and improve quality.

The Office justifies the proposed changes by noting that less than 5% of all pending applications have more than 10 independent claims, and that less than 15% of all applications have 2 or more continuations or requests for continued examination. However, while an extensive examination of these statistics is on-going, it appears at first blush that the proposed changes would have little effect at overcoming the pendency and quality problems, and at best simply maintain the status quo. Indeed, Commissioner Doll admitted that the only way the number of backlogged cases could be reduced over the five-year period between 2007 and 2012 would be if all applicants were required to submit the search/patentability evidence now proposed to be required only of applicants submitting more than 10 independent claims for examination. The presenters further justified these proposals based on an earlier meeting with corporate executives, whose concerns focused on pendency and quality, and business certainty in knowing their own and their competitors' IP position.

The presenters also discussed changes to Rule 56 that have not been vetted by the Office of Management and Budget, but that are aimed at eliminating (or at least addressing) some of the liability issues raised by the requirement to provide the Office with search/patentability evidence under some circumstances.

The discussion period was lively, and many participants raised questions on whether the proposals would solve the problem. The presenters reassured the audience that these proposals were not "written in stone," and that they are actively seeking comment and alternative proposals (that can be addressed to (claims) and (continuation practice) by the deadline date of May 3, 2006.

The presenters did cause a bit of consternation in the group when they suggested that the practice of keeping a continuation "alive" to provide the basis for submitting a claim that would ensnare a competitor's efforts to "design around" were improper and contrary to the patent grant, and that all claims to what an applicant thought was his invention should be submitted at the time of filing. This raised a spirited argument from participants who reminded the presenters that this practice was countenanced by over a century of Supreme Court precedent, and that the Office did not have the authority to make changes to continuation practice on this basis under Section 2 of the patent statute.

The session was informative, and the attitude of the presenters clearly open to further suggestions to solve the problems in the Office. It would be prudent for practitioners and their clients to avail themselves of the opportunity to comment on these rules before they become final.

NOTE: Kevin Noonan, PhD is a partner at MBHB and has extensive experience in biotechnology and the chemical arts.  He represents pharmaceutical and biotechnology companies both large and small, and he is particularly experienced in representing university clients in both patent prosecution and licensing.