11.21.06
R. Joseph Trojan,
Olga Kay
In January, the US Patent and Trademark Office (USPTO) announced proposed rule changes that, if adopted, would dramatically change the way companies handle their patent portfolios. This article focuses of one of the proposed changes: limiting the continuation practice.
The Current Practice
A genealogist would be surprised to hear that an unassuming patent application may give rise to an entire family tree of descendants. Such a patent tree involves a single “parent” application and a multitude of “child” applications. To belong to the family, a child application must be filed while the parent (or the prior child) application is still pending—ie, not issued as patent or abandoned.
The child applications are filed for two reasons.
First, an invention may be improved after the parent application already has been filed. Instead of filing a brand new application, one can file a continuation-in-part (CIP) of the parent. For example, an inventor of a new artificial joint may add a new antibacterial coating to the original structure. A CIP would have the same description of the invention plus the new feature and new claims that incorporate this feature.
A second reason to file a child application is strategic planning. Most inventors understand that it is best to file an application early and beat the competition. But what should one do if the invention is still taking shape and is not ready as a commercial product? Without having an idea of a product, one is not ready to draft patent claims. Under the current practice, one can put off the decision on what claims to include. This involves a continuation application (CA). Unlike a CIP, a CA has the same description (nothing new is added) but different claims.
Consider this example: Your company makes bone implants. You found a metal alloy (already known to chemists for many years) that is great for bone screws. Your patent application describes the use of the alloy in your bone screw product. After the patent issues, you discover that another company uses your alloy for dental implants. Good! You surely can get royalties from the dental company—it uses the alloy that you found, and its product is another, smaller screw. Unfortunately, your attorney has bad news: Your patent claim states, “I claim a bone fracture fixation device….” A fixation screw for a ceramic prosthetic tooth is not covered by this claim. Oh, no! If only you could go back in time and write a different claim. Why hadn’t you thought of the possible dental application?
Under the current continuation practice, there is no need for a time machine. While a new product is in development, one would file the first patent application. Then, before the patent issues, one would file a child application and repeat the process several times to keep the application tree “alive.” During this time, the inventor gains a better understanding of his or her invention and how it can be used. As a result, the top of the tree would have a patent with good claim coverage. In our example, if an application had been pending when the dental screw came on the market, one could have re-written the claims so that the dental product also was covered.
Proposed Changes
The existing rules place no limits on the number of continuation applications. With many taking advantage of this practice, the USPTO became concerned that the endless strings of continuations were clogging the pipeline—taking resources away from the truly original inventions. Indeed, according to the government statistics, in 2005 the USPTO received 369,750 submissions, 31% of which were various continuations.
The USPTO decided to take an axe to the patent tree. Under the proposed rules, only a single continuation application can be filed as a matter of right. The subsequent continuations must state a reason the changes could not have been made earlier. If the examiner is not satisfied with the reason, the continuation application will not be accepted.
The rule change procedure requires a period of public comment. During this period, the PTO received many submissions from various industry organizations, such as the Medical Device Manufacturers Association (MDMA), Pharmaceutical Research and Manufacturer’s Association, universities, government agencies, patent attorneys and even individual inventors. Most submissions argue strongly against the changes.
Save the Trees!
Many biotechnology and pharmaceutical companies insist that the continuation practice is essential for the patent protection of drugs. When a new compound is first isolated, it is impossible to predict all of its active forms and the conditions for which they may be helpful. Such details appear much later and are normally added to the continuation applications. According to the MDMA, the medical device industry faces the same problem. After the initial concept of the technology is disclosed, it is developed into a variety of commercial products. For example, Intuitive Surgical developed a robotic surgery tool that was later modified for a variety of procedures. It is impossible to predict (and claim) every such modification when the first application is filed.
The National Institutes of Health and other research institutions have another problem with the proposed changes. These organizations often try to seek a business partner and license their inventions at an early stage. Having a patent early attracts potential licensees. Under the new practice, the inventor will be stuck with the poor claims in such an early patent. This concern is seconded by the National Venture Capital Association and the Advocacy Office at the Small Business Administration—the weaker patent portfolios will make many companies unworthy investments.
No, Chop Them Down!
If so many inventors, research institutions and industries oppose the proposed changes, who supports them? Not surprisingly, the US Department of Justice, Antitrust Division and the Federal Trade Commission are backing these measures. These government agencies insist that, besides creating backlog, the current practice encourages “submarine patents.” A submarine patent stays in prosecution (“under water”) for as long as possible while the applicant waits to see what products come to market. Then, the applicant tailors the claims to cover these products. When the patent finally “surfaces,” it is easy to sue for infringement and collect damages.
However, the industry groups reject this argument. Every patent application automatically is published 18 months after filing. Once it is published, the submarine “has surfaced.” As to the backlog, the review of the justification statements required by the new rules also would consume the examiner’s time. Also, the much-maligned second and subsequent continuations are not a big problem: in 2005 they constituted only 3.7% of all continuation submissions.
Another camp supporting the changes is the computer industry. Apple Computer (with its 2,034 patents), Microsoft (with its 5,000 patents) as well as eBay, Cicso Systems and others wholeheartedly agree with the proposed changes, as they will allow for faster prosecution of applications. This is not surprising—rather than tend to a single patent tree, these companies rely on a grassy savannah of patents, each covering a short-lived product.
Thus far, the USPTO is reviewing the comments. As of Oct. 1, the Commissioner of Patents, John Dudas, had not yet made a decision to adopt the rules, so please stay tuned.