The Current State Of Patent Law And PTO Reform

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The Current State Of Patent Law And PTO Reform

• Brian Batzli Boston San Jose
• Dr. Denise Kettelberger - Houston
• Merchant Gould, PC

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Issues Facing The US PTO

• Increasing Number Of Applications
• Accelerating Number Of New And/Or Complex
  Technologies
• Competition For Potential Examiners From The
  Private Sector
• Congressional Diversion Of Funds

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Application Growth
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Accelerating New Technologies Complexity And
Subject Matter

• Software
• Biotechnology
• Nanotechnology
• Business Methods

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First Action Pendency by Art Areas
1 Average 1st action pendency is the average
age from filing to first action for a newly filed
application, completed during October-December
2005. SOURCE
http//www.uspto.gov/web/offices/pac/dapp/opla/pre
sentation/focuspp.html
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Accelerating (cont.)

• Issues raised include
• Hiring of Examiners
• Training and Examination Guidelines
• Establishing Prior Art Database
• Additional Time to Examine Applications

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Pressure From The Private Sector

• Private sector starting salaries raised at many
  firms to 125k
• U.S. PTO hiring based on governmental mandated
  pay scale

8
Congressional Diversion

• Congressional diversion of fees from the patent
  office
• Two pending bills
• Patent And Trademark Fee Modernization Act of
  2005 (PTFMA)
• COMPETE Act

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The Patent Office Fights Back. . . .Proactive
Steps

• The 21st Century Strategic Plan
• June 2002
• Updated February 2003
• Updated February 2006

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The PTOs Core Goals

• Improving quality
• Increasing efficiency
• Adapting to trends in the marketplace of
  intellectual property
• Legislation

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Improving Quality

• Three elements
• Agility
• Capability
• Productivity

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Agility

• Responding quickly and efficiently
• Developing a system for electronic end-to-end
  processing
• Making itself a premier place to work as an
  examiner
• Increasing reliance on third parties to share the
  workload

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Capability

• Improve "quality" of issued patents
• Tracking the changes in the rate of patent
  applications filed over time
• Hiring and training of examiners
• Integrating reviews that will cover all stages of
  patent
• Semiconductors, telecommunications, and
  biotechnology are advanced. Expand its "second
  pair of eyes" review of work product in these
  "advanced" fields

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Productivity

• Accelerating processing times through "focused
  examination
• Goal
• A first Office Action for first-filed U.S.
  non-provisional patent applications, at the time
  of the 18-month publication
• A patent search report for other patent
  applications in the same time frame

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Productivity (cont.)

• Implement a four-track system
• Searches from
• the applicant,
• an international searching authority,
• a foreign patent office, or
• a certified search service.

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Productivity (cont.)

• Accelerated examination option
• Incentive-based fee schedule

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PTOs Identified Critical Needs

• Multilateral and Bilateral Agreements,
• Legislation/Rules,
• Labor Relations,
• Budget, and
• Physical Move

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Major goals

• Reduce the backlog of patent applications
• Enhance the efficiency and quality of patent
  examination
• Increase the quality of issued patents
• Improve public notice of the scope of patent
  rights to reduce litigation-related continuation
  practice

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Some Current Initiatives

• Peer Review Pilot
• Outsourcing Searches
• JPO Initiative Regarding Claim Scope (Patent
  Prosecution Highway PPH)
• Continuation Practice Rules
• Electronic Filing

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Continuation Practice Current Law

• 35 USC Section 120
• An application for patent for an invention
  disclosed. . . in an application previously filed
  in the United States. . . which is filed by an
  inventor or inventors named in the previously
  filed application shall have the same effect. . .
  as though filed on the date of the prior
  application if filed before the patenting or
  abandonment of or termination of the proceedings
  on the first application. . .

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Rules

• 37 CFR 1.53
• A continuing application, which may be a
  continuation, divisional, or continuation-in-part
  application, may be filed under the conditions
  specified in 35 USC 120, 121, 365(c) and
  1.78(a).
• 37 CFR 1.114
• RCE

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PTOs Proposed Changes

• Limits on
• Number of continuation applications
• Time to file divisional applications
• Number of claims examined
• Require
• Applicants provide search report
• Applicants provide patentability report

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Limitations on Continuations

• Limited to one as of right
• Includes RCE
• Further continuations granted upon petition
• Necessary showing the amendments, evidence or
  argument could not have been previously submitted

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PTOs Stated Rationale

• These proposed rule changes will make the patent
  examination process more effective and efficient
  by reducing the amount of rework by the USPTO and
  reducing the time it takes for the patent review
  process. In addition they will improve the
  quality of issued patents and ensure that the
  USPTO continues to promote innovation.
• http//www.uspto.gov/web/offices/pac/dapp/opla/pre
  sentation/focuspp.html

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Rationale (cont.)

• Since the USPTO's resources have not increased at
  the same rate as filings, it has become much more
  difficult to provide reliable, consistent and
  prompt patentability decisions. Delay in granting
  a patent can slow new products coming to market,
  and issuing patents for inventions that are not
  novel and non-obvious can impede competition and
  economic growth. Simply hiring more patent
  examiners will not slow the growth in the time it
  takes to get a patent or improve the quality of
  examination. This will occur only through the
  participation of applicants in facilitating more
  effective and efficient patent examination.

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Public Comments

• Literally hundreds of comments from many sources
• http//www.uspto.gov/web/offices/pac/dapp/opla/com
  ments/fpp_continuation/continuation_comments.html

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Comments. . . .

• FOR
• Public should not be kept waiting to see if
  patent will issue
• Current practice allows submarine patents
• Patent Office has scarce resources which should
  not be tied up with multiple continuations by the
  same applicants
• Improve PTO efficiency

• AGAINST
• Rules exceed PTO rulemaking authority
• Continuation application abuse is not the norm
• The number of cases with two or more
  continuations is relatively small
• Rules will hurt scope of protected inventions
• Rules will shift burden to appeals and petitions
• Rules do not take into account case law and/or
  real world issues with PTO Examiners

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Do The Rules Square With The Strategic Plan ?
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Do The Rules Square With TheMajor Goals ?
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Can Both Sides Be Right?

• The US PTO has advised the public of its goals
  for 5 years. Should everyone be surprised?
• Is it the obligation of the US PTO to take
  external factors into account?
• The costs to applicants
• Case law regarding infringement

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Can Both Sides Be Right ? (cont.)

• Should the US PTO review its internal rules
  regarding after Final practice, disposal credits
  and restriction practice?
• If U.S. Patents are narrowed by additional
  prosecution history and more limiting amendments,
  who should make the decision?