Patent Rule Limits Applications, Impacting Device Makers' Filing Strategies

From the August 27, 2007, issue of "The Gray Sheet"

A highly anticipated final rule from the U.S. Patent and Trademark Office puts new limits on the number of applications a company can file for any single invention, potentially requiring changes in device manufacturers' patent strategies.

Published Aug. 21 in the Federal Register, the rule focuses on reducing the number of "continuing applications" that may be filed with PTO.

Continuing applications currently are unlimited and allow applicants over time to add new claims to an original "parent application," thus modifying and broadening the scope of protection for a technology as it develops.

In January 2006, PTO proposed allowing applicants only one continuing application, unless they could justify why more filings were necessary. The proposal attracted more than 500 public comments. Most, including those from device stakeholders such as the Medical Device Manufacturers Association, opposed the sweeping change.

The Aug. 21 final rule tempers the proposed revisions. Beginning Nov. 1, each parent application will be allowed up to three continuing applications - two continuation or continuation-in-part applications, and one request for continued examination - without justification.

PTO maintains that there is no "absolute limit" to the filings, since applicants may be allowed additional applications if they can show why they could not make the claims earlier.

Still, "practically speaking, you may have a finite number of cases in which to prosecute your inventtions," according to Washington, D.C., patent attorney Les Bookoff of the law firm Finnegan Henderson. The term "patent prosecution" refers to the interaction between patent applicants and PTO.

PTO notes that under the proposed rule, 11% of applications would have required further justification in fiscal 2006. Under the final rule, the number of 2006 filings that would have required further justification drops to 2.7%, the agency says.

However, "the medical device community may rely more on continuing applications than other industries," Bookoff noted, in large part because lengthy research and development activities and clinical trials cause the commercial product to lag behind the invention's initial filing.

Device firms may opt to file continuing applications if a product has recently become commercially viable, a competing product is newly discovered or clinical trials indicate that previously unclaimed subject matter may be useful, for example.

Patent attorneys will be "studying these rules very carefully" and will begin setting new patent prosecution strategies, Bookoff said.

Ultimate Impact On Patent Protection Uncertain

While Bookoff said it is premature to predict the impact of the rule on patent protections, he maintained that it will increase the need for companies to properly prepare a prosecution strategy for each case and may require more resources per application.

Small companies in particular will feel the financial effects because it will be more difficult to spread out costs by building a patent's claims over time, according to Steve Jensen, a patent attorney at Irvine, Calif., firm Knobbe Martens Olson & Bear.

But PTO encourages applicants to "get it right the first time," noting that "the examination process is more efficient when the applicant diligently prosecutes the application so that the examiner has all of the relevant information, including amendments, evidence, arguments, and prior art as early as possible."

PTO expects the rule change to help reduce its application backlog, as "the former unrestricted continued examination practice was impairing the Office's ability to examine new applications," the rule states.

Despite a lengthy justification in the rule, some argue that the revision goes beyond PTO's authority, and already at least one lawsuit, filed Aug. 22 by patent holder Triantafyllos Tafas in U.S. District Court, is seeking nullification of the rule on those grounds.

A controversial provision in House patent reform legislation passed out of committee last month would explicitly grant the office rulemaking authority.

- Chloe Taft

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