The document discusses proposed rule changes and initiatives at the USPTO aimed at addressing issues related to patent application pendency, quality, and backlog. Specifically, it outlines proposed rules that would limit continuing applications and requests for continued examination by requiring additional showings for second or subsequent filings. It also discusses a proposed rule change to allow examiners to focus initial examination on representative claims designated by the applicant and defer examination of non-designated claims. The document provides examples and recommendations for practitioners regarding the proposed changes.

1. What You Need to Know about the
Proposed USPTO Rule Changes and
Other Reform Initiatives
Michele A. Cimbala Ph.D., Esq.
507723_1.ppt

2. USPTO Initiatives
Overview
• Backdrop at the USPTO
• Proposed Rules Changes and Practice
Recommendations
• Potential Impact
• Other Reform Initiatives
2

3. USPTO Initiatives
Changes on the Ground Already
New campus
Hired 1000 new examiners in 2005
Central Re-exam Unit formed July 2005
Second-Layer Review – extended office-wide
Enhanced search tools
Patent Academy changes
Examiner re-certification
Telecommuting/Hoteling
Web-based electronic filing (EFS-web) released March 16,
2006
3

4. USPTO Initiatives
Changes on the Ground Already
Reduced Allowance rate
58.7% Allowance rate office-wide
(down from traditional 80%+ rate)
11% Allowance rate in business methods
Increased Pendency
But dramatic reduction in pendency for cases on appeal
4

5. Problems from PTO Perspective:
• Pendency
• Keeping Up with Growth
• Quality
• Past Solutions Failed
5

6. First Action Pendency by Art Areas
Pendency Pendency
High Pendency Art Areas 1 Low Pendency Art Areas 1
(months)
1640 – Immunology, Receptor/ (months)
1620 – Heterocyclic Compounds
Ligands, Cytokines, Recombinant 27.7 16.9
and Uses
Hormones, and Molecular Biology
1743 – Analytic Chemistry & Wave
30.8 1752 – Radiation Imagery 12.1
Energy
2123 – Simulation and Modeling, 2125 – Manufacturing Control
Emulation of Computer 39.7 Systems and Chemical/ 20.0
Components Mechanical/Electrical Control
2617 – Interactive Video 2651 – Dynamic Information
50.4 16.1
Distribution Storage & Retrieval
2836 – Control Circuits 24.3 2833 – Electrical Connectors 8.8
3628 – Finance & Banking, Accounting 52.1 3612 – Land Vehicles 12.0
3731 – Surgery: Cutting, Clamping,
30.9 3723 – Tools & Metal Working 10.9
Suturing
1
“Average 1st action pendency” is the average age from filing to first action for a newly filed application, completed during October-December 2005.
6

7. Inventory by Art Examples
Months of Months of
High Inventory Art Areas Low Inventory Art Areas
Inventory* Inventory*
1614, 1615, and 1617 – Drugs,
38-51 1620 – Organic Chemistry 15
Bio-affecting and Body Treatment
1734 – Adhesive Bonding and
1753 – Radiation Imagery 34 10
Coating Apparatus
2125 – Manufacturing Control
2127 – Computer Task
46 Systems and Chemical/ 10
Management
Mechanical/Electrical Control
2611 – Interactive Video 2651, 2653 – Information
111 12
Distribution Storage and Retrieval
2836 – Control Circuits 22 2831 – Electrical Conductors 8
3620 – Business Methods 25-130 3651 – Conveying 12
3731 and 3737 – Medical
3742 – Thermal and
Instruments, Diagnostic 38-47 8
Combustion Technology
Equipment
*The number of months it would take to reach a first action on the merits (e.g., an action addressing patentability issues) on a new application filed in
July 2005 at today’s production rate. Today’s production rate means that there are no changes in production due to hiring, attrition, changes to
examination processing or examination efficiencies, and that applications are taken up in the order of filing in the given art unit/area. Of course,
USPTO is taking aggressive steps to ensure changes that will significantly lower the inventory rates in high-inventory art areas.
7

8. Technology Center Application Inventory
1600 1700 2100 2600 2800 3600 3700 Total* Design
New
Applications1 55,402 63,923 71,778 97,380 77,651 56,738 65,005 508,878 18,451
9/30/2004
New
Applications1 62,644 72,697 76,529 115,585 94,425 70,354 83,225 586,580 24,534
9/30/2005
Overall
Pending
Applications2 95,006 105,447 102,440 138,822 137,458 101,097 108,039 809,323 27,599
9/30/2004
Overall
Pending
Applications2 107,647 120,767 117,728 167,721 159,687 117,045 130,168 932,300 38,104
9/30/2005
1 “New Application inventory” is the number of new applications designated or assigned to a technology center awaiting a first action.
2“Overall Pending Application inventory” is the total number of applications designated or assigned to a technology center in an active status. Includes
new applications; rejected awaiting response; amended; under appeal or interference; suspended; reexams and allowed applications awaiting grant
publication.
*Total inventory includes applications not assigned to a particular TC, awaiting processing either pre- or post-examination.
8

9. Technology Centers Rework* Statistics
FY 2002 FY 2003 FY 2004 FY 2005
TC % FAOM % FAOM % FAOM % FAOM
Summary Rework Rework Rework Rework
1600 36.4% 39.7% 40.3% 42.4%
1700 25.2% 26.9% 27.1% 28.0%
2100 23.9% 24.0% 24.6% 28.2%
2600 24.8% 24.2% 24.3% 25.4%
2800 19.1% 22.0% 24.9% 24.1%
3600 17.7% 21.2% 23.2% 28.5%
3700 22.2% 25.1% 24.0% 28.1%
UPR 23.2% 25.3% 26.1% 28.3%
* Rework first actions are those actions that are in a Continuing (CONs and CIPs), RCE, CPA or 129(a)
applications (excludes Divisionals).
9

10. USPTO Statement of the Problem
Why focus on continuing applications and RCEs?
Each continuing application or RCE:
• Requires the USPTO to delay taking up a “new”
application, thus contributing to the backlog of
unexamined applications
• Defeats the public notice function of the patent
claims in a initial patent since it allows the possible
issuance of multiple patents
10

11. USPTO Statement of the Problem
When applicants are allowed to generate a string of
continued examination filings from an initial
application, the exchange between examiners and
applicants:
– becomes less beneficial and
– suffers from “diminishing returns” as each of the second
and subsequent continuing applications or requests for
continued examination in a series is filed
11

12. USPTO Initiatives
Rule Making Proposals
– Limits to Continuation Practice
(comments due May 3, 2006)
– Limits to Claim Examination
(comments due May 3, 2006)
12

13. Vision
• Proposed Rule Changes goal:
– free up examiner time now spent on re-work so
that cases waiting for a first office action are
examined sooner.
• Potential undesired impact:
– Increased complexity of prosecution
– Increased cost
– Less protection
13

14. First Notice of Proposed Rulemaking
• (1) “Changes to Practice for Continuing
Applications, Requests for Continued
Examination Practice, and Applications
containing Patentably Indistinct Claims,” 71
Fed. Reg. 48 (January 3, 2006)
14

15. (1) Continuing Examination
• The revised rules require that a second (or
subsequent) continued examination filing be
supported by a showing as to why the
amendment, argument, or evidence “could not
have been” previously submitted.
• The showing is in the form of a petition that
the USPTO estimates would take 2 hours to
prepare. (Proposed 37 C.F.R. § §1.78(d)(1)(iv)
and 1.114(f))
15

16. (1) Continuing Examination
Proposed 37 C.F.R. § 1.78
• Definition: A “Continuing Application” is a
continuation, divisional or continuation-in-part
(CIP) application.
– Applications that claim benefit of a provisional
application or priority to a foreign application are
excluded from the definition.
16

17. (1) Continuing Examination
Proposed 37 C.F.R. § 1.78(d)(1)(i)
– A nonprovisional application that is a continuation or CIP
application may claim benefit of only a single prior-filed
application and even then only if:
– Benefit of the prior-filed application is not claimed in any
other nonprovisional application other than a divisional
application; and
– NO request for continued examination (i.e., NO RCE) had
been filed in the prior application.
17

18. (1) Continuing Examination
Proposed 37 C.F.R. § 1.78(d)(1)(i) example
B nonprov C nonprov
↑Con/CIP ↑Divisional only
________________________
↑
A (nonprov/no RCE)
Both B and C can claim benefit of A
No showing needed for either B or C
18

19. (1) Continuing Examination
Proposed 37 C.F.R. § 1.78(d)(1)(iii) example
C
↑ Con/CIP
B (no RCE)
↑ Div
A (Restriction/Lack of Unity)
Claims in B are a non-elected group from X
No showing needed for either B or C
19

20. (1) Continuing Examination
37 C.F.R. § 1.78(d)(1)(i) example: two CIP’s
C (claims new matter “B”)
↑ CIP
B B (new matter “B”)
↑CIP
A
No showing needed for C if C only claims matter
new in B
20

21. (1) Continuing Examination
Proposed 37 C.F.R. §§ 1.78(d)(iv) and 114 example
C with “showing”
↑ CIP/Con/Div/>1 RCE
B
B is a nonprovisional application and either
- an RCE has been filed in B or
- B claims benefit of another nonprovisional application
C has new argument/evidence/amendment
21

22. (1) Continuing Examination
Proposed 37 C.F.R. § 1.78(f)(1) – Identification
Applicant must identify – in the “cross-reference
to related applications” section –
- all non-provisional applications/patents with
benefit or filing dates within 2 months of each
other
- that name at least one common inventor
- that are owned by the same entity
22

23. (1) Continuing Examination
Proposed 37 C.F.R. § 1.78(f)(1) – Identification (cont.)
• Must provide ID within 4 months of filing or of
entering U.S. national phase
• ID required even if the applications do not
have similar subject matter.
[Question: would such identification also make those
applications available to the public?]
23

24. (1) Continuing Examination
Proposed 37 C.F.R. § 1.78(f)(2) – Identification
If circumstances under 78(f)(1) exist
- And if multiple applications have the same
filing/benefit date
- And contain substantial overlapping disclosure
- Applicant must explain how the claims are patentably
distinct or submit terminal disclaimer.
24

25. (1) Continuing Examination
Proposed 37 C.F.R. § 1.78(f)(2) – Identification
If any other (nonprov) application has been
identified as containing patentably indistinct
claims, absent a sufficient explanation, the
Office may require elimination of such claims
from all but one of the applications.
25

26. (1) Continuing Examination
Proposed 37 C.F.R. 1.114(f)
• Only a single RCE may be filed per application
• No RCE may be filed in any continuing
application other than a divisional unless the
RCE is accompanied by a petition and fee and
showing as above
26

27. (1) Continuing Examination
Proposed 37 C.F.R. § 1.114(f) example
B C
↑Con/CIP ↑Div only
________________
↑
A (nonprov/no RCE)
Both B and C claim benefit of A
You could not file an RCE (or CON) for B without petition and a showing
You could file an RCE in C
You could file a CON of C if there was no RCE in C
27

28. (1) Continuing Examination
• Proposed changes to Rule 78 apply to any
application filed on or after the effective date
of the final rule.
• Proposed changes to Rule 114 apply to any
application in which an RCE is filed on or after
the effective date of the final rule.
28

29. (1) Continuing Examination
Practice recommendations
(1) Review portfolios of pending applications
(2) Decide whether to file a continuing
application soon - to grandfather it under the
current continuing application rules
(3) Budget for possible grandfather filings in
your 2006/2007 budget
29

30. (1) Continuing Examination
Practice Recommendations (cont.)
(4) Actively prosecute in PCT Chapter II in front of the US/IPEA
to get another round with the U.S. examiner
- interview the examiner
- attempt to settle novelty/inventive step issues
(Enablement/written description will only be raised in U.S.
National Stage)
(5) Do not use “bypass” § 371 by direct filing to enter U.S.
National Stage; the § 111 application will be your one
allowed continuation; must use 371 procedures
30

31. 2nd Notice of Proposed Rulemaking
“Changes to Practice for the Examination of
Claims in Patent Applications,” 71 Fed. Reg.
61 (January 3, 2006)
31

32. (2) Examination
The USPTO proposes
– to focus initial examination on claims designated
by applicant as representative claims.
– to defer examination of non designated claims
until the application is otherwise in condition for
allowance.
32

33. (2) Examination
What are the “representative claims”?
- all of the independent claims; and
- certain designated dependent claims
33

34. (2) Examination
• If the Applicant fails to expressly designate
any dependent claims for initial examination,
the USPTO will initially examine only the
independent claims.
• Even if there are 10 or fewer claims in the
application, the Applicant must expressly
designate dependent claims for initial
examination.
34

35. (2) Examination
• The mere presentation of a dependent claim is
not a designation for initial examination.
• A designated dependent claim (including a
multiple dependent claim) must depend only
from an independent claim or from another
designated dependent claim.
35

36. (2) Examination
Example:
Claim set has 3 independent claims and 20
dependent claims.
– The 3 independent claims are automatically
selected for initial examination.
– Applicant can designate 7 of the dependent
claims.
36

37. (2) Examination
• A claim that refers to a different statutory class
of invention will be treated as an independent
claim even if written in dependent form.
37

38. (2) Examination
An “Examination Support Document” (ESD)
under 37 C.F.R. 1.261 must be submitted if
• There are more than 10 independent claims
• Applicant desires initial examination of more
than 10 claims
38

39. (2) Examination
If the total number of independent claims (or independent
plus designated claims) exceeds 10, and no ESD has been
submitted, and it appears this was inadvertent:
– Applicant will be sent a notice with a 1 month period (not
extendable) to supply the ESD;
– Cancel claims/rescind designation; or
– Submit a suggested restriction accompanied by an election
without traverse to an invention drawn to a group with
fewer than 10 claims.
39

40. (2) Examination
A restriction may still be required.
• If election results in withdrawal of independent
or designated claims, Applicants may
designate additional representative claims for
initial examination so long as the total of all
claims does not exceed 10.
40

41. (2) Examination
Markush Claims
• The Office is soliciting comments on how to
handle Markush claims under the new practice
41

42. (2) Examination
One Markush option:
Each alternative would be counted as a separate
claim for examination purposes unless:
– The Applicant shows that each alternative includes a
common core structure AND common core property or
activity, in which the common core structure constitutes a
structurally distinctive portion in view of the existing prior
art and is essential to the common property or activity.
42

43. (2) Examination
“Examination Support Document” (ESD) must include:
(1) a statement that a preexamination search was
conducted,
– an identification of the field of search by class and
subclass
– the date of the search where applicable
– for database searches, the search logic or chemical
structure or sequence used as a query, the name of the
files searched, the database service and the date of the
search
43

44. (2) Examination
The preexamination search must include:
• US patents and patent application publications
• Foreign patent documents
• Non-patent literature
– Unless the applicant can justify why no references
more pertinent than those already identified are
likely to be found in the eliminated source
44

45. (2) Examination
• The preexamination search must encompass
all of the features of the independent claims
and must cover all of the features of the
designated dependent claims
• A search report from a foreign patent office will
not per se suffice – it must satisfy all of the
search requirements set out in Rule 261
45

46. (2) Examination
ESD requirements (cont.)
(2) An IDS
(3) An identification of all the limitations of the
independent claims and the designated
dependent claims that are disclosed by the
references cited in the IDS
(4) A detailed explanation of how each of the
claims are patentable over the references
46

47. (2) Examination
ESD requirements (cont.)
(5) A concise statement of the utility of the invention as
defined in each of the independent claims
(6) A showing of where each limitation of the
independent claims and the designated dependent
claims finds written description support in the
specification of the instant application and any
benefit application
47

48. (2) Examination
Proposed 37 C.F.R. § 1.133
• Would allow the examiner to request an
interview with applicants before the first office
action
48

49. (2) Examination
Proposed 37 C.F.R. 1.704
• Failure to file an ESD when necessary is a
circumstance that constitutes a failure to
engage in reasonable efforts to conclude
processing or examination of an application –
thus affecting patent term adjustment.
49

50. (2) Examination
The proposed examination rules would apply to
– any application filed on or after the effective date
of the final rule; and
– to any application in which a first office action on
the merits was not mailed before the effective date
of the final rule.
50

51. (2) Examination
• Applicants who filed before the effective date
of the final rule would be allowed to submit
either an ESD or a new set of claims to avoid
the need for an ESD.
51

52. (2) Examination
Strategy –new applications
(1) Consider paying for extra groups in the PCT so that
all the claims are searched and use Chapter II and
the US IPEA to get an extra “round” of examination
– preferably interviewing the US Examiner.
(2) Consider filing multiple applications (with a terminal
disclaimer); each with claims of a different scope if
you have a reason why the cases should be kept
separate.
52

53. (2) Examinations
Strategies for New Examinations (cont.)
(3) Draft claim sets now that are amenable to
review under the proposed regulations.
(4) Protect members of Markush groups by also
having separate dependent claims to the
most important members of the Markush
group.
53

54. (2) Examination
Recommendations – Pending Applications
(1) Review portfolios for applications due for a
first office action on the merits this year – work
with the examiner to obtain a first office action
on the merits before a final rule would take
effect (maybe never but, if the rules were to be
finalized, probably not until late summer at the
earliest).
54

55. (2) Examinations
Strategies – Pending Applications (cont.)
(2) Consider “mega” interview on all members of
a family of cases so as to expedite first office
actions in unexamined members of that family.
(3) Minimize time in OIPE by electronic filing
applications likely to go to art units with little
backlog (E-file using the new EFS-Web –
general release date March 17th).
55

56. A Shooting Gallery for Patents
• Consider a world in which these rules were made
final, and also post-grant oppositions were allowed.
• One could oppose an issued patent knowing that the
patentee probably had no continuation application on
file to act as a safety net.
• The patentee would be pressured to take only the
most narrow of claims to survive opposition – much
more so than if the patentee had a “safety net”
continuation application on file.
56

57. Final Rulemaking Implementation
John Doll:
Expects final rulemaking in about 4 months
(around September)
There will be a 30-60 day (and maybe a 90 day)
period before the final rule takes effect.
57

58. Possible Compromises
• Retain current divisional practice (i.e., where it is not
required to file all divisionals off the application in
which the restriction was made
• Retain unrestricted RCE practice and allow 2
Con/CIP before a petition is needed
• Expand ability of 3rd party submissions
• Examine all claims but increase excess claim fees
58

59. Other Potential USPTO Options
• Examination options:
– Deferred examination (up to 3 years)
– Accelerated examination (allowance in 12 months)
– Suite of options for examination with varying levels of examination and
enforcement rights
• Pre-Grant Opposition Pilot Program
• Increase fees for successive continuations/RCEs
• Community Patent Review
• Permit applicant requested pre-first office action interview
59

60. * Credits: Several slides and statistical data are taken from
presentations by John Doll and James Toupin of USPTO and
made available to the public in February 2006.
60

61. THANK YOU!
Michele A. Cimbala, Ph.D., Esq.
mcimbala@SKGF.com
61