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Re: Changes to Implement the Patent Business Goals

Dear Sir:

I have reviewed the advance notice of proposed rulemaking for various changes to the patent regulations, as requested for comment at 1215 OG 87 (Oct. 27, 1998), and I have a few comments and suggestions concerning some of the topics. I am a registered patent attorney with the law firm of Walker, McKenzie & Walker, P.C., in Memphis, Tennessee, and these comments are submitted personally and also on behalf of our firm. I do not comment here on behalf of any of our clients.

Comments on selected specific topics:

(1) Simplifying Request for Small Entity Status

I have two concerns about the statement in the proposed rule that "[p]ayment of the (exact) small entity basic filing fee would be considered an assertion of small entity status." The first concern is prompted by the recent uncertainty during the months of October and November 1998 as to what the "exact" small entity basic filing fee was or would be. The Patent Office issued periodic and sometimes daily updates as to changing procedures for submission of filing fees during the debate and passage of the recent changes to the patent fees, with these changes being only available on the U.S.P.T.O. internet web site. Similar problems have happened in past years when the U.S.P.T.O. fee schedule changes without adequate advance notice. Many small entity applicants may not have access to the internet. For other applicants who do have access to the internet, the U.S.P.T.O. server is often inaccessible due to processing overloads. Requiring a positive and affirmative statement of small entity status would eliminate the expense and effort to applicants of correcting an incorrect determination of small entity status made by the U.S.P.T.O. based on fee amounts alone.

The second concern is that clerical errors occasionally occur in the preparation of fee checks to the U.S.P.T.O. Such errors might occur, for example, when new "small entity" facts are learned very shortly prior to filing an application. For this reason, many, if not most, patent firms and patent attorneys maintain a Deposit Account at the Patent Office to ensure that the correct fees will always be available to the Patent Office at the time of filing and/or that a repository for refund of overpayments will be available. My concern is that, if an affirmative claim of small entity status is not required, then inadvertent mistakes as to small entity status could prove costly for applicants (and their attorneys) to correct, if such correction is even possible. Additional variations of the problem occur if the check amount or authorization to charge the deposit account do not match an accompanying fee transmittal form and/or return postcard. Which fee amount is to be used by the Patent Office in determining the "exact" filing fee payment that is being made as an assertion of small entity status? Again, requiring a positive and affirmative statement of small entity status would eliminate the expense and effort to applicants of correcting an incorrect determination of small entity status made by the U.S.P.T.O. based on fee amounts alone.

For all of these reasons, I would request and hope that a positive and affirmative statement be required by the applicant as to its small entity status, and that the U.S.P.T.O. not make a determination of small entity status based simply on the filing fee submitted. If the U.S.P.T.O. desires to simplify the current requirement of a separate Verified Statement, then I suggest that a checkbox be added to the Declaration stating that "small entity status is claimed". By including such a checkbox on the Declaration, with its required oath as to accuracy, applicants will not be able to later claim that the small entity status was granted in error unless the applicant had made such a positive claim, in which case the error would have to be inadvertent and without deceptive intent and without fraud. See 37 C.F.R. §§ 1.28©-(d). The addition of such a checkbox would simplify the U.S.P.T.O. procedures, be a much lesser burden on the applicant and the U.S.P.T.O., and would still provide the necessary safeguards to ensure that small entity status is only being claimed when appropriate.

(4) Limiting the number of claims in an application (37 C.F.R. § 1.75)

The U.S.P.T.O.'s concerns all relate to delays in examination and unnecessary pendency for applicants other than the applicant(s) submitting such applications with large number of claims, and some short discussion is given in the U.S.P.T.O. notice that a series of continuing applications could be filed, each containing some subset of the large number of claims that otherwise would be present in a single application. The solution to these problems is much simpler than suggested by the U.S.P.T.O. The better solution is to have a progressively escalating fee schedule, charging whatever is needed by the U.S.P.T.O. to bear the additional burden of such an excessive number of claims. For example, the charge for each independent claim past 6 could be set at $500.00 and the charge for each total claim past 40 could be set at $100.00. Additional escalating fees could be charged for independent claims past 20 and for total claims past 100, etc. This would properly place the burden for these excessive claims on the applicants filing such applications, would not prejudice applicants with such applications, and would not prejudice other applicants who do not file such an excessive number of claims. The additional fee charges would be a recognition of the fact that complexity of examination does not scale linearly with the number of claims. Such a solution would also reduce the significant burden on applicants to submit simultaneous corresponding information disclosure statements in all related co-pending continuing applications for references cited during prosecution of any of the members of the co-pending family, when the members of the co-pending family had been filed solely to remain under the total of forty claims per application. See M.P.E.P. § 609 at page 600-103 (7 th ed. July 1998).

Another problem that would apparently be faced if the U.S.P.T.O.'s proposed claim limits were adopted would be the dilemma faced by applicants when an Office Action rejects independent claims but allows claims dependent therefrom if rewritten into independent form. For example, consider the case of an application having six independent claims and 34 dependent claims (i.e., forty total), with all dependent claims separately depending from a single broad independent claim. If an Office Action allowed all claims except that single broad independent claim and indicated that all dependent claims would be allowable if rewritten into independent form, the applicant would not be permitted to rewrite those claims without filing six additional continuation applications so that each would have six or less independent claims as rewritten. If the U.S.P.T.O. proposed rule were to be modified to provide an exception for such cases, then applicants might routinely file a first independent claim simply requiring "an article" with no limitations and no other text, and then have all claims dependent from that first claim (and adding necessary limitations) as a means of entry into such a loophole exception for applications having six or less independent claims at filing but more than six independent claims during prosecution. Again, the only proper solution is a progressively escalating fee schedule to place the burden of an excessive number of claims where it belongs and to allow the U.S.P.T.O. to recoup its expenses of examination.

5. Harmonizing standards for patent drawings (37 C.F.R. § 1.84)

This proposal should not be implemented unless coordinated with the Trademark Office portion of the U.S.P.T.O. Small law firms and independent practitioners usually only have a single printer attached to their computer(s) and also only have a single photocopier. Many printers and photocopiers can only accommodate a single size of paper. The trademark regulations presently discourage the filing of applications and of prosecution papers on A4 size paper. See 37 C.F.R. § 2.31. Trademark drawings are required to be on letter-size paper, and A4 size paper is not permitted. See 37 C.F.R. § 2.52©. Filings before the T.T.A.B. must be on letter-size paper, not A4 size paper. See 37 C.F.R.§§ 2.128(b) and 2.142(b)(2). For those practitioners whose practice involves both patent and trademark practice, and especially for a small law office having a photocopier or networked printer with a single paper source, it is impractical to switch paper each time a drawing for the Patent Office needs to be printed or photocopied, as opposed to papers for the Trademark Office. If the U.S.P.T.O., as a whole, wishes to switch its permitted paper size to A4 size paper, then practitioners could accommodate such a switch by switching their entire office to use only A4 size paper. In the absence of such a coordinated rule change at the Trademark Office, the proposed elimination of the optional use of 8.5 x 11 inch paper for patent drawings is improper. If different branches of this same government agency are permitted to have incompatible paper size requirements, an undue burden would be placed on those practitioners who practice both patent and trademark law before the U.S.P.T.O.

9. Imposing limits/requirements on information disclosure statement submissions (37 C.F.R. § 1.98)

As a practical matter, applicants must necessarily submit all known references and prior art that might even arguably possibly be material to the examination of their application, whether they believe such references to be material or not, lest they risk an accusation at trial, during subsequent enforcement of their patent, of failure to meet their duty of disclosure. As a practical matter, applicants' belief as to the materiality of the references and prior art is immaterial because, in the end, the determination will be made at trial during enforcement of the patent. As a result, most applicants adopt a very conservative approach and freely submit all material that might even conceivably be material to examination of their application, and this policy is wholly caused by the U.S.P.T.O.'s adoption of the duty of disclosure requirements and the subsequent interpretation of those requirements by the courts. Such broad disclosure has the benefit of placing before the U.S.P.T.O. a wealth of prior art, helps ensure that unacceptably-broad patents are not issued, and strengthens the resulting patents because, in order to invalidate an enforced patent at trial, alleged infringers must produce prior art that is closer than any prior art of record.

The U.S.P.T.O.'s concerns, like those relating to the excessive number of claims, relate to the burden on the U.S.P.T.O. in cases where voluminous prior art submissions are made. The proper solution is to allocate the costs of examination to such submitters and to charge for information disclosure statement submissions with a progressively escalating fee schedule, whether on a per-document basis or on a per-page basis.

Furthermore, because of the practical necessity of submitting all references that might even conceivably be material to examination, even if applicants do not believe the reference to be material, similar claims of fraud and failure to meet the duty of disclosure might arise at trial during an action for enforcement of the patent if applicants fail to appreciate the materiality of a particular reference in the proposed required description of the reference. Alleged infringers would welcome such an opportunity to confuse and cloud subsequent actions for patent infringement with automatic allegations of failure to meet the duty of disclosure because of allegedly incomplete descriptions of the provided references.

For these reasons, the proposed revision to 37 C.F.R. § 1.98 to require a unique description of each reference is unreasonable.

The proposed revision to 37 C.F.R. § 1.98 to require a statement of

personal review of each citation is reasonable. However, the proposed

requirement requirement, that such a statement state that the citation is

relevant to the claimed invention and is appropriate to cite to the

U.S.P.T.O., is not reaonable because of the similar reasons given

hereinabove regarding the requirement of a unique description of each

reference. Applicants and their attorney may believe that a particular

reference might not be material to examination but instead feel that the

reference should and must be submitted lest they incur a risk at subsequent

trial that alleged infringers might raise the issue of failure to meet the duty of disclosure and might convince a court that such a duty of disclosure had not been met. By adding a requirement that the reviewer state that each citation is relevant and appropriate to cite, the U.S.P.T.O. is opening the door at subsequent trials for patent infringement to allegations of failure to meet the duty of disclosure, this time not for failing to disclose, but instead for disclosing too much.

Again, all of the U.S.P.T.O.'s concerns regarding the burden to the U.S.P.T.O. would be more properly addressed by allocating the costs of examination to submitters and to charge for information disclosure statement submissions based upon a progressively escalating fee schedule, whether on a per-document basis or on a per-page basis.

The proposed revision to 37 C.F.R. § 1.98 to require copies of every cited

reference to be supplied are reasonable and supported.

10. Refusing information disclosure statement consideration under certain circumstances (37 C.F.R. § 1.98).

This proposed change to the rules is improper for the same reasons discussed above concerning item (9). Again, the proper solution is to allocate the costs of examination to such submitters and to charge for information disclosure statement submissions with a progressively escalating fee schedule, whether on a per-document basis or on a per-page basis. If the applicant is willing to pay the appropriate fees for U.S.P.T.O. consideration of lengthy information disclosure statement submissions so as to ensure that their subsequent patent will be held valid during subsequent litigation for infringement, the U.S.P.T.O. should consider the information disclosure statement and charge accordingly.

14. Providing for presumptive elections (37 C.F.R. 1.141)

This proposed change is improper. The current U.S.P.T.O. practice, of having the examiner telephone the applicant's attorney and obtain a timely election, is efficient and works well. The current practice should not be changed because a change will increase the cost of patent application preparation to applicants due to the need to reorder claims following preparation and prior to filing. Such a reordering of the claims will also introduce errors into antecedent referencing of claims by those claims dependent therefrom because of the renumbering of claims that will occur.

21. Creating a PTO review service for applicant-created forms

I am concerned about the background discussion statements from the U.S.P.T.O. that future submissions would be either by "specially formatted paper templates or by electronic transmission". At the instant that this response and comment is being prepared, many U.S.P.T.O. forms on the U.S.P.T.O. internet site are out-of-date and incorrect and cannot be used "as-is". See, e.g., Form PTO-SB-17 (Fee Transmittal Form), showing fee amounts in effect prior to the November 10, 1998, fee changes almost a month ago. Other forms do not provide for adequate or clear responses by applicants using the preprinted form text (e.g., whether the complete fees, or ONLY deficiencies, are authorized to be charged to a deposit account). Insofar as much as this proposal might be a step toward permitting the filing of ONLY those forms that are U.S.P.T.O. approved, it is most strenuously objected to, as situations will always arise in which reviewed forms will not be adequate for a particular case.

Insofar as this proposed service is only to provide an indication by vendors of forms software that their provided forms have been reviewed for compliance with the requirements of the U.S.P.T.O., the proposed service is supported.

Respectfully submitted,

Russell H. Walker

Walker, McKenzie & Walker, P.C.

6363 Poplar Ave., Suite 434

Memphis, Tennessee 38119-4896

Tel: 901-685-7428

Fax: 901-682-6488

United States Patent and Trademark Office
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