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Comments Regarding Changes Proposed by the PTO to Implement the Patent Business Goals

January 8, 1999

Assistant Commissioner for Patents

Box Comments - Patents

Washington, D.C. 20231

Attention: Hiram H. Bernstein

Re: Comments Regarding Changes Proposed by the

PTO to Implement the Patent Business Goals

Our File: 6000-G

Dear Mr. Bernstein:

Set forth in this letter are the combined comments of the below-identified eight (8) senior patent attorneys of the law firm of Panitch Schwarze Jacobs & Nadel, P.C. in response to the publication which appeared in the October 5, 1998 edition of the Federal Register. We hope that our comments will be useful and will be taken into consideration in connection with further Office proceedings in connection with the 21 identified topics. We all endorse the expressed goals and spirit of the Office in proposing the changes, and we agree with and endorse many of the changes as proposed. However, there are several of the proposed changes which we find objectionable either in concept, in the proposed implementation or both. Accordingly, set forth below are our comments with respect to each of the 21 topics.

1. Simplifying Requests for Small Entity Status - We support the proposal to simplify applicant's request for small entity status by eliminating the small entity statement forms and allowing the payment of the small entity basic filing fee to be considered an assertion of small entity status. The signing of multiple forms, where joint ownership or licensing of multiple rights is involved has become a significant problem. More importantly, the present inability to obtain signature(s) before the application filing results in extra work for our office and the PTO, including the need to timely file a request for refund of one-half the filing fee or the alternative of paying no filing fee and then having to pay the surcharge for late payment.

As discussed more fully below under proposal 2, the need (in the absence of a signed small entity statement) to pay the full large entity filing fee and to request a refund within two months of filing represents a substantial disincentive to our office to pay any filing fee at all if the signed forms have not been completed by client. Thus, in many cases, we would rather pay no filing at all upon initial filing rather than risk the possibility of not being able to obtain the forms from the client and request the refund withing two months. If this rule proposal to eliminate the need for signed small entity statement forms were adopted, we believe that most of the these "no fee filings" from our office would be eliminated.

2. Requiring Separate Surcharges and Supplying Filing Receipts - We strongly oppose this proposed rule change to charge separate surcharges for the delayed submission of any oath/declaration and the delayed submission of the application filing fee, unless those two items are submitted separately at different times. The proposed tradeoff of providing new services regarding the provision of Filing Receipts is bogus, since those services are not needed or should be provided by the PTO without question. While we appreciate the need of the PTO for an incentive to pay the basic filing fee on filing of the application, we believe that sufficient incentives are provided in other proposed rule changes and that the alleged cost for additional processing is not real or significant.

The background for this proposed change states that 31% of all non-provisional applications are filed as missing parts applications. However, it is not stated how many of those applications are filed with only the filing fee missing or in how many cases the filing fee and the executed oath/declaration are submitted at different times. We suspect that both of these numbers are very low. That is, we believe that the very large majority of missing parts applications are missing both the oath/declaration and the filing fee, and that in virtually all of those cases, the filing fee and the signed oath/declaration are filed on the same date. Therefore, the argument that the application would be twice processed for a submitted missing part probably happens very infrequently, and in those infrequent cases perhaps a separate surcharge should be required. However, where both of those missing items are submitted together, it is hard to justify a PTO charge for additional processing. Whether the filing fee is submitted upon original filing or with the missing oath/declaration, the processing of the filing fee through the Finance Branch is essentially the same, and does not result in additional work for the PTO.

Moreover, the proposed rule change for eliminating small entity statements should eliminate many of the instances involving late payment of the filing fee. A further incentive to paying the filing fee upon filing the application would be liberalization of the two-month non-extendable deadline for requesting refund. Thus, to the extent that filing fees are not paid upon filing because of the unavailability of the signed small entity statement (the major reason in our office), there would be no good reason to delay payment of the filing fee if applicant could be assured of obtaining a refund at virtually any time. We strongly recommend that the refund policy be modified to allow a request for refund up to six months or a year after filing, or even up to final processing of the application (such as by allowing a credit for the issue fee). After all, the PTO or the federal government has the use of the money all of this time, and no justification is seen for unduly limiting the period for requesting refund. Also, allowing refunds for other reasons (with a reasonable handling fee) would encourage early payment of the filing fee.

Finally, the additional filing fee services are bogus because (1) no Filing Receipt is necessary if a Notice of Missing Parts is issued, since that provides the necessary information needed by applicant; (2) the vast majority of corrected Filing Receipts are due to PTO error and should be provided without fee; (3) applicants (and their attorneys) generally do not care whether a copy of the Filing Receipt is placed in the application file. Therefore, the PTO would not be providing any additional services which are of real value. All that is needed is one correct filing receipt after all of the requirements have been completed.

3. Permitting Delayed Submission of an Oath or Declaration and Changing the Time Period for Submission of the Basic Filing Fee and English Translation - We have no strong feelings about the delayed submission of an oath or declaration since we agree with the PTO conclusion that it is generally in the best interests of applicants and practitioners to have the oath/declaration completed as early as possible to avoid later problems. However, we strongly object to the proposal for changing the time for submission of the basic filing fee and English translation to one month (plus any extensions) from the filing date of the application .

First of all, such a proposal would be only marginally workable if the PTO provides the Filing Receipt within a week or two after filing. Thus, without the Filing Receipt , applicants would have no way of properly identifying the application when submitting the late filing fee or translation. Second, although the PTO is getting close to issuing Filing Receipts within two weeks after filing, with mail delays and the like, this still leaves very little time before the one-month deadline for applicants and their attorneys to process the Filing Receipt and submit the missing parts based upon the application number.

Frankly, we have little faith in the PTO ability to consistently provide a correct Filing Receipt in that short a period of time. In the past, the time for receiving a Filing Receipt from the PTO has varied from about one month to as much as five or six months or more in the past year. As a result, this rule would mean that applicants would almost always have to request an extension of time and pay an extension fee (in addition to the surcharge) for submitting a missing part.

If a one-month rule is to be adopted for late submission of the filing fee and English translation, it should be one month from issuance of the Filing Receipt or Notice of Missing Parts and not from the application date. This relieves applicants of the burden of depending upon the PTO timing of the Filing Receipt or Notice of Missing Parts. Alternatively, the rule could be two months from filing or one month from notice, whichever is later.

Most importantly, we strenuously object to the PTO proposal to eliminate the current practice of mailing a "Notice To File Missing Parts" or similar deficiency notice. We have no objection to including the notice of deficiencies in the Filing Receipt, and perhaps that would be more efficient. However, we believe that applicants and practitioners have an absolute right to some sort of notification from the PTO that an application is considered to be deficient in one or more respects. Of course, it is true that we know when we have not paid the filing fee or not submitted an English translation or oath/declaration. However, that does not address the frequent problem of the PTO losing or misplacing documents which we do timely submit. Therefore, it is essential to have some indication of what the PTO does and does not have in the application file, so that applicants and practitioners can verify that the PTO has what applicant believes to have been properly submitted.

In fact, a "Notification of Missing Requirements" type form (as used by the International Division for U.S. national phase applications) which includes a checklist of each document received by the PTO upon filing would be much more helpful to applicants than the present Filing Receipt system, in which it is never known whether the PTO has associated all of the submitted documents with the file until a First Office Action is received and it becomes apparent that the Examiner does not have such documents as a Priority Document, Information Disclosure Statement, Preliminary Amendment, or the like, which applicant in fact submitted upon filing or shortly after filing.

4. Limiting the Number of Claims in an Application - We oppose the proposed Rule change for the following reasons:

A. The PTO does not have the legal authority to limit the number of claims in an application.

To be within the PTO's rule making authority, the rule must be within the PTO's statutory authority, it must be reasonably related to the purposes of the enabling legislation and it must not do violence to due process. The statute at issue, 35 U.S.C. Section 112, requires that a patent application conclude with "one or more claims particularly pointing out and distinctly claiming the subject matter that applicant regards as his invention."

The PTO relied on Patlex Corp. v. Mossinghoff , 758 F.2d 594, 606 (Fed. Cir. 1985), for its statement that a rule limiting the number of claim in an application does not exceed the PTO's statutory authority, is reasonably related to the purposes of the enabling legislation and does not violence to due process. However, the Patlex court noted that a statute, valid on its face, may be administered in such a way that a constitutional or statutory guarantee is violated.

[The courts] must reject administrative constructions of the statute, whether reached by adjudication or by rulemaking, that are inconsistent with the statutory mandate or that frustrate the policy that Congress sought to implement.

Id. at 605 (citations omitted). The underlying policy of the requirement set forth in 35 U.S.C. Section 112 is to require the patentee to describe his invention so that others may construct and use it after expiration of a patent and to inform the public during the life of the patent of the limits of the monopoly asserted. "[T]he constitutional purpose of the patent system is promoted by encouraging applicants to claim, and therefore to describe in the manner required by 35 U.S.C. Section 112, all aspects of what they regard as their inventions. . . ." Application of Kuehl , 475 F.2d 758 (CCPA 1973).

The PTO also relied on Fressola v. Manbeck , 36 USPQ2d 1211, 1214 (D.D.C. 1995) for the proposition that the PTO is not precluded from limiting the claims in regard to matters of form. The court in Fressola was concerned with the one-sentence rule contained in MPEP Section 608.01(m). In its holding, the court emphasized that the PTO rule at issue was concerned with matters of form, and did not interfere with applicant's ultimate control over the substance of his claims.

Because the rule only affects the technical form of a claim, it appears to be a prototypical "rule[] of agency organization, procedure, or practice . . . [a] useful articulation of the [organization, procedure, or practice] exemption's critical feature is that it covers agency actions that do not themselves alter the rights or interests of parties, although it may alter the manner in which the parties present themselves or their viewpoints to the agency."

Id. at 1215 (citations omitted). In contrast, the promulgation of a rule limiting the number of claims applicant may file would seriously impinge the inventor's ability to present his invention by particularly pointing out and distinctly claiming the subject matter of his invention. The new rule would "interfere with applicant's ultimate control over the substance of his claim," Id. at 1214, and is not reasonably related to the purposes of that statute.

It is thus clear that the proposed rule limiting the number of claims applicant can present in his application is over broad, and thus violates due process. The PTO currently has mechanisms in place to deal with possible abuses, such as the restriction requirement and the undue multiplicity rejection of MPEP 2173.05(n), which is used when excessive claims confuse or obscure the invention. The promulgation of the proposed rule will deprive inventors of their due process by preventing them from presenting claims which may be essential in distinctly claiming their invention.

B. The proposed rule change does not address potential statutory double patenting issues which may arise when an invention cannot be properly claimed within the limits proscribed by the rule and it becomes necessary to file more than one application covering the same invention.

5. Harmonizing Standards for Patent Drawings - We are in favor of harmonizing the standards for patent drawings to conform to the PCT requirements, but an easily accessible source of authority is needed. The U.S. Patent and Trademark Office (PTO) should add a chapter to the M.P.E.P. and amend 37 C.F.R. 1.84 to provide a readily available source for the drawing requirements. These materials can be updated as the PCT requirements are updated.

6. Printing Patents in Color - The proposal to permit color photographs/ drawings is inconsistent with the proposal to harmonize the drawing rules with the PCT. PCT drawing rules do not permit color photographs/drawings. We are not opposed to color drawings or photographs. However, the applicant should have the option of filing color photographs/ drawings as informal drawings and submitting black and white photographs/drawings as the formal drawings to avoid the color printing fee.

7. Reducing Time for Filing Corrected or Formal Drawings

(1) The proposal that formal drawings be submitted within one month of the notice of allowance does not permit enough time to have formal drawings created. Notices of allowance often take a week to arrive from the PTO. A period of two months is more reasonable.

(2) We are against requiring the submission of formal drawings in response to any office action indicating allowable subject matter. Often claim coverage indicated as being allowable is not satisfactory to the applicant. If additional coverage is not later obtained, the application is abandoned. Requiring the submission of formal drawings at this stage of the prosecution of the application would often result in unnecessary cost to the applicant. Moreover, further drawing changes may occur after issuance of an office action indicating allowable subject matter, requiring double draftsman work and increased cost to the applicant.

8. Permitting Electronic Submission of Voluminous Material - We generally agree with this proposal. However, we are concerned that if this proposal is implemented, the Rules must also be changed to officially make the machine-readable copy an official part of the application file. Under the current policy, if a disc is submitted in connection with an application, it is not considered part of the file and, therefore, is not made available to members of the public after the patent has been issued. If, as set forth in the comments to this proposal, Examiners rely more heavily upon the electronic form of sequence listings as opposed to the paper form, it is imperative that the public be given access to the electronic form since that is the basis upon which the examination occurred and, presumably, supports patentability. It has been our experience that the electronic version of a sequence listing will not necessarily be in full conformity with a paper or printed version of the sequence listing and so it is important that all of the information used in examining the application be made available to the public once the patent has been issued. The best way that we know of for making sure that this occurs, is to formally require that the electronic submission be made a part of the file and that the Office provide facilities to allow members of the public to make electronic copies of the disc in conjunction with obtaining other file history information.

9. Imposing Limits/Requirements on Information Disclosure Statement Submissions - We strongly oppose the requirement that each reference be accompanied by a unique description. We believe that it is the obligation of the applicant and the applicant's counsel to bring the relevant references to the Examiner's attention but that it is not necessary for the applicant or counsel to effectively perform the Examiner's job by making a case for or against patentability with respect to a reference. This determination is best left to the sound judgment of the Examiner.

We strongly oppose the proposed Rule which allows that 10 references be exempt from the unique description requirement. We believe that the number 10 is considered to be too arbitrary and could result in substantial legal questions and challenges should the patent be involved in litigation. The Rules should require that either all or none of the cited art should be accompanied by a description. The selection of an arbitrary 10 citations as being exempt opens up a pandoras box regarding inferences as to the particular 10 references selected. The PTO is not in a position to warrant the manner in which the courts will rule in the future regarding which 10 references are selected in a given application.

We also oppose the requirement that a copy of any cited pending U.S. applications be provided by the applicant. These applications are all available to the Office and providing copies would unnecessarily burden either the patent attorney or the client both in copying and transmitting the pending applications and in later filing a Petition to have the applications expunged from the file, if warranted. Further, there is no guarantee that mistakes will not be made on the part of the Office in connection with the expungement process, potentially resulting in the presence of pending applications in publicly available files after the issuance of a patent. The applicant or his attorney would have no way to even know about such errors on the part of the Office, much less to correct any such errors once the patent was issued with the pending application as a part of the official file.

Although we can understand the problems which may occur when a very large number of references are submitted, we believe that the submission of 15, 25 or 30 references, without specific comments, would be no more burdensome on an Examiner than the submission of 10 references. After all, when an Examiner performs his or her own prior art search, he or she is required to go through hundreds, perhaps thousands of references without any particular comments on the part of the applicant or the applicant's counsel to assist in the search. Additionally, when the disclosure statement is accompanied by a copy of a Search Report issued from some other patent office, it would appear to be unnecessary for the applicant to submit a separate statement. Similarly, in the case of a related application (divisional, continuation, CIP), the submission of a disclosure statement with respect to all of the references cited in the parent application would not seem to require a separate statement of relevance from the applicant. Perhaps the problems faced by the Office could be better addressed by requiring the payment of a fee for the submission of a large number of prior art references where those references were not cited in a related application and/or were not identified as having been cited by a foreign patent office.

10. Refusing Information Disclosure Statement Consideration Under Certain Circumstances - We do not oppose this Rule so long as it is limited to the Examiner's refusal to consider only certain portions of the IDS which are deemed burdensome (with reasons given). We would oppose a Rule allowing an Examiner to refuse consideration of an entire IDS based on one or more references therein being deemed to be burdensome.

11. Providing No Cause Suspension of Action - We do not oppose these changes. We do not believe that a particular maximum period should be established for the suspension since there will be an incentive for the applicant to minimize the suspension time due to the corresponding reduction in patent life. We do not believe that the applicant should be required to submit an executed oath or declaration before a request for suspension is submitted in part because the completion of a declaration or oath may, itself, be the reason for requesting such a suspension. We do not believe that publication of the application would have a chilling effect on others in the same field. Obviously, other countries publish substantially all applications at approximately 18 months after filing and to our knowledge, no chilling effect has occurred.

12. Requiring a Handling Fee for Preliminary Amendments and Supplemental Replies - We do not object to the requirement of a handling fee for preliminary amendments and supplemental replies in certain instances . However, we believe that a one month cutoff after filing or after the 20 or 30 month period in PCT applications is much too short. Instead, the period should be the same as that for Information Disclosure Statements, namely three months after filing. Moreover, if the applicant or practitioner telephones or faxes the Examiner that a preliminary amendment or supplemental reply is being submitted, and the Examiner has not yet acted upon the application or previous reply, no fee should be required. Thus, simple courtesy and cooperation should take care of many of the instances referred to in the discussion of the proposal where papers cross in the mail or do not reach the PTO file in a timely manner.

In stating that the application should be ready for examination when filed, the PTO overlooks that there are often good reasons for the later filing of preliminary amendments, such as later discovered prior art or actions in counterpart foreign applications which may change applicant's strategy for prosecuting the application. In view of the present PTO Rule allowing the filing of Information Disclosure Statements for up to at least three months after the filing of the application, the same Rule should apply for preliminary amendments. Moreover, it would be helpful to have a PTO Rule requiring that an Examiner refrain from examining an application until 3 ½ or 4 months after the filing date. Thus, we find that the situation often arises that an Information Disclosure Statement is filed by our office shortly before the three month IDS deadline after filing and is not matched up with the Patent Office file until several weeks or a month later. As a result, an Examiner who takes the application up for early examination fails to take into consideration a timely filed Information Disclosure Statement. The same thing happens with preliminary amendments which are filed shortly after filing the application.

13. Changing Amendment Practice to Replacement by Paragraphs - We are in favor of the proposed changes since they will bring the Office into conformity with many other patent offices throughout the world and have the potential for reducing printing errors. We believe that this change should only be implemented if a marked up copy of the changed paragraphs or claims are required to be submitted and become a permanent portion of the file since we believe that this will be of a substantial aid in interpreting the prosecution file history after the patent has issued.

14. Providing for Presumptive Elections - We do not oppose the proposed change to restriction practice to eliminate the need for a written restriction requirement and express election in most restriction situations. However, we would oppose this proposed change if it were extended to election of species requirements . Although the discussion of this proposed rule change does not mention species elections, we simply wish to make sure that that was not intended to be included in the presumptive election scheme. Thus, while we can often anticipate restriction requirements and appropriately position the claims to deal with presumptive election, it is much more difficult to anticipate election of species requirements, since there are often many different possibilities, particularly in chemical or biotech cases. In addition, the applicant should be given the opportunity to contest the restriction requirement and, if successful, the second or subsequent Office Action in which the previously restricted claims are first considered by the Examiner should not be permitted to be a final Office Action. To make the second Office Action a final Office Action under such circumstances would be unfair and unduly burdensome to the applicant.

15. Creating a Rocket Docket for Design Applications - We are in favor of these proposed changes.

16. Requiring Identification of Broadening in a Reissue Application - We believe that it is the duty of the Office to make a decision regarding whether or not claim changes or new claims submitted in connection with a reissue application broaden the scope of the initial patent. However, we do not oppose the changes as proposed by the Office as long as it is made clear in the final Rule changes that unintentional failure to identify broadening claims will not be considered to be violation of 37 C.F.R. §1.56.

17. Changing Multiple Reissue Application Treatment - We are not opposed to the changes as proposed.

18. Creating Alternative Review Procedures for Applications under Appeal - While we are very much in favor of the goal of avoiding unnecessary appeals, we do not think that the changes as set forth will be effective in achieving the goal. We believe that there will be many situations in which a second primary examiner reviewer would be unwilling to "take on" another primary or other examiner and so the review process would be of little or no value. If such a review process is going to be implemented, our suggestion would be that the review be conducted by a senior official such as a group director, assistant to a group director or a senior SPE who is clearly a superior to the primary examiner involved with the application. In addition, we believe that the decision of the reviewing person should be binding upon the Office. We are aware of situations in the past where the director of certain groups would not permit an application from his or her group to proceed to the Board of Appeals without his or her review or the review of a senior examiner in the group. We have found this approach to be beneficial in those groups in which it is was implemented. Accordingly, a similar approach with a senior person being the reviewer and with the decision of the senior person being binding on the Office should be pursued.

We favor the opportunity to have the review conducted both before and after the submission of the appeal brief because this will provide a great deal of flexibility to patent attorneys and their clients. There are many situations in which a client, particularly a small client, would be better able to afford a review of this nature prior to incurring the cost of preparing and filing an appeal brief. If such a procedure is developed, it will be necessary to provide a mechanism for extending the time period for filing an appeal brief, without costly extension fees, to permit the pre-brief review to be completed and still allow sufficient time for the preparation and filing of the appeal brief, if warranted.

As an alternative to these proposed changes, perhaps the Board of Appeals could be expanded to reduce the appeal backlog. Alternatively, a second tier of senior Examiners could be "attached" to the Board of Appeals with this tier of Examiners performing the proposed preliminary reviews. Having the preliminary review conducted in connection with the Board, as opposed to using some other Examiner in the same examining group, may provide sufficient isolation to permit a more unbiased review.

19. Eliminating Pre-Authorization of Payment of Issue Fee - We are not opposed to the changes as proposed.

20. Reevaluation of the Disclosure Document Program - We are not in favor of the changes as proposed because we believe that the disclosure document program continues to serve a valid purpose - effectively establishing a date of invention for a small independent inventor at very low cost. We believe that there are many situations in which an independent inventor could be intimidated by the prospect of filing a provisional patent application. Moreover, we believe that the $75 government filing fee for a small entity provisional application would have a substantial chilling effect on many independent inventors. After all, for the cost of filing a single provisional patent application, an independent inventor could make seven submissions under the disclosure document program. While we agree with all of the comments set forth in connection with this proposal, we think that the disclosure document program still meets a need which is not adequately met elsewhere. Answering the specific questions set forth, we are not aware of any specific factual evidence to support our comments. We think the disclosure document program does create a worthwhile sense of security at least for some independent inventors. We are not aware of any situation in which a disclosure document has been relied upon to establish a conception date in connection with an interference proceeding. We believe that the disclosure document program does address a need for the small independent inventor who may be intimidated by the prospect of filing a provisional patent application or may be unwilling to pay the $75 filing fee. While lowering the filing fee of a provisional application may help in some circumstances, it will not overcome the intimidation factor which we believe may be present by individual inventors functioning on a pro se basis. We are not aware of any specific instance in which an invention development company misled an inventor into believing a disclosure document provided a more meaningful benefit.

21. Creating a PTO Review Service for Applicant-Created Forms - We strongly support the establishment of a service to review, for a fee, forms prepared by the public that are intended to be used for future correspondence with the PTO. Thus, it is the practice of our firm to design our own forms for most of the commonly used PTO forms, in order to simplify the forms (e.g., to omit inapplicable or seldom used items) and to adapt the forms to our word processing system. While we have generally not had any problems with these forms, it would be helpful to have the PTO views as to possible corrections or improvements of the forms.

However, we would hope that this service would be a two-way street and that the fee would not be so high. Thus, we believe that the PTO can learn something from forms submitted by us and others. The PTO could also learn more about our specific needs and see examples as to how PTO forms could be designed better in the future. In addition, we do not believe that obtaining Patent Office review of all forms submitted should be an absolute requirement. We have found in the past that the Office forms are sometimes incomplete in that they do not cover all of the potential situations which could be involved with a particular submission or sometimes cover situations not applicable to our firm. As a result, in the past, we have used the Office forms as a starting point for establishing our own set of forms by either adding information to the Office form or deleting information from the Office form. For example, most Office forms provide a series of blanks to permit the payment of a fee by way of a deposit account or by check. It is our office policy to always use our deposit account for the payment of fees. Accordingly, in preparing our office forms, we modified the original forms by deleting the provision relating to the payment of fees by check. We do not believe that we should be required to pay a fee to obtain the approval of such relatively minor changes to the Office forms in creating our own forms. Thus, we are in favor of the proposal as long as it is permissive, rather than mandatory. We are mindful of the fact that the Office is rapidly automating and that certain markings will be required in certain positions on the forms to comply with scanner and other Office requirements.

We would be pleased to discuss with you or further amplify any of our foregoing comments.

Respectfully submitted,


Leslie L. Kasten, Jr.

Reg. No. 28,959

Chairman, Patent Department

The following senior attorneys participated in the preparation of the foregoing comments:

Ronald L. Panitch, Reg. No. 22,825; William W. Schwarze, Reg. No. 25,918; Alan S. Nadel, Reg. No. 27,363; Joel S. Goldhammer, Reg. No. 22,130; John Jamieson, Jr., Reg. No. 29,546; Martin G. Belisario, Reg. No. 32,886; and Kathryn Doyle Leary, Reg. No. 36,317.

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