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The more things change

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Laws come and go, but the law of unintended consequences remains.

As a raft of proposed changes to the patent statute and Patent Office rules lay before the public, their unintended consequences likely include significant constraints that ultimately render patents of limited value in promoting innovation and investment.

While the proposed changes are offered as efforts to streamline the patenting process and reduce abuses, they likely will result in a greater number of patent filings and reduced efficiency. These changes are particularly damaging for biotechnology and pharmaceutical inventions.

The new rules suggested by the Patent Office include an accelerated examination procedure, examined claim limits, greater information disclosure requirements and circumscribed continuation practice.

The Patent Office's accelerated examination process seems the most benign of the proposed rule changes. An accelerated examination process is available for the applicant who files the necessary petition ("a petition to make special") and accompanying fee at the time of filing a complete application electronically. To qualify, the applicant will be allowed only a limited number of claims directed to a single invention. The applicant also must state on the record that a pre-examination search was performed, provide those results and agree to an interview with the examiner to discuss the prior art and any potential rejections. While the applicant assumes greater burden for searching the prior art and accepts claim restrictions, this program seems fair because there is some quid pro quo in the arrangement. The applicant voluntarily gives up certain rights in exchange for a shortened time of prosecution. However, it is unclear if shifting the prior art searching to the applicant and limiting claims will actually reduce the time spent by the Patent Office on a particular application.

Perhaps the most controversial rule involves a definitive limit on continuation applications as a mechanism to streamline the patenting process and reduce application pendency time. Currently, there is no limit on the number of continuation applications an applicant can file. Those serve to capture subject matter not claimed in the parent application. In the proposed new rules, the Patent Office limits an applicant to a single continuation application. Quite simply, the Patent Office assumes reducing the number of continuations filed reduces the work of examiners, which in turn will reduce pendency and eventually ease the backlog of cases currently being prosecuted. Unfortunately, this simplistic view is fundamentally flawed. The Patent Office's own statistics show that few parties file more than two or three continuation applications, representing a fraction of the total filings annually. Accordingly, these draconian rules will do little to ease the Patent Office's backlog of cases while potentially seriously devaluing biotechnology patents.

In essence, the rules limiting continuations force biotechnology applicants to disclose far more information in their applications than they can ever hope to adequately claim and prosecute. Applications in these areas are held to a much higher standard regarding written description and enablement because these areas are considered unpredictable.

Obtaining even a minimal level of patent protection will result in the dedication of large amounts of intellectual property to the public because it will go unclaimed under the new limits. Moreover, applications frequently are filed early in the discovery process for new drugs and therapeutics. Typically, years of research and clinical trials are required to identify specific drugs and suitable formulations that are marketable. Continuation applications allow drug companies to capture such formulations.

Under the proposed rules, the multimillion-dollar investment spent in research and clinical trials bringing a new drug to market would be lost because the formulations are rarely identified that early in the patent process. The reward for investment and innovation as first envisioned by Thomas Jefferson is the patent granting a limited monopoly. If these rules are adopted, such a reward is denied for the biotechnology applicant.

The final piece of the Patent Office's salvo of new rules relates to Information Disclosure practice. An applicant has an affirmative duty to disclose all materially relevant prior art of which they are aware. The Patent Office's proposal provides that when an applicant submits too many references, or if those references are too long, that the applicant must provide a detailed description of the reference disclosure. When the number of references exceeds 20, the Patent Office requires an "explanation" of each document. The explanation includes an identification of the specific features that caused a document to be cited, an identification of the portions of the document where the specific features may be found, and a correlation of the specific features corresponding specific claim language, or to specific portions of the supporting specification, if the document is cited for that purpose. In short, a litigator's dream come true. Perhaps it is time to ask the applicant to shoulder more of the responsibility of producing prior art for the Patent Office's review, but why do it in such a way that fundamentally weakens a patent for litigation?

Not to be outdone by the Patent Office, both houses of Congress are contemplating changes to the patent statute. The Senate bill, S. 3818, seeks to make a number of changes, including moving our system from a "first-to-invent" to a "first-inventor-to-file" standard and establishing a post-grant review process. The House bill, H.R. 2795, seeks to make these changes, but also includes more ambitious potential changes, as illustrated in its elimination of the best mode requirement. It is far too early to tell what impact these changes will have on biotechnology-related patent practice, but they certainly warrant careful attention.

As the Patent Office falls further and further behind in examining the growing number of patent applications submitted every year, it is clear that some reforms are necessary. Unfortunately, the Patent Office seems unwilling to address the real problem with examining patent application -- retention of competent patent examiners. The proposed rules treat only the symptoms of the pendency malaise and will likely fail to make a true impact on pendency problems. The only real question remaining is how much will these stopgap measures hurt the biotechnology and pharmaceutical industries.


Mullen is of counsel and Hill is an associate in the San Diego office of Morrison & Foerster LLP.

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