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June 18, 2006

Continuation Amok

Hal Wegner reports: "The PTO appears to be moving doggedly ahead with its proposed continuation rules to limit the number of continuation applications by rulemaking without statutory reform. This promises to subject the agency to unprecedented criticism from the practicing bar and key industry segments, particularly biotechnology."

The patent agency dangles various production incentives to examiners and lower level management, particularly cash bonuses, for disposing of an application through a refiling – whether continuation, divisional or otherwise. Wegner recommends an internal investigation to determine the degree to which disposal abuse is occurring.

On a business method application, I recently had a restriction requirement pulled on me after RCE, the claims already having traversed two nonsensical office actions. The examiner is so obviously green that she clearly didn't come up with the idea on her own. As Wegner puts it:

Without reform of this major problem any rulemaking will merely shift the focus on refilings to sham restriction requirements to require further divisional applications plus new forms of gamesmanship as yet unforeseen as Examiners are hard pressed to meet their disposal requirements, particularly in biotechnology and other high technology areas.

35 U.S.C. §120 covers continuations.

A 2004 Boston University Law Review article on continuation abuse, by Mark Lemley and Kimberly Moore (a CAFC judge designate), observes:

Limiting the number of continuations that can be filed may require an act of Congress. In re Henriksen [399 F.2d 253 (C.C.P.A. 1968)] the PTO sought to preclude applicants from filing more than three continuation applications in any one prosecution. The Court of Customs and Patent Appeals, the Federal Circuit’s predecessor court, struck down the PTO regulation, concluding that § 120 by its terms did not impose any limit on the number of continuations and that whether there should be such limits “is for Congress to decide.”

The Honorable Chief Judge Paul Michel of the United States Court of Appeals for the Federal Circuit gave a speech in Paris in May 2006 on "Optimizing Balances between Patentees and Rivals," suggesting,

Similarly, continuation application practice needs to be curtailed. Perhaps patent offices should only allow two “child” applications per “parent.”

Michel gave no rationale or justification, but, demonstrating his facile understanding of invention, Judge Michel would also like to limit claims per invention to 20, noting "presently many U.S. applications contain hundreds of claims." For complex technologies, limiting claims would likely backfire, spawning a plethora of divisionals, generating multiple examinations for closely related inventions that would be better done with a single, albeit more involved, examination. The result of my recent restriction requirement was to generate two divisionals, for a fairly simple invention. Bonus money for the examiner generating the split, at the expense of generating additional examinations.

Judge Michel also loses sleep over overly broad claims being "routinely" granted, partly because "drafters often use vague terms lacking definite meaning in the particular art." Michel apparently lacks awareness of a patentee being able to act as his own lexicographer, or of 35 U.S.C. §112, which covers claim definiteness. Perhaps Judge Michel ought to brush up on his claim construction knowledge by reading The Patent Prospector.

Gaming the examination system for stopwatch-measurable productivity has created unforeseen externalities that offset the intended effect. The best patent reform for quality would be to let examiners examine without gaming the examination process with incentives for quickness. Easily measured quantitative productivity can be a terrible trade-off for qualitative productivity, particularly in a craft where lack of quality can cost tens or hundreds of millions of dollars down the road.

Posted by Patent Hawk at June 18, 2006 10:06 PM | Prosecution


As I complete my second year as a PTO examiner, I am unaware of any incentives tied to disposing of an action through a refiling. However, there are definitely incentives based upon pure production, which may be the true gist of your statement.

On a related note, the production-based incentive scheme at the PTO is less than tempting. Essentially, for every extra 10% produced over quota each year, you can earn a 3% bonus at the end of the fiscal year. Not only do most examiners feel that a 10% time contribution for a potential 3% financial reward is unequal, in light of the extra hours required to achieve the metric, but they are also concerned with the fact that the production metric is solely measured in 10% increments. Theoretically, an examiner could fall short at the end of the year at 109% production and get nothing for the extra time committed to the position. Therefore, most examiners quickly learn to just do the minimal expected work to achieve the guaranteed salary, as the bonus structure is too uncertain and too unrewarding. Just an FYI.

Posted by: Examiner X at June 19, 2006 6:22 AM

The Patent and Trademark Office, with this proposed rule, seems to have adopted an activist posture in its attempts to clean its own house. It's fairly clear that PTO leadership attempted to get clear statutory authority for such limits through its behind-the-scenes efforts with the Patent Act of 2005. The proposed rule seems to be a calculated response to the stalling of that bill in Congress (which, in essence, assured another two years without such statutory authority) and, I believe, is reflective of a conscious decision to test the bounds of the agency's regulatory authority.
Hal's warning of "unprecedented criticism" seems entirely accurate, and perhaps even a bit of an understatement.

Posted by: J. Matthew Buchanan at June 19, 2006 7:21 AM