Monday, December 3, 2007

Recent Developments in Japan and Europe Regarding Continuation Practice and Late Claiming

Although the PTO asserts that its controversial new continuation rules are motivated primarily by a need for improved Office efficiency, it has also acknowledged on multiple occasions that one of the “goals” of the new rules is to substantially restrict the ability of applicants to file continuations for the purpose of “late claiming.” By “late claiming,” I refer to the practice of filing new claims directed to previously unclaimed subject matter, particularly in an application claiming the priority benefit of an earlier filed application. Late claiming is particularly prevalent in the biotechnology and pharmaceutical industries, and has been facilitated in the past by the U.S.’s relatively liberal continuation rules. But critics argue that the practice has been subject to abuse. For example, it is alleged that some patent applicants wait for third parties to introduce new products on the market, and then file late claims specifically targeting those products. Late claiming that occurs years after the initial filing is also thought to provide inadequate notice to third parties, who might assume that previously disclosed but unclaimed subject matter has been dedicated to the public. The PTO appears to have sided with these critics, and characterizes the use of continuation practice to facilitate late claiming as improper and abusive of the system.

On the other hand, the patent bar and many users of the patent system argue that late claiming is legitimate and can promote innovation. As an example, they point to the substantial time lag between the initial discovery of a family of drug candidates and the eventual development of a demonstrably safe and effective therapeutic product, along with the huge cost and uncertainty inherent to the endeavor. Absent the ability to plant an early “stake in the sand,” and then file new claims over the ensuing years as the ultimate commercial product evolves, they argue that it would be difficult to justify the huge capital investment required to support drug development. Far from being a reason to limit continuation practice, opponents of the PTO’s new rules point to late claiming as a compelling justification for maintaining the traditional continuation practice.

It is interesting to note that Japan and Europe have both recently addressed essentially the same issue, and in both cases decided on the side of liberal continuation rules and late claiming. In Japan, a 2005 report sponsored by the Intellectual Property Policy Committee of the Industrial Structure Council tackled the question of whether Japan might benefit from loosening its rules on divisional filings in order to allow applicants a greater opportunity to late claim (See The report acknowledged the potential for inadequate notice to third parties, but decided that this concern was outweighed by the incentive to innovation that would occur if Japan were to follow the lead of the U.S. and Europe and liberalize divisional practice to permit an expanded opportunity for late claiming. Shortly after the report came out, Japan amended its law to permit the filing of divisional applications within 30 days from notice of allowance or decision of refusal. Prior to the change, applicants were only allowed to file divisional applications at certain times prior to notice of allowance, or within 30 days after filing a notice of appeal against a final rejection. The new law went into effect April 1, 2007, and applies to applications having an effective filing date on or after that date (See and

The European Patent Office (EPO) has traditionally allowed applicants to file a chain of divisional patent applications for the purpose of late claiming, but the legality of this practice was recently called into question by certain decisions of EPO Technical Boards of Appeal. The issue was ultimately brought to the EPO’s Enlarged Board of Appeals (EBA), essentially the European equivalent of the en banc Federal Circuit. On June 28, 2007, the EBA issued a decision (G 0001/05) holding that under the European Patent Convention applicants are permitted to late claim, and to file of a series of divisional applications to maintain the pendency of a priority application for the purpose of late claiming, thus effectively maintaining the status quo in Europe.

In reaching its decision, the EBA considered amicus briefs filed in support of both sides that essentially echoed the current debate in the U.S., i.e., notice to third parties vs. incentives to innovation. The European patent bar, not surprisingly, weighed in on the side of late claiming and more liberal divisional rules. Interestingly, the President of the EPO also submitted comments in support of the traditional practice, in contrast with the situation in the U.S., where the PTO and patent bar have taken opposing sides in the debate. The EBA’s decision acknowledges substantial public policy concerns with allowing an applicant to maintain the pendency of a sequence of divisional applications for up to 20 years and to file new claims at anytime during that period, but concluded that if any reform is deemed necessary it must come from the legislature.

Perhaps the U.S. could learn from the experiences of Japan and Europe. While late claiming does raise public policy concerns, particularly with respect to notice to third parties, it also plays a critical role in incentivizing innovation in important industries such as biotechnology and pharma. These competing effects need to be balanced. The rule changes would have a substantial impact on the rights of patent applicants, and the PTO should acknowledge this rather than seeking to make substantive policy under the guise of procedural rulemaking. Perhaps it would be beneficial to impose some sort of restriction on late claiming, but if so we should be up front about it and consider reforms that address the issue directly, rather than through arbitrary restrictions on continuation filings. Moreover, substantive changes to patent law of this nature should emanate from Congress rather than the PTO, at least until Congress decides to confer substantive rulemaking authority on the Office.


Anonymous said...

I also think continuations should not be treated like original applications, but my perspective is completely different from that of the USPTO.

Specifically, when multiple continuations are filed (especially continuations of an allowed application), that should be a very good *indicator* to the USPTO (and to all of us) that the original application was not meant to be a "wall hanger" or portfolio decoration (as are most patents that are never asserted), but that it will more likely than not have some significant impact on industry.

Given the likely importance of such continuations in industry (whether they be filed for pioneering inventions or, as is sometimes the case, for "trolling"), these applications should be distinguished from normal "run of the mill" applications and treated specially by the USPTO with an eye to decreasing their invalidity rate. I would suggest a three prong approach for "special" examination of such continuations (which would, as a side effect, make applicants have to think twice before filing them):

1) Proportionally increased examination time - For each continuation after a first continuation (or each continuation of an allowed application), increase the examination time proportionally: double the examination time for the first such continuation, triple for the second, etc., all with a view to finding new invalidating prior art against any members of the patent family (not just the pending application), realizing that such prior art is often uncovered after issuance when patents are asserted/litigated. [As an option, allow applicants to choose (and pay for) increased examination time even for original applications that the applicant deems important.]

2) Delayed presumption of validity - The presumption of validity of a patent should not attach until the claim scope is "fixed" against further claiming in continuations (allowing of course for further claiming in reissues, reexaminations, and interference proceedings). Once no continuation applications are pending which could claim (based on the priority date) the subject matter of the patent, or at such a time as the applicant disclaims the right to further claim by continuation the subject areas of the patent grant (e.g. as defined in the patent claim preambles), then the presumption of validity would attach. Moreover, such a presumption of validity should not cover any new references (e.g. invalidating prior art) cited in subsequent continuations. This will encourage applicants to bring prosecution of continuation streams to a speedy close, while in no way penalizing applicants for obtaining "valid" patents and "valid" continuation patents. [As an option, at any time before prosecution of all continuations is closed, the USPTO should be able to make a statement in or effect the continued examination of any prior patents in the continuation stream... effectively saying to the applicant, "If you continue to prosecute variants of the original patent claims, we may continue to examine the original patent claims, and your property rights aren't yet "fixed" or presumed valid; rather, they are only tentative (and subject to invalidation by a preponderance of the evidence) until you indicate to the world that the coverage of your claim scope is "fixed".]

3) Proportionally increased filing costs (filing, search, examination fees) - For each continuation after a first continuation (or each continuation of an allowed application), increase the filing cost proportionally: double for the first such continuation, triple for the second, etc., so that the USPTO is not burdened (monetarily) by such increased examination of continuations, and so that the filing costs accurately reflect the added work required of the USPTO to make sure the important applications are properly examined. [Society will benefit too since the USPTO will become a source of invalidating prior art for wrongly issued patents.]

Of course, all this would require statutory changes by Congress. But it would help get rid of any so-called "trolling" and "late claiming" problems, as well as any "backlog" problem which may be caused by unfettered continuation practice. Of course, if you think the USPTO really has a 3.5% allowance error rate, you won't see the need for better examination of continuations.

Anonymous said...

In view of readily available information regarding the existence of one or more still-pending applications in a particular family of patent applications (i.e. through PAIR), the USPTO's "lack of notice" stance on continuations is less defensible. In particular, using PAIR to determine that a particular family is still active in combination with careful reading of the published applications/patents in the family provides adequate notice in most cases of what presently unclaimed subject matter could later be claimed.

Anonymous said...

The important thing about EPO Divisional applications is of course that they cannot add anything new not already fully disclosed in the original application. (Art. 76(1) EPC).

So they can't really be compared with U.S. "here's an application, we'll fill in some more details later" filings.

Anonymous said...

" Anonymous said...

The important thing about EPO Divisional applications is of course that they cannot add anything new not already fully disclosed in the original application. (Art. 76(1) EPC).

So they can't really be compared with U.S. "here's an application, we'll fill in some more details later" filings."

The moment you rely on material added in a CIP (that is, "new matter") for claim support, you *lose* your parent filing date and can only rely on the date you "filled" in the details for establishing patentability of your claim. CIPs in the U.S. *do not* allow you to do what anonymous suggests and receive *any* filing date benefit from the parent to establish patentability of a claim.

[The use of CIPs can be helpful in swearing behind a reference regarding what was disclosed in the parent, and such use can be helpful defensively as establishing prior art against other applications. That is, the parent application becomes prior art against all other applications as of its filing date if it can be regarded as an "application for patent" under 102(e). To determine if the parent application will be legally considered an "application for patent", the parent application must be able to support (under 112) at least one claim in one patent (i.e. either in the parent if the parent issued or in a child if the parent went abandoned).]

Tun-Jen said...

12:02: The "notice" part refers to the notice function of the claims. If it really is so easy to figure out what the potentially claimable (but unclaimed) subject matter is, then why bother have patent claims? Just permit omnibus claims saying "I own all the disclosed subject matter in this application; potential infringer, burden is on you to figure out what that is for yourself".

4:38 I think the difference is not the availability of CIPs but the difference in the demanding-ness of the written description requirement. It is no secret that in the U.S. you can get away with murder claiming stuff that was not really "invented" at the time of filing but instead copied from later commercial developments.

Chris's post makes pretty clear that for Pharma, the initial filing is a "here is the application, we'll figure out whether this thing actually works later" stake in the ground. Nobody really denies this. Pharma's defense of continuations is that it is somehow a *good* thing that they can incorporate all sorts of after-acquired knowledge into the claims without having to explicitly amend the written description.

Anonymous said...

"Tun-Jen said...

I think the difference is not the availability of CIPs but the difference in the demanding-ness of the written description requirement. It is no secret that in the U.S. you can get away with murder claiming stuff that was not really "invented" at the time of filing but instead copied from later commercial developments."

Tun-jen, plese enlighten me as to the specific differences in the demanding-ness between the EPC articles and the U.S. law as to the "written description requirement". Really, please give me article sections, and suggestions for changing U.S. law (35 U.S.C. 112) if you really think a problem exists. (P.S. Don't just give me suggestions - please give EPC article sections too, since it's no secret. Last I checked, the U.S. demanding-ness of the written description requirement was greater than in Europe since it includes a best mode requirement....)

But if you think you can get away with "murder" in the U.S., then also please tell me how long you have practiced patent law (I assume you haven't ever)? [To practice patent law, the USPTO and 35 USC say you must be a registered patent attorney.] Also please give me at least one example where you can (legally) claim stuff that you really didn't invent at the time of filing but came up with from later development, and I'll try to show you how you are wrong, o.k.? Really, please do give an example. [Generally, the people at the USPTO who spend their time thinking about policy instead of actually working through the current problems that mar the system have zero patent law experience - the real practical problems are just completely beyond their grasp (that's why they want to think about ethereal future policy while the currently manifested problems that are in my mind crippling the system, such as issuance quality, outdated production goals, examiner turnover, loss of corp expertise, etc. go completely fully unaddressed).]

You may not be aware of the FDA approval process which is costly and usually takes many years after an invention/discovery is made. During those many years, you don't think that companies should continue "evolving" their inventions for the market, correct? Such evolution does not mean they continue evolving their original patent application or the invention(s) described therein. Under 35 USC 112, the original patent application must teach *any* person skilled in the art how to make and use the invention, and it must include a written description that evidences "possession" of the invention as of the filing date. Period. Anything else you suggest is a false "secret" like would be found in a supermarket tabloid.

Who is your intended audience? You can fool some of the people all of the time.

Anonymous said...

How about linking the JPO report and EBA decisions in your post so that readers can review the original sources? If they are not on the Internet already, you ca use Google pages to post them.

Chris Holman said...

Good suggestion, I have just added links to the Japanese report and a Japanese law firm website that discusses the changes to law taking effect April 1, 2007. I could not find the changes on JPO website (I did not look that hard), but they were reported in BNA's PT&C J., but you need a subscription to access. The EBA decision was cited in the original post, and can be accessed on EPO website, just google the cite provided and it should be the first hit.

Brian said...

I just read Anon's scathing post, the tone of which is completely out of line. The problem, I believe, is that the US permits a claim to cover things that the applicant never even thought of at the time of filing the application. Whereas in Europe the Commission has a much more stringent requirement of linking the claims to the written description and what was in-fact invented by the applicant. If the US went to a more European based system, we would all be much better off. I'm not saying that applicants should not be able to "back claim", but they should not be permitted to claim stuff that they never even thought of at the time of the invention.

Anonymous said...

"...but they should not be permitted to claim stuff that they never even thought of at the time of the invention."

Brian, they are not able to do such, nor does anyone think they should be able to do such. Are you jousting at windmills again? (Yes, you haven't practiced either. See ya.)

Tun-Jen said...

To the brave anonymous poster:

I refer you to In re Wilder, 736 F.2d 1516, 1519 (Fed. Cir. 1984) (justifying late claim because “failure to appreciate the full scope of the invention is one of the most common sources of defects in patents”).

Brian has already enlightened you on the difference between US and EPO practice on demanding real evidence of invention at the time of filing.

I find it fascinating that you think "practicing patent law" requires patent prosecution in particular. I also find it fascinating that you think people who don't practice aren't even worth talking to--as if they are some sub-human species unworthy of your attention.

I am actually very well aware of the FDA approval process. Please enlighten me on how that process justifies filing an application today without knowing whether anything in there actually works until five years later. I refer you to Brenner v. Manson, 383 U.S. 519, 534-35 (1966).

On a side note, Prof. Holman, I suggest moderating comments in your new blog.

Chris Holman said...

Tun-Jen, with regard to monitoring comments, I’m hesitant to do that as long as there is at least arguably some substantive dialog occurring. I’m new to blogging, and so far have approved every comment; I don’t want to censor anybody, but at some point might have to if I feel someone has gone over the line. I agree that anon should tone it down. Legitimate substantive comments are welcome from anyone who has something to say, there is no requirement of admission to the patent bar or practice experience. Regardless of the extent to which Tun-Jen and Brian are right or wrong, there are a lot people who would agree with them, and some are making there voices heard on Capitol Hill and elsewhere. If you think someone is off base, use the opportunity to educate rather than berate.

I personally think that the ability to late claim is important, particularly for biotech and pharma, although there are good arguments for imposing some form of limitation. Clearly I don’t think the new continuation rules are the right approach. But I also think Tun-Jen and Brian are correct to some extent, a patentee can add claims that cover embodiments not contemplated as of the initial filing date – Lemelson comes to mind. For a good example from biotechnology, consider Amgen’s use of continuation practice and late claiming to obtain claims that covered TKT’s production of EPO be gene activation technology. There initial EPO patent (4,703,008, successfully asserted in Amgen v. Chugai) claims the isolated polynucleotide and expression of the protein in a transformed cell from an exogenous gene. Pretty clearly the patent would not have covered TKT’s production of EPO in human cells from an endogenous gene via gene activation technology. But after gene activation technology became known, Amgen filed applications in 1995 which resulted in 5,618,698 and 5,756,349, which essentially claim vertebrate cells that express a human EPO gene under the regulation of a non-human promoter, or that contain amplified DNA encoding human EPO, as well as processes for using these cells to produce EPO. In Amgen v. HMR, the court found these claims to have been infringed by TKT’s gene activation technology – so far, these are the only patents that have been successfully asserted by Amgen in that case. But these patents claim priority to the applications which resulted in the ‘008 patent, filed in 1983 and 1984, long before the development of gene activation. Thus, Amgen was very successful in filing delayed claims that covered a process not contemplated as of the priority date. Maybe that is a good outcome, particularly based on the groundbreaking nature of there initial breakthrough in producing recombinant EPO. Clearly, a patentee is not limited to embodiments contemplated at the time of filing, nor should they be.

Anonymous said...

Surprising to find a patent law blog with such attitude, cool!

C'mon anon, you're being a bit disingenuous and semantic.

The point is that applicants can and do file applications with a huge laundry list of options, alternatives and equivalents with no idea of whether the vast majority of combinations work and no intention of ever proving that these combinations work. They follow up on their commercial embodiment, but then leave the remaining subject matter on the shelf until a competitor comes up with an idea and puts the investment into putting it into practice. Applicant then gets hit with a belated recognition that buried in this patent application is a mix and match of components/steps that covers the competitor product. In this current patenting environment, a company is foolish NOT to follow that program.

[I'm sure you've written these things if you are an active patent prosecutor].

One example are the gene patents that have 500,000 genes in them and a truckload of sequence listings. There are examples in every field I'm sure.

Lana said...

Hi Chris:

Glad to see something local here. Good job!

Inventive Step said...

There was a short article by Richard Abnett, Julie Milburn and Robert Sacklin of Reddie & Grose in the November issue of Informa's Patent World magazine about the EBA's decision, which touched on the differences between the EPO and the US in this area.

As the authors note, "Even with the new US rules, there is still considerable flexibility in the US Patent and Trademark Office in the form of claims that an applicant can prosecute in a continuation (or divisional) application. That flexibility has never existed in the EPO."

The key is the interpretation of Art 76(1) EPC, which provides that "A divisional application... may be filed only in respect of subject matter which does not extend beyond the content of the earlier application as filed".

This is interpreted much more narrowly in Europe than in the United States. In Europe, according to the authors, "Where the new independent claims are not based on claims originally filed, but instead incorporate subject matter that was not covered in the original claims, the EPO will effectively apply a test which asks: 'What was the invention (claimed inventive idea) disclosed to the person skilled in the art?' That is, would someone who had read the original application have appreciated that the application sought to protect the particular combination of features now in the independent claims? If the new claim is telling the reader that the invention is something different to the original application, under EPO practice the changed claim scope may void the claim."

Scope for amendments is additionly limited, compared to US practice, by rule 86(1) of the implementing regulations, which forbids the filing of an amendment on a European patent application before the search report has been received; and rule 86(4) which states that "Amended claims may not relate to unsearched subject matter which does not combine with the originally claimed invention or group of inventions to form a single general inventive concept" -- i.e. a claim amendment (as opposed to a divisional application) can be made only to strictly narrow the claim scope, not to shift the scope to a different grouping of features.

So claims filed must be directed to the invention for which the applicant wishes to obtain protection.

Taken together, the European rules have the advantage of significantly reducing the administrative load on the Office; and it means that the impact on the innovation landscape for others is much clearer, as soon as the initial application is published.

Are these not both advantages that it would be in the United States' best interests to adopt also?

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