Sutherland Asbill & Brennan LLP 

Recent Patent Reforms: Publication Of Patent Applications

Access to the Patenting Process at a Higher Cost of Infringement

by Lisa M. Cobern    Bio    email 
and William L. Warren   
Bio    email
Sutherland Asbill & Brennan LLP

On November 29, 2000, several long awaited patent reforms went into effect.  One of the most hotly debated reforms is the publication of pending U.S. patent applications.  The new patent publication rules require applicants to earlier consider their foreign filing objectives and the thorough preparation of all potential claims to the invention.  In exchange for publication, third party continuing access to the application’s file history and the ability to submit references for consideration by the examiner, the new law grants additional rights to the applicant including the ability to recover a reasonable royalty for the pre-issuance period of infringement and to have its own published application considered a priority reference for use against other patentees.

Prior to the reforms, patent applications filed in the United States were confidential documents that only became publicly available upon issuance as a patent.  The secret status of U.S. patent applications was controversial because, while it benefited the patentee, it also placed the patentee’s competitors at a disadvantage.  The ability to keep a pending patent application confidential allowed the patentee time to develop the patented technology and its market without alerting its competitors to the true nature of the technology.  This “head start” was of particular importance to smaller, cost-conscious patentees who believed that, without it, larger, deep pocket competitors could easily subvert the technology before the patentee could establish itself and its product.

At the same time however, the secrecy of the application prevented competitors of the patentee from adequately assessing the infringement risks associated with developing a particular technology.  Although many larger U.S. patentees file parallel foreign patent applications that are published prior to issuance and that can be evaluated for the purposes of risk assessment, many smaller, domestic patentees only file applications in the United States.  A competitor of this smaller non-foreign filing patentee had no way of knowing whether secret prior art existed, or in other words, whether that patentee was already on its way to obtaining exclusive rights to the technology, which rights could be later used to stop the competitor from continuing its own development.  This inability to adequately assess technology development risks created business uncertainty and arguably hindered investment in new technologies.

The American Inventors Protection Act of 1999 was crafted in part to remedy such uncertainty and to bring the United States’ patent system closer to the patent systems operating in most other foreign countries.  The Act, now codified as Public Law No. 106-113, 113 Stat. 1501, mandates that non-provisional utility patent applications filed on or after November 29, 2000 will be published 18 months from the earliest filing date from which the application can claim a benefit.  An applicant can avoid publication by certifying in a formal non-publication request that it is not planning to file a parallel application in a foreign country that has an 18-month publication requirement.  The new law states that a non-publication request is made upon filing an application and there is no provision regarding late filing of such a request.  If the applicant has failed to submit the non-publication request at filing, the applicant’s only remedy to avoid publication seems to be abandonment of the application.  (The applicant will not be able to re-file the application and keep the benefit of the earliest filing date since the 18-month publication date runs from the earliest filing date.)  A request for abandonment must be made four weeks prior to the projected date of publication due to the logistics of the publication process.  Nevertheless, an applicant will be wise to request abandonment fourteen weeks prior to the projected publication date as the relevant Final Rule specifically states that “the [Patent] Office simply cannot ensure that it can remove an application from publication or avoid publication of application information any time after the [fourteen week] publication process for the application is initiated.”  (65 Fed. Reg. 57,029 (2000)).

If a non-publication request is made and the applicant subsequently decides to file a parallel foreign application subject to an 18-month publication requirement, the applicant must notify the Patent Office within forty-five days after the date of foreign filing or risk abandonment of the application.  (37 C.F.R. § 1.213(c)).  Additionally, any applicant who attempts to delay publication of the application by intentionally delaying the submission of the information and materials (such as formal drawings) necessary for publication risks a reduction of any patent term extension to which it is entitled.  An applicant therefore must consider seriously its options regarding foreign and U.S. filing at the time of filing in the U.S. in order to eliminate the risk of abandonment or loss of patent term.

The new publication requirement is a significant change for those applicants only filing in the United States in the sense that they must now actively request non-publication of a patent application.  However, in and of itself, the 18-month publication requirement does little to assuage the complaints of those who believe that the secret status of U.S. patent applications fosters business uncertainty and hinders investment in new technologies.  An applicant only filing an application in the United States may opt out of publication, continue to keep its application secret until issuance as a patent, and continue to keep its competitors in the dark and unable to adequately assess their risks.  The new reforms add to this uncertainty by providing that an applicant filing in both the U.S. and in a foreign country having an 18-month publication requirement may redact any portion of its U.S. application that is not also found in the foreign application.  In this respect, the new patent reforms maintain the status quo and allow applicants describing an invention only in a U.S. patent application to maintain the secrecy of that invention until patented, if affirmatively requested at the time of filing.

While the 18-month publication requirement may not result in publication of additional applications not already published elsewhere, two other provisions of the new legislation should have a profound effect on those applications that are published in the U.S.  Until enactment of the present patent reforms, the application examination process was truly an ex parte proceeding between the Patent Office and the applicant.  Although there was provision allowing a third party to protest against a pending application (37 C.F.R. § 1.291), a third party rarely knew of the existence of a pending patent application and consequently rarely protested.  The third party also could only obtain a copy of the file wrapper and analyze the scope of the claims after the patent issued.  The new legislation takes a step toward making the application process an inter partes proceeding as it allows any third party to follow the progress of a patent application throughout examination and to submit to the patent examiner publications relevant to the pending published application. (37 C.F.R. § 1.14(c)(2) and 37 C.F.R. § 1.99(a), respectively).

Specifically, Section 1.14 of Title 37 of the Code of Federal Regulations provides that any third party may obtain a copy of the file wrapper and contents of a published application upon payment of a fee.  The file wrapper of a published application contains all papers related to the application including the office actions issued by the application’s examiner and the responses submitted by the applicant.  The file wrapper contains all instances where the examiner or the applicant defined and/or limited the breadth of the patent claims, and consequently, it indicates the probable the scope of the patent.  Any competitor of the applicant may now obtain a copy of the file wrapper at any point after publication.  There is no limit as to number of times that the file wrapper may be obtained, so the progression of the application and the changes in its scope can be easily followed.  The new law also provides that a third party may submit to the examiner up to ten patents or publications that are relevant to the pending published application.  The third party may not include any explanation of the patents or publications, or any other information, however, the submission itself may be viewed as third party commentary interjected into what was previously an ex parte proceeding.  Together, these two “third party” provisions work to bring the U.S. patent application out from under its shroud of secrecy and allow third party competitors a more reliable basis for technology related risk assessments.

Although the third party provisions do not affect those applications in which a non-publication request is correctly filed, the new law attempts to limit the number of non-published applications and thereby decrease business uncertainty in technology related arenas.  The new law encourages publication in the U.S. by providing the patent applicant with several new rights in exchange for publication.  First, the published application is afforded its filing date (or earlier claimed priority date) as an effective reference date for use against other patentees under 35 U.S.C. § 102(e).  An applicant can also elect to have an application that was pending prior to November 29, 2000 published in order to give it a prior art effect against other patentees as of the application’s filing date.  The new law also provides that an interference proceeding must be requested by a third party at an earlier time if the application is published (within one year from its publication date, rather than the former rule of within one year from its issuance).  Finally, the new law provides provisional infringement rights to those applicants who agree to publication.  In particular, 35 U.S.C. § 154 is amended to provide that a patent may include the right to obtain from an infringer a reasonable royalty during the period beginning on the date of publication of the application and ending on the date the patent is issued.  The patentee’s recovery is limited to the time from which the infringer had actual notice of the published application and to infringement of those claims that are substantially identical to the claims in the published application.

The potential receipt of a reasonable royalty may serve as the intended carrot to those patent applicants shying away from publication, however, before deciding to publish, patent applicants and their counsel must understand the import of the prerequisites to recovery.  First, the applicant will need to be aware of its competition to identify any potential infringers and then bring the published patent application to the attention of those infringers.  Second, the applicant should limit the number of claim amendments made during prosecution (examination) of the application.  This second and more formidable prerequisite to recovery arises from the requirement that the infringed claims must be “substantially identical” to the claims in the published application.  Since the term “substantially identical” has not yet been defined and will most likely be defined by the courts over time, an applicant takes a risk each time a claim amendment is made that the amended claim will not be considered “substantially identical” to a claim in the published application.  Claim amendments can be limited only by adequately investigating the prior art and crafting a complete set of claims of differing scope prior to filing the application.  Therefore, for those applicants wishing to take advantage of their provisional rights, a complete and well-written patent application, including a full claim set of all embodiments of the invention, is more crucial than ever.

In conclusion, the new patent reforms that took effect on November 29, 2000 provide for automatic publication of U.S. non-provisional utility patent applications 18 months after the earliest date from which they claim priority.  Applicants can request non-publication if they are not planning to file a patent application describing the same invention in a foreign country that has an 18 month publication requirement.  Applicants may also request publication of a redacted copy of a U.S. patent application if the parallel, published foreign application is narrower in scope than the U.S. application.  The published application has as an effective reference date for use against other patentees as of its earlier priority filing date.  Applicants can also elect to have their applications that were pending prior to November 29, 2000 published in order to give them a prior art effect as of their filing date against other patentees.

While the new law does not require publication of all U.S. patent applications, the new law does encourage U.S. applicants to publish their applications by providing them with the above priority reference rights and rights to collect a reasonable royalty for the post-publication patent pending period.  The new law also provides third party competitors an opportunity to follow and affect the continuing examination of a pending published patent application.  Taken together, these new provisions do well to maintain the balance between the interests of the smaller non-foreign filing patent applicants who desire intellectual property protection and their competitors who desire the ability to make adequate risk assessments with regard to development of their own technology.

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