[Federal Register: March 10, 2008 (Volume 73, Number 47)]
[Proposed Rules]
[Page 12679-12684]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10mr08-15]
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DEPARTMENT OF COMMERCE
Patent and Trademark Office
37 CFR Part 1
[Docket No. PTO-P-2006-0004]
RIN 0651-AC00
Examination of Patent Applications That Include Claims Containing
Alternative Language
AGENCY: United States Patent and Trademark Office, Commerce.
ACTION: Proposed rule; request for comment on initial regulatory
flexibility analysis.
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[[Page 12680]]
SUMMARY: The United States Patent and Trademark Office (Office)
published a notice proposing to revise the rules of practice pertaining
to any claim using alternative language to claim two or more
independent and distinct inventions (Alternative Claims Notice of
Proposed Rule Making). The Office has prepared an initial regulatory
flexibility analysis (IRFA) on this proposed change to the rules of
practice. This notice publishes the IRFA and requests public comment on
the IRFA. This notice also invites public comment on the Alternative
Claims Notice of Proposed Rule Making.
DATES: Written comments on the IRFA or Alternative Claims Notice of
Proposed Rule Making must be received on or before April 9, 2008. No
public hearing will be held.
ADDRESSES: Comments should be sent by electronic mail message over the
Internet. Comments on the IRFA should be addressed to markush-
irfa.comments@uspto.gov, and comments on the proposed rule changes in
the Alternative Claims Notice of Proposed Rule Making should be
addressed to markush.comments@uspto.gov. Comments may also be submitted
by mail addressed to: Mail Stop Comments--Patents, Commissioner for
Patents, P.O. Box 1450, Alexandria, VA 22313-1450, or by facsimile to
(571) 273-7754, marked to the attention of Kathleen Kahler Fonda, Legal
Advisor, Office of Patent Legal Administration. Although comments may
be submitted by mail or facsimile, the Office prefers to receive
comments via the Internet.
Comments may also be sent by electronic mail message over the
Internet via the Federal eRulemaking Portal. See the Federal
eRulemaking Portal Web site (http://www.regulations.gov) for additional
instructions on providing comments via the Federal eRulemaking Portal.
The comments will be available for public inspection at the Office
of the Commissioner for Patents, located in Madison East, Tenth Floor,
600 Dulany Street, Alexandria, Virginia, and will be available on the
Office's Internet Web site at (http://www.uspto.gov). Because comments
will be made available for public inspection, information that the
submitter does not desire to make public, such as an address or phone
number, should not be included in the comments.
FOR FURTHER INFORMATION CONTACT: Kathleen Kahler Fonda, Legal Advisor,
Office of the Deputy Commissioner for Patent Examination Policy, by
telephone at (571) 272-7754; by mail addressed to: Box Comments
Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313-
1450; or by facsimile to (571) 273-7754, marked to the attention of
Kathleen Kahler Fonda.
SUPPLEMENTARY INFORMATION: The Office published the Alternative Claims
Notice of Proposed Rule Making in the Federal Register in August of
2007. See Examination of Patent Applications That Include Claims
Containing Alternative Language, 72 FR 44992 (Aug. 10, 2007),
republished at 1322 Off. Gaz. Pat. Office 22 (Sept. 4, 2007). This
notice supplements the Alternative Claims Notice of Proposed Rule
Making. The Alternative Claims Notice of Proposed Rule Making indicated
that the changes being proposed involve rules of agency practice and
procedure for which prior notice and an opportunity for public comment
are not required pursuant to 5 U.S.C. 553 (or any other law), and thus
neither a regulatory flexibility analysis nor a certification under the
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) is required under 5
U.S.C. 603. See Examination of Patent Applications That Include Claims
Containing Alternative Language, 72 FR at 44999.
The Office received several comments concerning the impact of the
proposed rules on small businesses and independent inventors. The
Office continues to believe that a regulatory flexibility analysis is
not required for the Alternative Claims Notice of Proposed Rule Making.
The Office, however, has decided to subject the proposed rules to a
regulatory flexibility analysis to provide a further opportunity for
comment on the small business impact of the proposed rules.
Specifically, the Office has commissioned a detailed analysis of the
impact of the proposed rules on small entities, and has prepared an
IRFA. This notice publishes and requests public comment on the IRFA.
The Alternative Claims Notice of Proposed Rule Making indicated
that comments on the proposed changes to the rules of practice were to
have been submitted by October 9, 2007. This notice also provides
another opportunity to submit comments on the changes to the rules of
practice proposed in the Alternative Claims Notice of Proposed Rule
Making.
1. Description of the reasons that action by the agency is being
considered: The Office is proposing to revise the rules of practice
pertaining to any claim using alternative language because patent
applicants sometimes use Markush or other alternative formats to claim
two or more independent and distinct inventions and/or to recite
hundreds, if not thousands, of alternative embodiments in one claim.
Such claims are confusing, difficult to understand, and frequently
border on being unmanageable. Proper search of such complex claims,
particularly those using Markush language, often consume a
disproportionate amount of Office resources as compared to other types
of claims. The prosecution of these complex claims likewise often
requires separate examination and patentability determinations for each
of the alternatives within the claim, e.g., if the alternatives raise
separate prior art, enablement, or utility issues. Furthermore, the
variety and frequency of alternatives recited in claims filed in
applications pending before the Office, driven in part by trends in
emerging technologies, have exacerbated problems with pendency. See
Examination of Patent Applications That Include Claims Containing
Alternative Language, 72 FR at 44992-97.
2. Succinct statement of the objectives of, and legal basis for,
the proposed rules: The objective of the proposed changes is to improve
practices pertaining to claims that recite alternatives in a manner
that will enhance the Office's ability to grant quality patents that
effectively promote innovation in a timely manner. See Examination of
Patent Applications That Include Claims Containing Alternative
Language, 72 FR at 44992. The authority for the proposed changes is 35
U.S.C. 2(b)(2)(A) and (C) (authorizes the establishment of regulations
to govern the conduct of proceedings in the Office and facilitate and
expedite the processing of patent applications), 112 (requires
applicants to submit one or more claims particularly pointing out and
distinctly claiming the subject matter which the applicant regards as
his invention), 121 (authorizes the Office to restrict an application
to a single invention when two or more independent and distinct
inventions are claimed), and 131 (authorizes the Office to cause an
examination to be made of an application). See In re Harnisch, 631 F.2d
716, 722 n.6, 206 USPQ 300, 306 n.6 (CCPA 1980) (inviting the Office to
exercise its rule making powers to forestall procedural problems
arising from Markush claims).
3. Description and estimate of the number of affected small
entities: The Small Business Administration (SBA) small business size
standards applicable to most analyses conducted to comply with the
Regulatory Flexibility Act are set forth in 13 CFR 121.201. These
[[Page 12681]]
regulations generally define small businesses as those with fewer than
a maximum number of employees or less than a specified level of annual
receipts for the entity's industrial sector or North American Industry
Classification System (NAICS) code. The Office, however, has formally
adopted an alternate size standard as the size standard for the purpose
of conducting an analysis or making a certification under the
Regulatory Flexibility Act for patent-related regulations. See Business
Size Standard for Purposes of United States Patent and Trademark Office
Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR
67109 (Nov. 20, 2006).\1\
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\1\ This alternate small business size standard is the
previously established size standard that identifies the criteria
entities must meet to be entitled to pay reduced patent fees. See 13
CFR 121.802. If patent applicants identify themselves on the patent
application as qualifying for reduced patent fees, the Office
captures this data in the Patent Application Location and Monitoring
(PALM) database system, which tracks information on each patent
application submitted to the Office.
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Unlike the SBA small business size standards set forth in 13 CFR
121.201, this size standard is not industry-specific. Specifically, the
Office's definition of small business concern for Regulatory
Flexibility Act purposes is a business or other concern that: (1) Meets
the SBA's definition of a ``business concern or concern'' set forth in
13 CFR 121.105; and (2) meets the size standards set forth in 13 CFR
121.802 for the purpose of paying reduced patent fees, namely an
entity: (a) Whose number of employees, including affiliates, does not
exceed 500 persons; and (b) which has not assigned, granted, conveyed,
or licensed (and is under no obligation to do so) any rights in the
invention to any person who made it and could not be classified as an
independent inventor, or to any concern which would not qualify as a
non-profit organization or a small business concern under this
definition. See Business Size Standard for Purposes of United States
Patent and Trademark Office Regulatory Flexibility Analysis for Patent-
Related Regulations, 71 FR at 67112.
The proposed rule will apply to any such small entity who files a
patent application and chooses to use alternative language in claiming
his or her invention. To estimate the number of applications containing
alternative language that are submitted by small entities, Office staff
analyzed applications filed in fiscal year 2005 (FY05) (the most recent
year for which complete eighteen-month publication data are available).
Using the preceding definition of small entity, the Office screened
these published applications for commonly used alternative language
(e.g., ``contains one selected from the group consisting of'') and
identified 20,824 small entity applications as containing alternative
language and, therefore, as potentially affected by the proposed rule.
The Office estimates that this represents approximately 31 percent of
total applications containing alternative language.
As anticipated, a larger proportion of applications containing
alternative language is concentrated in the biotechnology/chemical arts
(an estimated 9,186 of the 21,187 small entity applications in the
biotechnology/chemical arts or 43.4 percent). The remaining
applications with alternative language are distributed throughout the
electrical and mechanical arts (an estimated 11,638 of the 73,831 small
entity applications in the electrical/mechanical arts or 15.8 percent).
These results are summarized in Table 1.
Table 1.--Small Entity Applications (FY05)
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Number of
small entity
Number of applications
Type of art small entity containing Percent
applications alternative
language
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Biotechnology/Chemical Applications............................. 21,187 9,186 43.4
Electrical/Mechanical Applications.............................. 73,831 11,638 15.8
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Total Applications.......................................... 95,018 20,824 21.9
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4. Description of the projected reporting, recordkeeping and other
compliance requirements of the proposed rules, including an estimate of
the classes of small entities which will be subject to the requirement
and the type of professional skills necessary for preparation of the
report or record: The proposed rule could potentially impact applicants
in two ways. First, it would require that a claim must be limited to a
single invention. Consequently, if a submitted application contains a
single claim that defines multiple independent and distinct inventions,
then the examiner may apply a restriction requirement. See Examination
of Patent Applications That Include Claims Containing Alternative
Language, 72 FR at 44995. In this case of an intra-claim restriction,
applicants who wish to pursue patent protection for the full scope
covered by their initial application would have to file a divisional
application for each additional invention defined in that original
claim. For example, if a single claim contains three independent and
distinct inventions and the Office requires restriction, the applicant
could file two divisional applications to prosecute the full scope of
the original claims. Alternatively, the applicant could elect not to
file any divisional applications, in which case he or she would be
limited to the one invention elected in the initial application.
To estimate the costs of one divisional application, the Office is
using unit cost data from the American Intellectual Property Law
Association (AIPLA) Report of the Economic Survey \2\ and the Office
fee schedule for fiscal year 2007. Based on these data, the Office
estimates that the cost of filing one divisional application is $10,258
(expressed in present value terms using a 7 percent discount rate). The
cost faced by applicants could be greater than this amount if the
applicant files more than one divisional.
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\2\ AIPLA Report of the Economic Survey 2007. Table Q33g, Third
Quartile, ``Patent application amendment/argument, relatively
complex, biotechnology/chemical (Preparation and Filing).'' Page I-
74; Table Q33l, Third Quartile, ``Issuing an allowed application
(all post-allowance activity).'' Page I-81; Table Q33n, Third
Quartile, ``Pay a Maintenance Fee.'' Page I-76.
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Second, the proposed rule allows examiners to require applicants to
simplify the presentation of claims with alternative language so that:
[[Page 12682]]
(1) The number and presentation of alternatives in a single claim
are not difficult to construe.
(2) No alternative is itself defined as a set of further
alternatives within the claim.
(3) No alternative is encompassed by any other alternative within a
list of alternatives unless there is no other practical way to define
the invention.
(4) All alternatives are substitutable for each other.
See Examination of Patent Applications That Include Claims
Containing Alternative Language, 72 FR at 44996.
Consequently, if an examiner determines that a claim does not
comply with one or more of the format requirements listed above, the
applicant can be required to correct the claim. The applicant would
provide this correction to the claim by submitting an amendment to the
application.
To estimate the cost of amending an application in order to correct
the format of the claim(s), the Office is using unit cost data on
amendments from the AIPLA Report of the Economic Survey.\3\ Based on
the AIPLA data, the Office estimates that the cost of filing one
amendment to correct the format of the claim(s) is $4,029 (expressed in
present value terms using a 7 percent discount rate). The cost faced by
applicants could be less than or greater than this amount, depending on
how difficult it is to correct the format of the claim(s).
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\3\ AIPLA Report of the Economic Survey 2007. Table Q33g, Third
Quartile, ``Patent application amendment/argument, relatively
complex, biotechnology/chemical (Preparation and Filing).'' Page I-
74.
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Any particular application containing alternative language could be
impacted by either, both, or neither of these two effects, and would
fall into one of the following four categories:
(1) Applications with alternative language that do not claim
multiple inventions in a single claim and have claim(s) in a proper
format.
(2) Applications with alternative language that claim multiple
inventions in a single claim and have claim(s) in a proper format.
(3) Applications with alternative language that do not claim
multiple inventions in a single claim but have claim(s) in an improper
format.
(4) Applications with alternative language that claim multiple
inventions in a single claim and have claim(s) in an improper format.
Applications within the first of these categories have
``acceptable'' alternative language, and small entities submitting such
applications would not incur any incremental costs of note. The
remaining three categories, however, contain applications that
generally would lead to incremental costs. Applications in category 4,
which require both a divisional application and an amendment, incur the
greatest cost ($14,287). Table 2 summarizes the compliance activities
and corresponding cost estimates.
Table 2.--Incremental Cost Estimates
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Cost (present
Compliance activity value)
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Category 1 applications containing acceptable n.a.
alternative language...................................
Category 2 applications needing one divisional $10,258
application............................................
Category 3 applications needing one amendment to correct 4,029
the format of the claim(s).............................
Category 4 applications needing one divisional 14,287
application and one amendment to correct the format of
the claim(s)...........................................
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To estimate the number of small entity applications in each
category, the Office examined a sample of 102 FY05 small entity
applications with alternative language from the biotechnology/chemical
arts and 57 FY05 small entity applications with alternative language
from the electrical/mechanical arts. For these applications, the Office
identified and categorized the impact of the proposed rule. The Office
then scaled these findings to the overall number of small entity
applications.
Using this methodology, the Office estimates that 82 percent of
affected small entity applications in the biotechnology/chemical arts
and 98 percent of affected small entity applications in the electrical/
mechanical arts would fall into category 1 and would not incur any
notable incremental costs associated with the rule. The remaining 18
percent of affected small entity applications in the biotechnology/
chemical arts and 2 percent of affected small entity applications in
the electrical/mechanical arts would incur costs to comply with the
proposed rule requirements. In total, the analysis shows that an
estimated 1,825 small entity applications would incur compliance costs
under the proposed rule. Table 3 summarizes these results.
Table 3.--Small Entity Applications Containing Alternative Language by Cost Impact Category
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Biotechnology/ Electrical/ Total
chemical mechanical ---------------------
applications FY05 applications FY05
-------------------------------------------- Number Percent
Number Percent Number Percent
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Category 1: Small entity applications with 7,565 82 11,434 98 18,999 91
acceptable alternative language..............
Category 2: Small entity applications with 991 11 204 2 1,195 6
alternative language that claim multiple
inventions in a single claim.................
Category 3: Small entity applications with 270 3 0 0 270 1
alternative language that have claim(s) in an
improper format..............................
Category 4: Small entity applications with 360 4 0 0 360 2
alternative language that claim multiple
inventions in a single claim and have
claim(s) in an improper format...............
Total Small Entity Applications with 9,186 100 11,638 100 20,824 100
Alternative Language (Categories 1-4)........
[[Page 12683]]
Total Small Entity Applications with a Cost 1,621 18 204 2 1,825 9
Impact (Categories 2-4)......................
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In the Office's analysis of these applications, the number of
claims in an improper format ranged from one to four claims per
application. Some applications had only dependent claims that were in
an improper format, while others had only independent claims that were
in an improper format. One application had independent and dependent
claims in an improper format. Although the incremental cost faced by
applicants could vary depending on the complexity and number of claims
needing correction, the Office's use of AIPLA's 75th percentile unit
cost estimate for an amendment already accounts for some variation in
costs (i.e., the 75th percentile may be a high estimate for most
applications) and would seem to be a conservative figure.
In the Office's analysis of the sampled applications containing two
or more independent and distinct inventions that are claimed in the
alternative in a single claim, the median number of divisional
applications required to maintain the scope of the application was 5,
although some applications would have required more than 100 divisional
applications to maintain scope.
The wide variation in the estimated number of divisional
applications is informative when considering the cost impact of the
proposed rule for small entity applicants. However, the Office believes
that an applicant would need to file at most approximately seven
divisional applications following an examiner's restriction
requirement, even if more were needed to seek patent protection for the
full scope of the originally claimed inventions.\4\ Therefore, while
the cost impact of intra-claim restrictions could be as low as zero for
applicants that elect not to maintain scope, it could range as high as
the cost of seven divisional applications (present value of
approximately $42,000). However, the Office believes these applications
are relatively few in number and the impact for most applicants will be
far less.
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\4\ Applicants may file divisional applications sequentially to
keep a case pending for the lifetime of a patent (twenty years) to
take advantage of the time to determine whether any of their
inventions turn out to have market value. The least-cost method of
achieving this result would involve an applicant pursuing one
divisional application at a time over a twenty-year period. Assuming
the prosecution of each divisional application lasts three years, an
applicant would be able to minimize the total cost by filing
approximately seven divisional applications during this period.
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5. Description of any significant alternatives to the proposed
rules which accomplish the stated objectives of applicable statutes and
which minimize any significant economic impact of the proposed rules on
small entities: The Office has considered a number of alternatives;
however, none of these alternatives would accomplish the stated
objectives of applicable statutes with a lesser economic impact on
small entities.
(1) Hiring more examiners: This alternative would increase the
number of examiners available to review patent applications in general,
thereby improving pendency. It would not lead to impacts on small
entities. However, this alternative also would not make it any easier
to review applications containing problematic alternative language. The
Office is currently hiring as many examiners as resources permit. The
Office's ability to hire qualified new examiners is affected by many
components, such as budget, the economy, the availability of scientists
and engineers, and the ability to absorb and train new employees. Thus,
the Office already is employing this ``alternative'' to the extent that
its resources permit, but relying upon this alternative ``alternative''
alone without taking additional steps would frustrate the Office's
ability to grant quality patents in a timely manner that effectively
promote innovation.
(2) Charging additional fees for applications containing claims
using alternative language: This option could reduce the number of
affected small entities by creating a financial disincentive to
submitting applications containing claims using alternative language.
However, the Office's past efforts to seek patent fee adjustments does
not lead to an expectation that the Office would be successful in
obtaining a patent fee adjustment that would in fact recover the
Office's actual cost of examining applications containing claims using
alternative language. In addition, any patent fee adjustment for
applications containing claims using alternative language that was
sufficient to recover the Office's actual cost of examining
applications would likely have a greater economic impact on a larger
number of small entities than the proposed rule changes. Finally, for
applicants that chose to submit alternative language despite the
requirement to pay additional fees, this alternative would not improve
the patent prosecution process or result in higher quality patents.
(3) Limiting the number of species that may be presented in an
application: The rules of practice currently provide that if an
``application contains claims directed to more than a reasonable number
of species, the examiner may require restriction of the claims to not
more than a reasonable number of species before taking further action
in the application.'' See 37 CFR 1.146. A rule that set out a per se
limit on the number of species that may be claimed in an application
would not accomplish the objective of the proposed rules of treating
applications with two or more independent and distinct inventions
presented in a single claim. Furthermore, the potential change in the
scope of protection available via a single patent application likely
would have a greater economic impact on larger number of small entities
than the proposed rule changes.
(4) Exempting small entities (or take no action): While exempting
small entities from coverage of the proposed rules or any part thereof
(or taking no action) would avoid any incremental economic impact on
small entities, such exemption (or lack of action) would frustrate the
Office's ability to grant quality patents in a timely manner that
effectively promote innovation. It also would result in small entity
applications (or, in the case of no action, all applications) with two
or more independent and distinct inventions presented in single claim
that either: (1) Consume a disproportionate share of Office examination
resources per application and thus not effectively promoting innovation
in a timely manner; or (2) receive a less thorough examination, which
would decrease, rather than enhance, the Office's ability to grant
quality patents. Finally, given
[[Page 12684]]
the Office's estimate (as previously noted) that close to one third of
all patent applications containing alternative language are submitted
by small entities, this alternative would greatly diminish the rule
making's ability to improve the patent prosecution process and result
in higher quality patents.
6. Identification, to the extent practicable, of all relevant
Federal rules which may duplicate, overlap or conflict with the
proposed rules: The Office is the sole U.S. government agency
responsible for administering the provisions of title 35, United States
Code, pertaining to examination and granting patents. Therefore, no
other federal, state, or local entity shares jurisdiction over the
examination and granting patents.
Other countries, however, have their own patent laws, and an entity
desiring a patent in a particular country must make an application for
patent in that country, in accordance with the applicable law. Although
the potential for overlap exists internationally, this cannot be
avoided except by treaty (such as the Paris Convention for the
Protection of Industrial Property, or the Patent Cooperation Treaty
(PCT)).
Nevertheless, the Office believes that there are no other
duplicative or overlapping rules.
7. Request for data and information in support of the Final
Regulatory Flexibility Analysis: The Office welcomes comments
addressing the economic impact on small entities of any or all
provisions of the proposed rule. In particular, however, the Office is
soliciting information on the following:
1. Alternative approaches that would reduce the burden of the rule
for small entities while meeting the Office's objectives.
2. The costs of modifying an application that already is under
review as needed to comply with the rule:
a. The cost of filing one or more divisional applications.
b. The cost of correcting a claim that is in an improper format,
and factors that might cause this cost to vary.
3. The number of patent applications submitted by unique small
entities per year (or per decade).
4. Factors that influence an applicant's decision to file
divisional applications.
5. Issues that might affect the combined impact of alternative
language that requires intra-claim restriction and is of an improper
format.
6. The extent to which applicants will adjust to the new rules over
time, such that future initial patent applications containing
alternative language will comply with the proposed rule (i.e., the
applications will not need to incur the cost of amendments or
divisional applications due to alternative language that is of an
improper format or requires intra-claim restriction).
7. The benefits of the rule making.
8. Other information related to this Initial Regulatory Flexibility
Analysis, including any assumptions or findings stated above.
Dated: March 5, 2008.
John Doll,
Commissioner for Patents.
[FR Doc. E8-4744 Filed 3-7-08; 8:45 am]
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