One such development is a series of regulations issued by the U.S. Patent and Trademark Office (“PTO”) on August 21, 2007, that are scheduled to take effect November 1st. Patent applications pending on the effective date will become subject to the new rules, which will also affect any applications filed thereafter. The rules require an extensive prior art search and mandate a prior art analysis in unprecedented detail for inventions exceeding a certain threshold number of claims, namely either 5 independent claims or a total of 25 claims. This requirement cannot be avoided merely by submitting two or more applications for related subject matter, as the regulations aggregate the number of claims in such related cases (unless a Restriction Requirement separating “patentably distinct” inventions is issued by a patent examiner).
A separate provision withdraws the previously-unlimited opportunity to file continuation patent applications and requests for continued examination (RCEs). Those provided inventors an escape hatch from ill-conceived rejections by the patent examiner and the possibility of keeping a pending patent application alive for fine-tuning of patent claims even after a first patent on the subject matter had issued. The new rules allow two continuations and one RCE to be based on a given patent application. And they provide an option to petition for an exception to that limitation if the applicant proves why the continuation could not have been filed earlier. We anticipate that many patent prosecutions that at some point previously would have involved the simple expedient of filing a continuation or RCE will now require the more time-consuming and delay-invoking step of generating and briefing an appeal to the PTO’s Board of Appeals.
This drastic change in PTO practice comes at the same time as we experience a variety of court decisions with seismic effect on the previously-stable patent landscape. As mentioned in the New York Times article, on April 30th, the U.S. Supreme Court recalibrated the test for unpatentability of a new combination of parts or steps because it is “obvious” from the prior art. KSR v. Teleflex. The Supreme Court has also revised the rules as to how soon a challenge to a patent can be filed in court (which will affect how license negotiations are conducted) Genentech v. MedImmune; and whether a patent owner can expect to get an injunction when a court finds that a patent has been infringed. eBay v. MercExchange. And on August 21st, the Court of Appeals for the Federal Circuit made it more difficult for a patent owner to receive enhanced damages due to “willful infringement” of the patent. Seagate Technology.
It would be appropriate to argue that these changes in the aggregate amount to a massive “taking” of property by the government, intellectual property which should be protected pursuant to Article 1, sec. 8, clause 8 of the Constitution. If the weakening of the patent system means that in the future there will be less protection for innovations, then will there not also be less investment in the new businesses that would have commercialized them? And if that happens, will the existing large companies fill the innovation gap by ramping up their development activities, or would they tend to rest on their laurels without the gadflies of startups buzzing around?