On Sept. 16 last year, President Obama signed the Leahy-Smith America Invents Act (AIA) into law. Although there are a number of significant patent reforms included in the new law, one of the more immediate and interesting changes is the creation of a Prioritized Examination process, which allows applicants to request accelerated examination in exchange for payment of an additional fee.
Under this new procedure, which launched on Sept. 26, certain U.S. patent applications filed with a Request for Prioritized Examination will be placed on an examination track to reach final disposition within 12 months, on average. This procedure provides inventors and applicants with an inexpensive, less-prohibitive alternative to the regular patent prosecution route, which, on average, takes about three years before reaching final disposition, and to existing programs for expediting patent examination.1
Orthopedic device companies, particularly those trading patent rights for investment or licensing opportunities, and/or those regarding patent rights as an important defensive tool against infringers, may wish to consider using this procedure to significantly expedite patent prosecution.
The Mechanics
The Prioritized Examination procedure is a part of an ongoing effort by the U.S. Patent and Trademark Office (USPTO) to “provide applicants with greater control over when their utility and plant applications are examined and to promote greater efficiency” in the patent examination process.2
Under this new procedure, a patent application, filed on or after Sept. 26, 2011, may be granted Prioritized Examination status, subject to the following requirements:3
1. Application Type. The application must be a nonprovisional application for an original utility or plant patent filed under 35 U.S.C. § 111(a). The application can be a continuing application (e.g., a continuation or divisional application). However, a continuing application is not automatically given Prioritized Examination status based on the status of the parent application. Rather, each continuing application must on its own meet all requirements for Prioritized Examination under 37C.F.R. § 1.102(e). Furthermore, the procedure for Prioritized Examination does not apply to international applications, design applications, re-issue applications, provisional applications and reexamination proceedings.
2. Complete Application. The application must be complete under 37 C.F.R. § 1.51(b). That is, the application must be filed with an oath or declaration under 37 C.F.R. § 1.63, the basic filing fee, the search fee, the examination fee, any excess claims fees, and any application size fee. In addition, a utility application must be filed via the electronic filing system of the USPTO, called EFS-Web.
3. Request and Fee. The application must be filed with a Request for Prioritized Examination, such as the certification and request form PTO/SB/424 that is available on EFS-Web. A request fee of $4,800 ($2,400 for a small entity) is required at filing, which is on top of the aforementioned filing, search, examination, processing, and publication fees, as well as any applicable excess claims or application size fees.
4. Claims and Amendment. The application, as filed, must contain no more than four independent claims and no more than 30 total claims. In addition, the application must not contain any multiple dependent claims. While it is possible to file a preliminary amendment at the time of filing the application to present a conforming set of claims, the USPTO indicates that it is strongly encouraged for applicants to file applications without any preliminary amendments. It also should be noted that in an application that has been granted Prioritized Examination status, if at any time during prosecution an amendment is filed that results in a non-conforming set of claims, the Prioritized Examination procedure will automatically be terminated.4
5. Number Limit. The AIA currently limits the number of Requests for Prioritized Examination under 37 C.F.R. § 1.102(e) in each fiscal year to a maximum of 10,000, while providing that the USPTO may by regulation change the number of filings that may be accepted. The USPTO has indicated that the fiscal year 2011 limit is 10,000 and that it will revisit this limit at the end of the fiscal year to evaluate what the appropriate maximum should be, if any.5
In connection with the current annual numerical cap of 10,000, the USPTO has indicated that applications entering the national stage under 35 U.S.C. § 371 are not eligible for now. However, an international application may be entered into the United States as a “bypass” continuation under 35 U.S.C. § 111(a), which is eligible to participate in the Prioritized Examination program. The USPTO also indicated that it may reconsider the exclusion of applications entering the national stage under 35 U.S.C. § 371 at a future date.
In summary, procedurally or mechanically the Prioritized
Examination procedure is not significantly different than what typically is required of a regular patent application. The main difference is the upfront fee—$4,800 for a non-small entity, and $2,400 for a small entity.
The Pros
1. Shortened Examination Time. The Prioritized Examination procedure offers a significant shortening of the time spent in the examination/prosecution of an application. Under Prioritized Examination, an application will be accorded special status and placed on the examiner’s special docket throughout its entire course of prosecution. The USPTO’s goal is to, on average, provide a final disposition within 12 months of prioritized status being granted.6 This is a significant shortening of examination time (and expenses associated therewith) compared to current wait time.
As can be seen from the USPTO FY 2010 data (on page 82), currently utility, plant and reissue (UPR) applications on average await 25.7 months before receiving a first office action, and on average spend 35.3 months in examination before reaching a final disposition.7 Medical devices fall under Technology Center 3700, for which the average wait time is 27.7 months before receiving a first communication on the merits, and on average an additional 10.7 months before final disposition.
As such, Prioritized Examination offers a quick, inexpensive option for obtaining a patent, which is more valuable than a pending application for a number of reasons. For example, because an issued patent enjoys a presumption of validity, and has a more defined scope of claim coverage than a pending application, the ability to obtain a patent quickly will enable medical device companies to more effectively market and protect their products, particularly those that are constantly subject to improvements, redesigns and replacements.8
Prioritized Examination also is beneficial to medical device companies seeking to leverage their patent rights to establish and/or maintain their competitive position in a fast-changing market. In particular, with an issued patent, a startup medical device company will be better positioned for investment considerations; a growth-stage medical device company may be enabled to identify more partnership and cross-licensing opportunities; and an established medical device company will be able to better defend itself against potential infringers. Since issued patents have less uncertainty than pending applications, they are viewed more favorably by investors and licensees, while being more of a deterrent to infringers.
2. Reduced Burden. Compared with the USPTO’s existing programs for expediting examination, the Prioritized Examination procedure is advantageous in that it significantly reduces theburden on the applicants.9 For example, unlike the Accelerated Examination program implemented in 2006, the Prioritized Examination procedure does not require a pre-examination prior art search and does not require an Accelerated Examination Support Document (and the rigorous requirements for preparing such support document). As such, under the Prioritized Examination procedure, applicants are not required to identify and characterize any prior art, which had been a significant burden under the Accelerated Examination program.
In addition, the Prioritized Examination can lessen the financial burden on the applicant. In particular, the upfront request fee is likely to save costs for applicants in the long term. For comparison purposes, the costs for pursuing Accelerated Examination can range upward of $10,000 to $20,000 independent of the costs for preparing the application itself. In exchange for the relatively modest cost associated with Prioritized Examination, applicants could potentially save on average one to three years of attorney fees for the upkeep of the application.
3. Global Strategy. Global patent protection has become increasingly important for companies big and small in today’s global economy. An added advantage of faster allowance of U.S. patents, promised by the Prioritized Examination procedure, is that U.S. patentees may be able to accelerate patent examination in certain foreign countries. The USPTO has a number of bilateral Patent Prosecution Highway (PPH) agreements with various foreign patent offices.10 Under the PPH, an applicant receiving a ruling from the Office of First Filing (OFF) that at least one claim in an application filed with the OFF is patentable may request that the Office of Second Filing (OSF) fast track the examination of corresponding claims in the corresponding applications filed in the OSF. Therefore, a potential strategy is to use the USPTO as the OFF and obtain allowable claims under the Prioritized Examination procedure quickly, and then proceed to fast track examination in OSFs. This combined Prioritized Examination-PPH strategy will allow applicants to obtain patents in both the USPTO and eligible foreign patent offices faster and more efficiently.
The Cons
1. The Rush to Filing. As discussed above, the current limit on the number of Requests for Prioritized Examination is 10,000. Even in a best-case scenario, only 10,000 applications will result, which is a small fraction (about 2 percent) compared to the total number of 479,664 utility and plant applications filed in FY 2010.11 Savvy medical device companies thus have begun to rush to file their applications. Additionally, there is at least one more reason for this rush: first inventor to file.
Under the AIA, the current “first-to-invent” system is set to be replaced with a “first-inventor-to-file” system, effective March 16, 2013.12 A first-inventor-to-file standard grants patents to inventors who first filed a patent application with the USPTO, whereas the current system grants patents to the first inventor, regardless of which inventor filed a patent application first. First-inventor-to-file encourages inventors and companies to file their patent applications quickly rather than rely on the U.S. 12-month grace period for public disclosures. As such, medical device companies may feel added pressure to stake their priority claim at the USPTO office before their competitors.
This rush to filing may potentially result in weaker, less well prepared applications that may be filed at the USPTO before the technology is fully understood. This presents a problem because the examiner may reject the application based on potential written requirement and enablement issues. Such rejection may result in a more restricted set of claims, making it easier for competitors to obtain design around patents. Thus, medical device companies should look to balance the urge to filing quickly and the need to prepare adequate applications.
2. Enforceability Consideration. Although the Prioritized Examination procedure can lead to a faster issued patent, careful consideration also should be given to post-issuance enforceability and enforcement strategies. For example, patents issued from less well prepared applications are more vulnerable as a defensive tool, particularly under the new Post Grant Review (PGR) system introduced by the AIA.13 Under PGR, any third-party, within nine months of issuance of the patent or reissue patent, may request a post-grant review proceeding to invalidate one or more claims of any patent by asserting an invalidity argument and providing supporting evidence.14 In a competitive market such as medical devices, PGR is likely to be used to challenge the validity of a competitor’s patent.
Competitors also may use the PGR process as a tool to delay the patentee’s ability to enforce the issued patent. In a civil action alleging infringement of a patent, a court may stay its consideration on the basis that a PGR has been filed or instituted, unless that civil action is filed within three months of the issuance of the patent.15
As such, to minimize the costs of investment that could result in delayed enforceability of the issued patent, applicants should make sure that the claims and the specification are well written and meet the requirements for patentability.
It should be noted that, however, the PGR provision will take effect Sept.16, 2012, and will apply only to “first-inventor-to-file” applications filed on or after March 16, 2013. Therefore, filing applications before March 16, 2013, to the extent possible, may help avoid potential third-party challenges under the PGR.
3. Preference to Prolonged Prosecution. For companies that wish to prolong prosecution for strategic reasons, they should be dissuaded from the Prioritized Examination procedure. For example, if venture capital funding is still being sought or research and development is still ongoing, it may make more sense for companies to avoid the prioritized track. Rather, the regular examination track may be more suitable where it is possible to take advantage of available extensions of time in responding to Office Actions.
Final Recommendations
To maximize the benefits of Prioritized Examination, it would be prudent to combine it with other strategies such as first-inventor-to-file, PGR and PPH. For example, once the first-inventor-to-file system becomes effective, medical device companies using the provisional filing procedures may wish to file, within the 12-month pendency period of the first provisional application, a number of follow-on provisional applications to cover alternative embodiments as their R&D program develops.
By the anniversary of the filing of the first provisional application, the subject matter in all of the provisional applications may be combined into one non-provisional application. If desired, the subject matter no longer relevant to the business strategies of the company may be excluded. Prioritized Examination of the non-provisional application can then be requested, if appropriate. This way, medical device companies not only will be able to keep their filings up to date, but also will benefit from the earlier filing of the first provisional application, in a cost effective way.
The 12-month grace period for public disclosures promised by the first-inventor-to-file system also can be strategically leveraged. To the extent that certain types inventions are excluded from patentable subject matter in foreign jurisdictions but uniquely patentable in the United States (e.g., method of treatment claims), companies may consider publicly disclosing such invention in the United States and subsequently take advantage of the 12-month grace period before filing, thereby effectively blocking competitors from competing for U.S. priority. It should be cautioned that this public disclosure strategy must be used with careful considerations, including the nature of invention and competitive landscape, in narrowly tailored circumstances.
Furthermore, as discussed above, to avoid potential third party challenges under the PGR, medical device companies should consider filing their applications before the March 16, 2013, deadline. In addition, the combined Prioritized Examination-PPH strategy should be leveraged to obtain patents in both the USPTO and eligible foreign patent offices, both faster and more efficiently.
Medical device companies should start reviewing their patent portfolios as soon as possible.
Examination of pending applications may be expedited by filing a continuing application with a Request for Prioritized Examination. For new applications to be filed under the Prioritized Examination procedure, care should be taken in preparing such new applications so as to not only cover the core technology but also future improvements and alternative embodiments. In terms of claim strategy, companies should carefully consider the most relevant prior art and present a set of claims based on what the applicant is entitled to in view of the prior art. It also is recommended that a complete schedule of claims be filed, from the broadest to which the applicant believes he is entitled in view of the prior art to the narrowest which the applicant is willing to accept. In many instances this may require a conservative approach toward the claims where the applicant may choose to submit and accept a relatively narrow set of claims, while leaving the pursuit of broader claims for a continuing application that is not on the prioritized track.
Last but not the least, it is important to seek professionaladvice from a patent counsel.
References & Authors’ Notes:
1.“United States Patent and Trademark Office Performance and Accountability Report Fiscal Year 2010” at 12.
2. “Changes To Implement the Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures (Final Rule).” Federal Register 76:64 (April 4, 2011), pp. 18399-18407 at 18400.
3. “Changes To Implement the Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures Under the Leahy-Smith America Invents Act (Final Rule).” Federal Register 76:185 (Sept. 23, 2011), pp. 59050-59055.
4. However, upon mailing of a final rejection (at which point Prioritized Examination is terminated), applicants may amend the claims to place them in independent form where dependent claims were found allowable, or add new claims, subject only to the limitations applicable to any application under final rejection. Id. at 59051. Similarly, upon mailing of a notice of allowance, applicants may submit amendments to the claims, again subject only to the limitations applicable to any application that has been allowed. Id.
5. According to USPTO statistics, a total of 847 Prioritized Examination applications were filed for FY2011 (i.e., between Sept. 26 and 30, 2011). Of those, 239 have been granted prioritized status as of Oct. 13, 2011. From Oct. 1-13, 2011, a total of 317 applications have been filed with a Prioritized Examination request. See www.uspto.gov/aia_implementation/.
6. The final disposition for the 12-month goal means that within 12 months from the date prioritized status has been granted that one of the following occur: (1) mailing of a Notice of Allowance; (2) mailing of a Final Office action; (3) filing of a Notice of Appeal; (4) completion ofexamination as defined in 37 C.F.R. § 41.102; (5) filing of a Request for Continued Examination; or (6) abandonment of the application. Id. at 59051. If allowance of the case has not been reached by this time, filing of an appeal or a Request for Continued Examination is required to further prosecution. Id.
7. “United States Patent and Trademark Office Performance andAccountability Report Fiscal Year 2010” at 128.
8. 35 U.S.C. § 282 (2002).
9. Existing programs at the USPTO for expediting examination such as Petitions to Make Special based on an applicant's age or health, the Patent Prosecution Highway, the Green Technology Pilot Program, the Patent Application Backlog Reduction Stimulus Program, and the Accelerated Examination Program.
10. These foreign patent offices include Australia, Austria, Canada, Denmark, the European Patent Office, Finland, Germany, Hungary, Israel, Japan, Korea, Mexico, Russia,Singapore, Spain, Sweden, Taiwan and United Kingdom.
11. “United States Patent and Trademark Office Performance andAccountability Report Fiscal Year 2010” at 125.
12. Leahy-Smith America Invents Act, H.R. 1249 at 2.
13. Id. at 16-30.
14. The standard for commencing PGR is either it is more likely than not that at least one of the challenged claims is un-patentable or PGR would resolve an important or unsettled legal question important to the patent system. See Id. at 23-24.
15. Id. at 24.
Chinh H. Pham is a shareholder in Greenberg Traurig’s Intellectual Property Department and Co-Chair of the Boston Office Intellectual Property Practice Group. He is a registered patent attorney with particular experience in the strategic creation, implementation, and protection of intellectual property rights for high technology clients. Mr. Pham can be reached at phamc@gtlaw.com. Fang Xie, Ph.D., is a patent agent in Greenberg Traurig’s Intellectual Property Department. She focuses her practice on developing and maintaining clients’ intellectual property rights both in the United States and abroad. Her technical areas include nucleic acid synthesis and sequencing, antibodies and immunotherapy, cancer and chemotherapy, pharmaceuticals, synthetic organic chemistry, as well as medical devices and nanotechnology. Dr. Xie can be reached at xief@gtlaw.com. Disclaimer: Dr. Xie contributed to this article under the supervision of Mr. Pham. Dr. Xie is a registered patent agent and not admitted to the practice of law.