Awaiting Kappos’ Decision on Claims and Continuations

David Kappos sworn in by Commerce Secretary Gary Locke at PTO campus in Alexandria, VA.

On Thursday, August 13, 2009, U.S. Secretary of Commerce Gary Locke conducted a ceremonial swearing-in of Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. In his remarks before thousands of employees on the USPTO campus, Secretary Locke said “David is taking on a big job… Promoting and protecting U.S. inventions, innovation and creativity directly affects our nation‘s welfare and prosperity.”  In his remarks at the ceremony, the New PTO Director took a not so subtle swipe at his predecessors, James Rogan and Jon Dudas, by saying: “To meet Secretary Locke’s direction to me, I will be HERE at the USPTO. I will minimize overseas travel, and focus domestic travel on listening to the U.S. innovation community and discussing our agenda with them.”  The capitalization of the word “here” is found in the official copy of Kappos’ remarks published on the USPTO website.  Those familiar with how the Patent Office has run over the last 8 years remember that Rogan, and to a lesser degree Dudas, famously traveled the country and the globe.  No doubt anything Kappos can do to demonstrate there is a new Sheriff in town will be welcomed by the patent bar, and all those who rely on the work done by the USPTO to assist them in achieving their business objectives.

Now with Kappos installed at the USPTO all eyes, and rampant speculation, turn to what will become of the claims and continuations rules.  As most probably know by now, just over two weeks ago the Department of Justice asked the United States Court of Appeals for the Federal Circuit to slow down its en banc consideration of the Judge Cacheris’ famous, or from the PTO point of view – infamous, decision to preliminarily and then permanently enjoin the USTPO from enforcing the claims and continuations rules that were to go into effect on November 1, 2007.   For a chronology through the original 3 judge panel hearing at the Federal Circuit see USPTO v. GSK & Tafas Chronology (published December 3, 2008).  Of course, after that was published, the 3 judge panel, with Judge Rader in dissent, awarded a victory to the Patent Office except with respect to the limits on continuations.  Perhaps most importantly, this panel decision opined that pretty much whatever the Patent Office wants to do is procedural, even when the promulgated rules substantively affect rights.  Of course, this decision was purely ridiculous.  Calling an examination support document merely “another document” and likening a hard cap on claims absent an ESD to a statute of limitations shows a complete lack of understanding of patent practice reality.  Luckily, the full Federal Circuit decided to rehear the case en banc.

In a twist that is strange in many ways, the Department of Justice on July 28, 2009, asked the Federal Circuit to hold off on moving forward with the rehearing of the claims and continuations appeal pending the installation and arrival of David Kappos.  Specifically, the DOJ filing explained that it would be prudent to hold off and allow Kappos, who had already been nominated, to take position at the USPTO and “determine what course the USPTO should take in the future with respect to those rules, including whether to rescind the rules.”  I have never seen or heard of such a petition being filed, but the DOJ and the parties agreed that this would be the prudent thing to do.  This is something that I have been suggesting for many months, starting at least as early as December 3, 2008, in USPTO v. GSK & Tafas Chronology (see paragraph 2), and then again when I wrote about my Patent Wishes for the New Year (see #5).

Shortly into 2009 I started receiving phone calls and e-mails strongly suggesting that I stop encouraging the Patent Office to withdraw the rules and moot the appeal.  The prevailing thinking seemed to be that this was the sensible thing to do and that the Patent Office may actually get wise and do just that.  Presumably, there were some that thought that the Patent Office might listen to me and consider my suggestions.  Obviously, that was not the case and never had any chance of being the case.  For reasons I will never fully understand, in this time frame the Patent Office simply thought they knew better and were not about to take suggestions.  This elementary school way of dealing with the patent bar was evidenced over and over again, but never more forcefully than when each and every comment received relating the the claims and continuations rules, including all 300+ unique comments and observations, were summarily rejected by the USPTO.  I found it both humorous and humbling that there were some who thought the PTO might listen to me.

Notwithstanding, at this point in time it seemed like everyone agreed that the Federal Circuit was going to affirm Judge Cacheris’ ruling, and there were many influential people who wanted to hear what the Federal Circuit had to say about the examination support document, because after all, there was no way that the Federal Circuit could be dupped by the PTO’s arguments that the examination support document was just another document the PTO could legitimately require.  PTO General Counsel Toupin even erroneously cited Federal Circuit precedent in the area of inequitable conduct in order to suggest that there would be few if any real concerns associated with preparing and filing an ESD, which some refer to as an “express suicide document,” and what I have always called the rope to hang yourself.  Luckily Judge Rader called Toupin on this, but ultimately to no avail given Judge Rader’s rational, and dare I say correct, view of the case was out-voted on the panel level.  See Oral Arguments Completed.

Then after the 3 judge panel decision erased Judge Cacheris’ scathing rebuke of Patent Office rulemaking, again on April 13, 2009 (see comment #3 – USPTO Budget Crisis), I once again started saying that the rules should be withdrawn.  This was followed on April 23, 2009,  when I wrote that if I were the Director of the PTO I would immediately withdraw the rules (see penultimate paragraph) and take the extremely Patent Office friendly opinion announcing virtually everything the PTO could ever want to do is procedural.

Then once the full Federal Circuit decided to rehear the case and vacate the original panel decision, the Patent Office is left like Superman with a bar of kryptonite stuck in his pocket, like Batman without a utility belt or perhaps a gambler who ignored common sense, played recklessly and nevertheless won the jackpot, only to keep playing long enough to lose all winnings and the money brought to the casino in the first place.  Yes, it seems that the Patent Office failed to take the words and wisdom of Kenny Rodgers to heart.  You absolutely, positively have to know when to hold them, know when to fold them, know when to walk away and know when to run, and the time for running was after the 3 judge panel of the Federal Circuit granted the Patent Office great big awesome genie powers!

If and when Kappos orders the claims and continuations rules withdrawn I will feel great pleasure in the fact that my suggested course of action from many months ago was finally adopted by the Patent Office.  Like so many other times that I have been told I was naive, wrong or embarrassingly incorrect, I will once again prove myself right.  I am no visionary, but I do think I look at most things rationally, logically and with a fair amount of common sense.  There simply was nothing to be gained by the Patent Office assault on the most commercially relevant innovations that the patent system is supposed to encourage most.  There was nothing to be gained by alienating the patent bar, making ridiculous arguments and all the while allowing pendency and the patent backlog to run out of control.  There was also no reason to look a gift horse in the mouth when the PTO won a surprise victory in March thanks to Judges Prost and Bryson.  So if and when Kappos does what we all are expecting, I will feel some pride and a whole lot of sadness.  It didn’t have to come to this, it should never have come to this, but if this is how and why the new Sheriff has been invited into town then maybe in the long run the frustration, pain and needless anxiety will all be worthwhile.


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Join the Discussion

9 comments so far.

  • [Avatar for Gene Quinn]
    Gene Quinn
    August 18, 2009 01:21 am


    You can point the finger at lawyers all you want. It doesn’t matter, and it doesn’t change reality. Odd how the PTO never wants to blame examiners who don’t read the specification, or examiners who manipulate the quota system and give ridiculous first actions that demonstrate they have not considered the invention or anything about the invention. It is also interesting that there is complaining about the changing in applications and information presented to the Office and never any consideration of why that is. The Federal Circuit refuses to acknowledge PTO rules relating to the duty of candor, so the PTO gets less. That is not a patent attorney problem, that is a Federal Circuit problem. Everyone talks about bad specifications and bad claims, but examiners don’t read the specifications anyway. As for the claims, thanks to the law generated by the Supreme Court and Federal Circuit on amending claims there is plenty of explanation for bad claims, although I think it is foolish. In terms of machine translated claims, these are likely claims that stem from foreign applications and they have been literally translated because that is all clients will pay for. So you can blame patent attorneys all you like, and some are to blame, but the problems are largely caused by others and patent attorneys react. It is hard to imagine a more reactionary group of people than patent attorneys, and to ignore the causes and blame patent attorneys simply ensures more problems, not solutions.

    In terms of lawyers with higher Reg Nos., youthful indiscretion perhaps, or perhaps it is reacting to being told by examiners “make this change and a patent will issue” only to learn after the change has been made that the real decision maker doesn’t have authorize a patent. Bait and switch, and patent examiners believing patent attorneys are the sole source of the problem have caused a lot of problems, and young patent attorneys are learning bad habits and how NOT to deal with examiners, as young examiners have learned from the previous administrations how evil all patent attorneys are.

    I agree. Everyone needs to accept some blame. I tend to think that most blame deserves to be place on the Federal Circuit, on the previous PTO administrations and Congress for not solving problems that are easy and obvious. The majority of patent attorneys and patent examiners are good folks, doing the best they can, and on the front lines, which means they are the ones providing easy targets.


  • [Avatar for ~~Logan~~]
    August 17, 2009 08:59 pm

    This was submitted !st but didn’t show, so reposting it. If the other shows, please delete this. thanks

    Uh, Gene, if you reread what I said above & previously you should know that I have basically already said what you do. I never indicated that the 2nd pair of eyes was good (just the opposite!) or that too many actions were being issued to get to disposal (” the number of actions to get to allowance is way up, as well. That is something the PTO needs to improve.”). Not sure what bee got in your bonnet about my post, but we have already agreed about most of what you posted & I didn’t say anything, above, contrary.
    My post was just pointing out that the RAW number of allowances has not changed much. I didn’t say that it was acceptable & acknowledged that cost, # of employees, etc have greatly increased. I think that you have really badly mischaracterized what I have said.

    Something that a lot of people like to point out in these “discussions” are selective facts. I prefer to see all the relevant facts put out there & then a better understanding can be gotten from them, Anyone can pick & choose some facts & make a point. It has a greater impact if all the facts are used. Here, explaining that about the same # of patents issued over about a 20 month time span 7 years apart could be a selected fact to shoot down the argument that “fewer cases are being allowed” that I see so often. Of course the allegation is false but the fact used to prove it is taken out of context as well.

    The real explanation is that while about the same number of patents issued over a corresponding time frame, VVV many more1st actions & YYY many more total actions were issued in the more recent time frame than earlier to get to those patents. And the number of examiners has increased by ZZZ between the two time frames, which helped to result in an increase of expenses of AAA. Therefore, there is an effective reduction in allowances relative to the number of cases being examined and the number of actions being issued and this reduction of allowances results in BBB less income from issue fees and CCC less income from potential maintenance fees if the amount of allowances relative to examiners & actions was similar to that of the earlier time period.

    THAT is what needs to be done to make the point, but people like to leave a lot of those facts out. THAT is ultimately the point of my earlier post.

  • [Avatar for ~~Logan~~]
    August 17, 2009 08:58 pm


    One other point. You said “until people inside the USPTO really come to terms with that and stop pointing the figure [sic]” (finger?). I DO agree that upper management (out or on the way out) has done this & it needs to change. However, I get REAL tired of the lawyers out there all acting like they are completely blameless.

    The lawyers out there, whether because of legal precedents, applicant greed, applicant not understanding patents, or (in some cases) ineptitude have had a hand in creating the problems we now face. Not the majority of the fault, but a share of it. I am sure I’ll get buried here by other posters for saying it, as you all dislike hearing that lawyers do anything to make the system worse, but it is the truth.

    If you talk to any long-time examiner, you will probably get the same answer.
    Comparing the applications we see today with those of 15-20 years ago, those today are:

    more poorly written, with many specs & claims being straight (machine?) translations;

    the claims are usually exceedingly broad (to the point of reading on whole subclass or class definitions and often reading on things that have been on the market for years prior to the filing of the case);

    the responses are usually little more than general allegations and quotes from cases where the relevance is limited (things like quoting the requirements for 102 and a page of case law – simply pointing out anticipation requires all elements to be shown etc. is sufficient. It can be done in a couple sentences) and are often not even addressing the real issues in the case (just saw a case where the lawyer spent half a page discussing that the examiner used the 2nd name of the 1st inventor on a Japanese reference instead of the 1st listed name as that would be the family name! And, yes, the rejection included the ref # so there was no question about the ref. being used. TOTAL waste of time & money for everyone); and

    the lawyers/applicants are much less willing to compromise & work with the examiner to get an allowance.

    While you all have reasons, mostly legitimate ones, for doing much of this, this has also contributed to the worsening relationships between examiners and lawyers as well as the lowering number of allowances.

    Another thing that we didn’t see before but are seeing more often is junior examiners & their work being treated with very little respect. We have seen repeatedly (different examiners & different applicants) where the same rejection is treated differently in responses depending on if the examiner or someone else signed the action (i.e., before & after passing the partial or full sig programs). Then again, I guess like you know when you are dealing with someone just out of the PTA (by the examiner #) we know that when we are dealing with lawyers with reg # over 50-55000 they are more likely to be more arrogant & less willing to work with the examiner. Guess they are still trying to impress the partners with how “good” their work is & how hard they fight for the case 🙂

    Anyhow, point is that BOTH sides need to accept some of the blame. There is plenty to go around & there needs to be improvements in the PTO, as well as the bar members & with the judges as well.

  • [Avatar for Gene Quinn]
    Gene Quinn
    August 17, 2009 05:05 pm


    Not only have salaries and expenses gone up over the 7 years, they have hired a lot more people and those people spend a lot more time working on a lot more complicated applications. So in terms of the work done the amount of money has dramatically decreased. You simply cannot focus on the real number of issued patents without considering the great amount of wasted time that goes into rejecting applications. What good is bringing in the same amount of money and having to do twice as much work to bring in that same amount of money. You do realize that is not sustainable, right? You do realize that is why the backlog is out of control and pendency is unacceptably high, right?

    You are entitled to your opinion, but we all know that John Doll thought that too many applications were being allowed so he artificially ordered the reduction in issuances. That is why second pair of eyes was instituted office wide. This was practically government malfeasance. The law says applicants are entitled to receive a patent unless there is s justifiable reason. Rigging the system to force down allowances is inexcusable.

    The Office under Dudas was to blame for the problems, no one else. Those examiners who simply refused to allow any patents for years are also to blame. I understand not wanting to lose bonuses and have quality review cause problems, but the job is to issue patents, not to ignore that public responsibility. We know this happened. Not all examiners did it, and not all management officials are to blame, but those that are to blame caused the problem and unless and until people inside the USPTO really come to terms with that and stop pointing the figure and claiming the real facts are misleading there will be no good come of anything.


  • [Avatar for ~~Logan~~]
    August 17, 2009 03:44 pm

    Gene, I took a look at your link. It doesn’t actually have the numbers of allowances that I was asking about.

    So, I did a quick EAST search….
    For the time period from 1/1/2008 until today (8/17/2009) it shows 299,266 issued patents.
    For a similar time period of 1/1/2001 to 8/17/2002 shows 294,044 issued patents.

    So, the RAW number of issued patents has apparently _increased_ compared to 7 years ago. That would mean a slight increase in the amounts of maintenance fees collected (for the moment ignoring economic factors which may result in some companies not paying maintenance fees). It would appear that it is not so much that office revenues have “gone down” due to “not allowing”, but expenses have gone up a lot more than the allowances have.

    Now, I do know that PTO costs have gone up a lot in the last 7 years (a LOT of new examiners, salary increases, etc.), so the additional 5K allowances will not make up those costs. And the number of actions to get to allowance is way up, as well. That is something the PTO needs to improve.
    But to put ALL of the blame on the examiners (or office in general) and saying we are not allowing cases, and leaving it there, as is too often done, is a bit misleading.

    Just some points to think about.

  • [Avatar for Gene Quinn]
    Gene Quinn
    August 17, 2009 03:00 pm


    Excellent question. Take a look at:

    The first chart is one presented by Rob Clarke, Director of the Office of Legal Administration, at a PLI conference back in March 2009. I think it quite clearly demonstrates the problem facing the Patent Office.


  • [Avatar for ~~Logan~~]
    August 17, 2009 02:45 pm

    Gene et al.,

    As I indicated previously, I do agree that the emphasis in recent years on rejection instead of getting to allowance/disposal was “ill advised”. I have a question about the stats repeatedly cited, however. The percent allowed, as quoted above, show a drop from “70%” to “43%”. Can anyone easily dig up the raw numbers? How do the actual number of allowances the last couple of years compare to the number of allowances from around 2000 or so? I think that this is another factor that needs to be shown to properly reflect how maintenance fees will effect our future budgets.

  • [Avatar for OldTimer]
    August 17, 2009 12:04 pm

    Dale–no, IBM is not a big user of continuations in their patent prosecution strategy. The continuation practice changes would have had little or no effect on IBM’s patent acquisition operations.

    Gene, don’t you think that if the PTO has a change of heart, that much of their newly found flexibility would be due to the changed circumstances at the PTO. When the continuation rules were drafted the PTO was flush with cash, flooded with work, and facing large annual increases in the number of new application filings. Then KSR and the recession came along. Now the PTO is effectively bankrupt, still flush with a backlog, but facing large annual decreases in new filings. (Many large filers are cutting their filings by 30-50%).

    From a purely fiscal perspective, Kappos has to either (a) figure out how to ramp up both the number of new applications filed and the allowance rate, or (b) put a plan in place to manage the PTO’s inevitable decline in the coming years. In an environment in which fewer patent applications are being filed and the allowance rate has dropped from 70% to 43%, there will be far, far fewer issued patents on which to collect maintenance fees, which constitute 70% of the PTO’s revenue. This environment is fiscal Armageddon for the PTO. The only self-contained solution is to drastically increase filing and examination fees, which is self-defeating because it will discourage new patent filings. Can you say “downward spiral?”

    In this context, dropping the continuation rules is a good start. I think you’ll see the PTO running Blue Light Specials and Twofer Tuesdays soon.

  • [Avatar for Dale B. Halling]
    Dale B. Halling
    August 17, 2009 11:06 am

    I believe that IBM is a big user of continuations in their patent prosecution strategy. As a result, there may be some hope that Kappos will reverse Dudas’ position and have the PTO throw out this whole nonsense on claims and continuations.