The U.S. Patent and Trademark Office has recently proposed seemingly routine procedural updates that may have policy effects that could be better addressed through legislation. Are these updates attempts to “nudge” patent filers, or are the updates better defined as “sludge” (a term coined by some researchers for attempts to influence people by “increasing friction”)?

A first example is proposed fee updates. Some argue that the updates proposed to begin October 1, 2024, are intended to persuade patent filers to file fewer patent continuations. This is a reasonable conclusion given the brand-new surcharges (in addition to standard filing fees) of $2,200 for any continuation after 5 years from priority, and $3,500 after 8 years. Patent continuations may seem arcane, but making them more costly could significantly restrict the ability of patent applicants to protect their inventions.

Patent Continuations

A single research and development project usually results in multiple patentable ideas, but it is the patent “prosecution” process that helps tease out exactly how much is patentable. During prosecution of a patent application, a patent attorney first helps the applicant describe the new ideas in as much detail, and with as much context, as possible. Then some aspects of this longer description are chosen to be part of the patent’s numbered list of “claims,” which specifically define the inventions protected by the patent. Any combination of elements in the description of the invention can be included in the claims, but practical constraints usually limit the claims to three to five core concepts. These are listed as the application’s “independent” claims, the main claims in the application. However, these core concepts are often combined with subsidiary features in “dependent” claims, which protect more specific implementations. As a result, a typical patent application includes 20–40 claims. However, this may change, as the new USPTO proposal would also double the fees for claims beyond the first 20.

Even when a patent application is limited to 20 total claims, only a few of which are independent, U.S. Patent Examiners often determine that the initial claim set is not focused enough. They thus require the applicant to choose for review a subset of the initial claims. This means that some of the patentable aspects of the application’s original description of the invention will not be considered in the original patent application and will not be included in the claims of the patent that ultimately issues.

After the applicant selects a subset of claims for review, the patent attorney negotiates the exact language of the claims with the Examiner. The Examiner may insist that additional features be added to the claims to distinguish the inventions in those claims from previous technology found by the Examiner.

After agreement is reached on the language of the claims and the patent is approved to issue, the applicant may file one or more “continuation” applications to seek review of claims that were not reviewed in the original application. These unreviewed claims can represent a significant portion of the potentially patentable material in the original application’s description of the invention.

Continuation applications are entitled to the same filing date as the original application, and involve fees similar to the initial patent filing fees. Examiners analyze the claims in continuation applications in the same manner as the original application. Separate patents usually issue for each application, resulting in a “family” of patents that collectively seeks to claim the inventive contributions from the original filing. Patents in this family will typically expire at the same time (around 20 years from the initial priority date). Thus, applicants have an incentive to seek patent claims on the most valuable aspects of their research project first, so these aspects will enjoy exclusivity during a longer portion of this limited term.

By adding steep surcharges for later-filed continuations, the USPTO would be implementing a policy that substantively disfavors claims in continuation applications. In many cases, it could result in significant portions of an invention being disclosed to the public but not included in any claim, which means the inventor receives no benefit in return for revealing that subject matter to the world. This result could be considered in tension with the U.S. Constitution’s statement in Article I, which seeks to secure each inventor’s “exclusive Right” in his or her invention in order to encourage innovation and “promote the Progress of Science and the useful Arts.” The policy incentivizes patent filers to break their patent applications into smaller pieces and prosecute them in parallel (a significant expense which may be especially hard on smaller companies). The policy makes it more difficult to “mine” the patent’s description of the invention and to defer the legal costs of thorough prosecution through serial continuations. The policy would also favor large companies over private inventors.

Targeted Claims

By discouraging continuations, the USPTO also undermines another fair and reasonable tool of patent protection: targeted claims. Because issued patents are public, a competitor can study the details disclosed in a patent application and copy ideas that are not yet claimed. Continuation patents are the most effective deterrence to such a coopting technique. Upon noticing such activities by competitors, a patent filer can prepare additional claims that target the copied aspects of their own patent description and eventually get claims to enforce against the coopting competitors. The USPTO’s new policy could require patent filers to attempt a more exhaustive up-front analysis of the value of their research results, since it will be more expensive and difficult to let the patent process itself help them determine the value and relevance of their inventions.

Double Patenting and Terminal Disclaimers

A second example of USPTO policy expression is packaged as a proposed update to “terminal disclaimer” practice. Sometimes an Examiner will consider some claims in an application to be too similar to a claim in one of the applicant’s issued patents. This results in the new claim being rejected for “double patenting,” as the USPTO does not want a duplicate claim to effectively extend the expiration date of the claim in the issued patent. An applicant can overcome that rejection by filing a “terminal disclaimer.” Such a disclaimer is essentially the applicant’s agreement that the new patent claim will expire on the same day as the claim in the issued patent, eliminating the concern about extending the expiration date of the claim in the issued patent. 

However, the USPTO has now proposed to change terminal disclaimer practice to restrict patent filers much further. Filing a terminal disclaimer would require agreement that the patent owner will not enforce the subject patent if any patent to which it is tied is held unpatentable. So not only would the two patents expire simultaneously, but if one is held invalid, the other would automatically be invalidated. This is a significant change, since normally each patent is judged against the prior art on the merits of its own claims, not the claims of other patents.

This policy change will raise the stakes for terminal disclaimers, and ultimately disincentivize attempts to exhaustively claim aspects of a patent application’s full disclosure. If a claim set could be deemed overlapping or similar to a previous claim set, it could provoke a double-patenting rejection and a request for a terminal disclaimer. If the terminal disclaimer is entered, it would tie the two patents together, allowing future infringers to pick off entire patent families by attacking only a single patent. In practice, patent filers will be much less likely to take this path and will instead alter their claims or argue more strenuously against the double-patenting rejection. This will significantly increase the cost of patent prosecution.

Mere Procedural Changes?

The examples above suggest the USPTO is attempting to enact significant policy changes that have not been the subject of legislative debate and compromise. Although advanced through administrative procedural vehicles, these changes will substantially impact the U.S. patent system. Interested inventors, patent holders and patent professionals should be aware of these coming changes and consider whether they should seek to implement any nudges of their own through appropriate political involvement.

Note from the Editor: The Federalist Society takes no positions on particular legal and public policy matters. Any expressions of opinion are those of the author. We welcome responses to the views presented here. To join the debate, please email us at [email protected].