Adopting To First-to-File: The Significance of Segregating Subject Matter

19 April 2012 PharmaPatents Blog
Authors: Courtenay C. Brinckerhoff

One important strategy for adopting to the first-to-file system of the America Invents Act will be to segregate subject matter that has an effective filing date of March 15, 2013 or earlier from subject matter that has an effective filing date of March 16, 2013 or later. This is because even after March 16, 2013, it will be possible to pursue subject matter with an earlier effective filing date under the current first-to-invent system as long as it is segregated from subject matter with a later effective filing date. (For a more detailed explanation, see my previous article on The First-To-File Poison Pill.) While my previous article on the Ides of March outlined several reasons why it could be important to obtain an effective filing date of March 15, 2013 or earlier, Max Colice, a patent agent and member of the Electronics practice at Foley & Lardner LLP, has pointed out yet another reason to segregate subject matter before and after the first-to-file effective date.

The First-To-Invent/First-To-File Scenario

Application A discloses Invention A and Invention B but claims only Invention A. Application A is filed by March 15, 2013, and so is governed by the current first-to-invent system.

Continuation-In-Part Application C with claims directed to old Invention B and new Invention C is filed on or after March 16, 2013. Because it includes claims to Invention C which has an effective filing date on or after March 16, 2013, it is governed by the first-to-file system.

Scenario 1: The Claims Are Rejected During Prosecution

During prosecution, claims directed to Invention B are rejected over Reference X, which qualifies as prior art under the first-to-file version of 35 § 102, but that would not qualify as prior art under the first-to-invent system.  (Reference X could be a U.S. patent application that was filed after Application A was filed but that claims priority to a foreign application filed earlier, or a journal article published less than one year before Application A was filed, but after the date of invention of Invention B.)

As long as Application A is still pending, the Applicant could file a new continuation application based on Application A, and use that application to pursue claims to Invention B. As long as all claims in the new continuation application are entitled to the effective filing date of Application A, the application will be subject to the first-to-invent system, and the Applicant will be able to avoid or antedate Reference X.

If Application A is not pending, the Applicant could not obtain the same result by filing a new continuation application based on Application C, even if the new application only claims subject matter entitled to the effective filing date of Application A. That is because any application that claims priority to Application C will be subject to the first-to-file system.  (For a more detailed explanation of this rule, see my previous article on The First-To-File Poison Pill.)

Scenario 2: The Claims Are Challenged In A Patent Trial Proceeding

CIP Application C is granted with claims directed to Invention B, but is subject to Post Grant Review or Inter Partes Review based on Reference X.

The Applicant has no substantive arguments against Reference X and cannot avoid it under the first-to-file system, and so cancels the claims to Invention B.

If Application A is still pending, could the Applicant file a new continuation application based on Application A, and use that application to pursue claims to Invention B? Not according to the USPTO’s proposed rules!

Proposed rule 37 CFR § 42.73 reads:

§ 42.73 Judgment.
* * * * *
(d) Estoppel—
* * * * *
(3) Patent applicant or owner. A patent applicant or owner whose claim is canceled is precluded from taking action inconsistent with the adverse judgment, including obtaining in any patent:
(i) A claim to substantially the same invention as the finally refused or cancelled claim;
(ii) A claim that could have been filed in response to any properly raised ground of unpatentability for a finally refused or cancelled claim; or
(iii) An amendment of a specification or of a drawing that was denied during the trial proceeding.

On it’s face, this rule seems to prohibit the Applicant from pursuing claims to Invention B in any other application, including in an application where Reference X could not even be cited as prior art! (As outlined in Andrew Baluch’s article discussing Three Proposed USPTO Board Rules That Should Not Be Adopted, this proposed rule may exceed the authority of the America Invents Act.) This means that claims that could have been granted under the first-to-invent system may never be granted because they were pursued in an application subject to the first-to-file system.

An Unjust Result? 

This scenario highlights the potential consequences of failing to segregate subject matter with an effective filing date of March 15, 2013 or earlier from subject matter with an effective filing date of March 16, 2013 or later, but also highlights the potential impact of the USPTO’s proposed estoppel rule. Why should the strategies available to address a rejection depend on whether the Patent Office has made the rejection during prosecution or during a patent trial proceeding? Why should a patentee have fewer options for preserving its rights against a third-party challenge than it had as an applicant during prosecution? If the third party challenge were raised in litigation instead of in the USPTO, would any principle, doctrine or rule prevent the patentee from pursuing the claims to Invention B in a new continuation application?

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