Conducting market research is an extremely important precursor to getting a patent. It is the process that answers the question ‘Is this even worth it?’ Indeed, without conducting market research, you are in essence making a blind guess that someone, somewhere will want to buy whatever it is you ultimately make. This is a costly error, and it is also a needless one. By taking the time to research your market, you can firm up exactly who that someone is and how they will buy your product. You can then proceed to market to them with the confidence that only real knowledge and insight can offer.

So what exactly is market research, and how do you conduct it? The best way to think about market research is answering a series of questions. Each one you answer will unlock some more of the puzzle that is creating and profitably selling something from your patent. That said, you should conduct market research in phases. The first phase is market information.

In this phase, you want to immerse yourself in trade journals, spec sheets, and periodicals about the industry your patent pertains to. You want to discover the prices of various commodities in the market that you will traffic in, the supply and demand patterns that determine the flow of the market. The goal of all this fact-finding is answering the following questions:

1. Who are my customers? (age, sex, income, etc.)

2. Where are they and how can I reach them? (what magazines/newspapers do they read?)

3. What quantity (and quality) do they want? (are there surveys that gather this data?)

4. What is the best time to sell? (Seasonal, yearly, etc.)

The importance of gathering information about your market cannot be stressed enough. As evidence, just imagine trying to seriously go out and sell a product to a market you know nothing about. How would you know where to sell? How would you know how to package it, and in what quantity? How would you know what warranties or guarantees to offer? None of these questions need to be mysteries to you, and if you are going to succeed, they cannot be.

Another important aspect of market research is market trends. This is the upward or downward movements of your specific market during a period of time. Now, the size of a market is obviously more difficult to determine if your product is brand new. But even in this case, you will have to derive your figures from the number of customers in an existing market. Let’s say you have invented a chip that gets implanted into your brain so you can control the TV with your thoughts. This is a new product, to be sure, but you can and must use existing markets to gauge your likelihood of success. For example, you would seek sales figures and segment data about the universal remote control market, which is arguably the closest comparison to what you have invented and want to sell.

In addition to market size, you want to determine information about your competitors. Are your major competitors growing in profitability and size, or shrinking? Which customers are they trying to reach? What are their profit margins? What channels do they advertise through? This information can be obtained by first-hand observation (ie, studying their fliers or commercials, interviewing present and former employees, etc.) or through other sources.

As mentioned earlier, industry trade journals are an excellent source of market research data. Most public and college libraries offer massive electronic databases where these journals can be read, studied, and printed for your analysis. These are often considered the definitive sources for conducting market research, so you would be well-advised to consult them.

In addition to libraries, many trade journals and industry sources can be accessed via the Internet. Yahoo, for example, offers an abundance of such material segmented by industry. Simply click the industry you want to research (law, jewelry, automotive, etc.) and you can browse a list of sources pertaining to them.

SRC: http://dir.yahoo.com/Business_and_Economy/Business_to_Business/News_and_Media/Magazines/Trade_Magazines/

As you go about your research, you might find yourself wondering ‘What’s the point of all this?’ This is perfectly normal, but it should not — repeat, NOT — stop you from doing the research. While the tangible value of knowing your market inside and out is not always immediately clear, you will be thankful for it when it comes time to price your product or decide on an advertising strategy. Without solid market research, you will be making these life or death business decisions on gut and impulse. This is a surefire recipe for failure.

Instead, take the time to study the journals and periodicals your industry has to offer. That way you will be making decisions based on facts instead of hopes, guesses, and wishful thinking.

Eric Corl is the Founder and CEO of Idea Buyer, a marketplace for new technology and products that allows inventors to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers at http://www.IdeaBuyer.com

You can email him at EricCorl@IdeaBuyer.com

Typically, these companies also claim that they can patent your idea, which is impossible. (Any competent patent attorney will tell you that only an invention can be patented, not a mere idea.) However, even the sharpest inventors tend to be drawn in by these seductive promises. While it might seem logical to attribute this to laziness, that does not seem to be the case. Inventing is tough, diligent work. The more likely explanation is that inventors are not familiar with the business side of patents and these companies seem like a smart way to go.

In fact, inventors with patent ideas can bypass this chump’s game and do most (if not all) of their patent sale presentations themselves. All you need is some knowledge about how companies evaluate patents and how to emphasize the benefits of yours. With that in hand, you will be primed and ready to go out and sell your patent to a buyer.

First, you need to decide how you want to sell your patent. Your two choices are to license your patent or to assign it. Essentially, licensing your patent lets you retain the underlying rights but grant someone else — the licensee — the right to make something based on the patent. In exchange, you get royalties and whatever performance obligations you write into the license agreement. Assigning a patent, on the other hand, is an outright transfer to someone else, after which that person is the sole, exclusive owner of the patent. (Read our in-depth article on patent licensing for more information on both options.)

Once you have decided whether to sell your patent via licensing or assignment, the next step is to determine which company you should be making your pitch to. For example, the inventor of a new, lighter and more durable bicycle tire might assume that he needs to talk to Wal-Mart or the Sports Authority. In reality, he wants to speak with companies like Huffy or Schwinn, ie, companies who make and manufacture bicycles. They are who would be most likely to buy your patent, since it coincides with their existing line of business. It’s what those in the business call a ‘natural fit.’

He might even want to go further down the chain and approach the company who creates bicycle tires, if this is a different company. The closer you can get to the physical implementation of your idea, the more likely it is that your presentation will be favorably received.

The reason for this is simple. The higher up you go, the more layers your idea will have to pass through until it reaches the people whose lives will be concretely affected by it. Not only that, but other people will not present your idea with the energy and enthusiasm that you will. The importance of narrowing down the list of companies to make your sales pitch to in this way cannot be stressed enough.

Once you identify the company you need to speak to, you need to work on what you will say to them. To keep our example of a new kind of bike tire; you want to emphasize to the tire manufacturer why your design of tire is superior. Beyond that, you want to demonstrate why the company needs to use your design. For instance, you might want to include in your presentation a survey where 75% of respondents said that shoddy bike tires are the reason they do not buy new bicycles. The idea is to focus on benefits to the company, rather than hype and self-promotion. This is what will make them eager to buy your patent and put it to use in their products.

Once you have prepared a clear, benefit-driven presentation, the final step is to make the pitch. Generally, you will find a business development mailing address or e-mail address on the company website. Just send them a short, to the point note saying that you have a business proposal you would like to discuss. Make sure you include enough details to get their attention, but not so much that your note becomes a novel.

Above all, maintain confidence in yourself and your patent. If you have carefully though things through, you can indeed sell your patent on terms that are favorable to you and your future prospects.

Eric Corl is the Founder and CEO of Idea Buyer, a marketplace for new technology and products that allows inventors to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers at http://www.IdeaBuyer.com

You can email him at EricCorl@IdeaBuyer.com

The first type of business plan is one you plan on showing to others. This might be so you can raise venture capital funding or get a bank loan. The second type of business plan is for yourself. It is in essence a document to keep you on track, something you can refer to in the day-to-day chaos of your operations and use to determine whether you are on target. First, let’s explore the first type.

If you are writing a business plan to obtain funding, you are essentially giving a stranger an overview of your company. This person will want to evaluate your goals, your personell, and your financial projections for the future. Therefore, these are the things you want to address and give special attention to in your business plan. At bare minimum, your business plan needs an executive summary, a marketing plan, financial projections, and a description of the personell involved. Let’s learn a little more about each phase, as each one is crucially important.

Executive Summary

The executive summary is what you might call ‘the main point.’ It is the most important part of your business plan. This is where you summarize the purpose of your company, how you will make money, in essence, what you will be going into business to do. You want to touch upon the surface of all the other categories, but without going into super-specific detail. For example, rather than naming the stores you want to sell your product in or the names of specific personell, you might say something like ‘We will utilize a robust strategy of discount store selling made possible by high-ranking personell in the retail field.’ A venture capitalist or business partner should be able to read your executive summary and come away with a broad understanding of your goals. Of course, you’ll need to firm up specifics of how your business will be run in order to provide that understanding. Therefore, it would be best to hold off on writing the executive summary until after you are down with your marketing plan, financial projections, and personell descriptions. Then you yourself will be intimately familiar with the details and in a good position to sum it all up in your executive summary.

Marketing Plan

Your marketing plan is basically how you intend to reach your customers. It is also where you define your ideal customer: say, 22-35 year old SUV driving males in the northeast with incomes of $80,000 per year or more. The person reading your marketing plan should come away knowing where your product will be sold and how. Details are crucial here. Do you know buyers at Home Depot or Wal-Mart, if that’s where you plan on selling? Will you be using Google AdWords or affiliate deals, if you will be retailing online? How much product can you afford to produce? How do you plan on keeping store shelves (or inventory) stocked? Anything related to how and at what cost your product reaches customers belongs in the market plan, spelled out in as much detail as you can go into. This will firm up your vision in the minds of anyone reading it.

Financial Projections

The number one question on the mind of any business partner is ‘How much money is going to come out of this?’ The financial projections are where you attempt to answer this question. What are your sales goals? What kind of profit margin do you expect? When do you predict the company will be profitable? Are there significant debts that need to be taken and later repaid, such as for machinery or equipment? If so, you need to factor such things into your projections. A person reading your financial projections will want to know that you have taken everything into account and produced some realistic expectations for the business.

Personell

Finally, those reading your business plan will want to know that you have competent, accomplished people working with you. In the personell section, you want to list the names, achievements, and qualifications of anyone who will be working with you. The idea is to convince the VC or partner that the personell you have chosen are suited for the tasks that lie ahead. This is especially important, given the modern trend of venture capitalists appointing their own guys to companies they fund.

The other type of business plan is the one you write for yourself; for example, if you are bootstrapping with your own funds and growing the business organically, by reinvesting profits. This type of business plan can be much more informal in nature, since you will be the only one looking at it. However, you should still be thinking about the same questions. Too many business owners lose sight of why they are in business at all, and try to be all things to all people. This does not work, and a solid business plan is a great way to keep yourself focused on what matters — on what is profitable.

Therefore, no matter how you choose to structure your business plan, it should have the following:

* Specific, numeric sales goals and time frames for achieving them.

* A list of ways you intend on marketing your product and the steps necessary to see it through

* When you expect to be profitable and why

Forcing yourself to think these things through will be an invaluable benefit as you build your company. They will give you standards to judge yourself against daily, as well as show you how to correct any mistakes you are making.

Eric Corl is the Founder and CEO of Idea Buyer, a marketplace for new technology and products that allows inventors to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers at http://www.IdeaBuyer.com

You can email him at EricCorl@IdeaBuyer.com

It is deja vu all over again, as the Supreme Court once again has agreed to review a controversial patent ruling of the Federal Circuit Court of Appeals. The issue this time: whether a patent owner’s rights were exhausted by a license agreement and subsequent sale of product pursuant to the license.

With the Supreme Court’s 2007 decisions in KSR v. Teleflex and MedImmune v. Genentech and its 2006 decision in eBay v. MercExchange, it has reshaped the landscape of patent law by rejecting the views of the Federal Circuit - the very court that was established to help bring uniformity to patent law. Now the nation’s highest court has an opportunity to do that again.

On September 25th, the court granted certiorari in Quanta Computer v. LG Electronics, which was decided by the Federal Circuit as LG Electronics v. Bizcom Electronics, 453 F.3d 1364 (Fed. Cir. 2006).

In seeking Supreme Court review, Quanta and other petitioners challenged the Federal Circuit’s application of the exhaustion doctrine - also known as the first-sale doctrine - arguing that it is at odds with nearly a century of Supreme Court precedent. LG countered that the petitioners were seeking to make a mountain out of a molehill in that the Federal Circuit’s decision turned on the case’s unique facts.

The question the court will decide, as stated by the petition for review, is this: “Whether the Federal Circuit erred by holding, in conflict with decisions of this Court and other courts of appeals, that respondent’s patent rights were not exhausted by its license agreement with Intel Corporation, and Intel’s subsequent sale of product under the license to petitioners.”

Circuit Finds Exhaustion

The case involves a series of patents that LG licensed to Intel Corp. and Intel’s subsequent sales of products to third parties pursuant to that license. LG’s patents cover various systems and methods for enhancing the operation of personal computers.

Under its license with LG, Intel was authorized to sell microprocessors and chipsets to third parties. However, it was required to notify purchasers that they were not authorized to combine the Intel products with non-Intel components. This was because LG’s patents covered not the products directly but the processes that resulted from their combination with other components.

LG sued a number of companies that purchased the Intel microprocessors and chipsets for infringement of its patents. The trial court granted summary judgment in favor of the purchasers, ruling that the licensing arrangement exhausted LG’s patent rights.

On appeal, the Federal Circuit reversed the trial court’s finding of exhaustion. Exhaustion, the court reasoned, applies only to an unconditional sale, one that exhausts the patentee’s right to control the purchaser’s subsequent use of the device. It does not apply to an expressly conditional license or sale, the court said.

Given that LG’s license to Intel carried the condition that Intel had to notify customers of its limited scope, the license was clearly conditional, the court held.

“The LGE-Intel license expressly disclaims granting a license allowing computer system manufacturers to combine Intel’s licensed parts with other non-Intel components,” the court explained. “Moreover, this conditional agreement required Intel to notify its customers of the limited scope of the license, which it did. Although Intel was free to sell its microprocessors and chipsets, those sales were conditional, and Intel’s customers were expressly prohibited from infringing LGE’s combination patents.”

Contrary to Precedent?

In asking the Supreme Court to review the Federal Circuit’s decision, Quanta and the other petitioners argued that the Federal Circuit’s application of the exhaustion doctrine was contrary to clearly established Supreme Court precedent.

“Under the patent exhaustion doctrine that this Court has applied for more than 90 years,” they wrote in their petition for review, “an authorized first sale of a patented article exhausts the patent owner’s rights in that article, and nullifies any ‘conditions’ that the patent owner has tried to attach to its use or resale.”

The Federal Circuit’s decision was in direct conflict with Supreme Court precedent, the petitioners asserted, and was “an unprecedented and extremely dangerous expansion of the patent monopoly.”

LG, in opposing the request for certiorari, argued that the petitioners were exaggerating the significance of the case.

“Petitioners strain to make a broad doctrinal issue out of a narrow case-specific ruling,” LG asserted. “The Federal Circuit … disagreed with the trial court’s case-specific assessment of the terms of dealing in this case, and returned the case to the district court for trial. … That interlocutory ruling presents no issue warranting review.”

In deciding to hear the case, the Supreme Court apparently disagreed with LG and saw grounds for review. In so doing, it has set the stage for perhaps another disruption of Federal Circuit patent law.

The court ordered briefs to be filed on an expedited schedule. As of this writing, it has not scheduled a date for oral arguments.

This article was originally published in BullsEye, a newsletter distributed by IMS Expert Services. IMS ExpertServices is the premier expert witness and litigation consultant search firm in the legal industry, focused exclusively on providing custom expert witness searches to attorneys. We are proud to be the choice of 89 of the AmLaw Top 100. To read this and other legal industry BullsEye publications, please visit IMS ExpertServices’ recent articles. Call us at 877-838-8464 or visit us at http://www.ims-expertservices.com

In today’s competitive world, technology has become the most important competitive weapon of enterprises. This weapon results from high inputs of labor, cost and infrastructure and is proprietary in nature. Acquiring competitive advantages are only possible through innovation and intelligent implementation of technology as marketable products and services.

Patents information act as bullets for these weapon. Patent information is widely being used in corporate sector for informed decision-making and decreasing the risk and uncertainty associated with Research &Development plans.

But this great source in information is not widely used by researchers and scientist in most of the research organization, especially in developing countries. Almost all research organization refers to the scientific journals and research publication as the main source of new technical information. Based on which their project plan and all other task depends. Thus, intelligent selection and prioritization of research projects, along with long term tactics framework is essential to reduce the failure risk. But these tasks are not easy, and require expertise in the following fields of technology management: technology identification, distinguish among present, part and future technology, technology forecasting, technology assessment, technology monitoring and technology mapping. This information can be further used for the formulation of technology strategy.

Patent analyzing can reveal the following information, which can be used in making strategic decision making:

• Technology trajectory to trace the evolution path of any particular technology.
• Detection of research focuses of top competitors in different technological fields and forecast their future trend
• Acquire invaluable information about past, current and future research possibility in a particular technology domain.
• Identify and monitor key competitor’s in particular technical field, to predict future research trends and identify technology gaps in new fields.
• Identification of potential licensors with technologies of interests.
• Analyzing technical and legal information of related patents, before triggering the negotiation process to transfer of given technology, can boost the bargaining power of research institutes as technology transfer.
• It can help in acquiring technical information
• Avoiding duplication of research
• At initial stages, patents analysis may help in generating ideas for new innovations.

Finally even the 18-month lag between filing and publication of patent information as well as different lifetime of patents; it is the most organized and easy accessible and freely available technological information source. Expert analysis and use of patent information can help you armed with the competitive technology to gain market supremacy.

Vinod Kumar Singh
Asst. Manager - IP Informations & Technical Writer - IP/Patent Intelligence
Dolcera Infomaxx Pvt. Ltd.
Email: vinod.patent@gmail.com
Mobile: +919392387277
My Personal Web Page
My Blog - Competitive Technical Intelligence Toolbox
Indian Patent Agent Tutorial

I have found one thing common among most Inventors. The majority are paying thousands for services they don’t need if they want a company to license their product. The Invention Submission Companies all push get a patent search done, file a provisional patent, file a full patent, do a market analysis report, have CAD drawings done. Why? Because you have to pay for these things and they provide a service doing just that.
Here are some things those sites neglected to tell you.

You can do a patent search yourself using the patent office website or Googles new patent search. The bad thing is if you don’t find anything listed it doesn’t mean a provisional patent hasn’t been filed on it. You just can’t see it. You can spend all of your money on a patent only to find out someone else has a lock on your spot. Also, you will find out that when you license your idea to a company they may want to improve on your idea or modify it in a way that your patent no longer covers the final product. So another patent has to be filed. I call this “What started out a Dog ends up a Cat syndrome” Your original patent money was wasted. I have 6 items on the market and didn’t spend a dime on the patents. The companies licensing the ideas paid for the patents out of their pockets to protect their investment. The patent covers the actual product they are producing.

A provisional patent is cheaper, but starts a 1 year clock. If you don’t get it licensed in that year you HAVE to apply for a full patent or your idea is open to anyone else that will file a patent. Once you start the full patent you are going to spend thousands to get it completed. Do you have the resources to pay for a full patent? ou are also going to wait at least a year or more before the patent is issued.

Full patents are great if you are a large company and can spend hundreds of thousands of dollars to defend your patent. The average person can not afford to go up against a Disney or Mattel sized company to fight off knockoffs. You will lose any profit you made and be in court for years. If you don’t think that is true look at all the knockoffs of patented items on the shelf right now.

A market analysis is a waste of your money unless you are planning to produce and sell the item yourself. If you do one today and you find a company to license your idea they will do their own market analysis and not take your word for it on yours. So, you are paying for something they will do anyway. In the past 5 years I have had only 1 company ask me if I had done a market analysis on that product idea. I asked if they needed me to do one. He said no, they would do their own.
Plus, how long is your market analysis good for? If it has been a year since you had one done and you still haven’t found a company to produce your product is your market analysis still valid? Can you afford to have one done every 6 months or yearly?

You don’t always need CAD drawings or some other technical engineering drawing to get a point across. If you are doing electronic circuitry or something extremely high tech it would probably be advisable. If you are producing a low tech item or board game you don’t have to be as technical. All of my drawings are two dimensional. They look professional, get the point across, are in color and have concise explanations included describing the items function and benefits.

More and more companies are open to looking at outside ideas from Inventors. They see the value of having someone outside the company look at their line and see if they can come up with something that fits. I approach companies using a nondisclosure agreement. Once we each sign the agreement I will submit my idea for review. If they are interested we will discuss royalty terms and licensing.

Since I am not having to wait on a patent I can immediately start approaching companies. This saves me a year or more in waiting to get started. Another point that you may consider is that if you approach a company with your patented idea they will normally offer between 3% and 5% royalty based on the sales. If you approach them with the same idea and it is not patented they will offer you 3% to 5% royalty. So, you are saving the cost of the patent and when you get your first royalty check it is profit, not something you are using to make back the money you spent on the patent.

If you would like to see my licensed inventions that are on the market check out my website at http://www.rogerbrown.net

Some research is required before you try to register a patent. Most countries have a patent office that issues patents and maintains a database of the patents that have already been granted. Most of the patents that are issued annually are utility patents.

There are three types of utility:

General utility is the requirement of functionality.

Specific utility is the requirement that the invention actually perform the function.

Moral, or beneficial, utility requires that the invention not “poison, promote debauchery, facilitate private assassination”.

As an inventor, you will need to do research to determine whether someone else has already patented your idea.

There are a few different ways for you to search through previous patents. You can either search through the Patent and Trademark database online or going to the library of the Patent and Trademark Office. In the United States, the patent database is available on microfiche, paper, and CD-ROM.

You can potentially save your self a lot of time by doing a quick search on the government patent website to determine if a patent already exists for your idea. This way you avoid filling out and submitting an application that will definitely be rejected. If you submit your application online as well it can help to reduce the processing time significantly. It makes it easier for the Patent Officer reviewing your application to search the database to ensure that there is not an existing patent for your product. As long as you patent is fairly easy to find, you should have no problem getting everything done online. However, if your patent is not easy to find, you should go to the closest Patent Office where someone can assist you. If the Patent Office is not located within a reasonable distance, then I would recommend requesting a list of patents to be mailed to you. Please note that there is often a fee for this service. Best of luck in all of your endeavors!

Nikki Barker writes on marketing and business related issues. You can learn more by visiting my blog,
Everything about patents!

http://gettingapatent.blogspot.com/

In today’s competitive world, keeping eagle eye on advancements in a technology domain along with the competitors activity monitoring is essential, to sustain in the market. Technology and competitive monitoring can be best achieved through patents, the largest pool of knowledge collection. Patent monitoring is regular searching the patent and non-patent literature in a technology domain of interest. The closer look over the technical and competitive activities of close competitors can provide valuable insights in making critical business decisions.

Regular monitoring is done to spot potential competitors before the have any products on the market and stay updated on developments in a certain technical area. Continual monitoring of the patenting activities in technological domains even provides information of new emerging competitors having key potential technologies. This information can be very useful in finding licensing opportunities.

There are different types of monitoring:

• New patent monitoring to a particular technology domain
• Patent activity for top companies and identification of key emerging players
• Monitoring new licensing activities
• Patent legal status monitoring
• Monitoring trends in any particular technology domain
• Inventor monitoring
• New research activities monitoring through non-patent search
• Market and business intelligence monitoring, through finding the recent acquisitions, mergers, collaborations and venture capital in the particular technology area and among key competitors

Both patents and non-patents databases contain much information, which can be used to generate actionable intelligence. Through effective search you can monitor the global technology developments, check that your own research is unique, keep track of your competitors and ensure that no-one is infringing your own patents and products. In today’s knowledge-driven economy, effective use of this information is a big contributor to the success of any company. Thus, in conclusion, monitoring of patents, non-patent and general new databases can provide highly valuable information for decision makers, and keeping themselves on the top.

Vinod Kumar Singh
Asst. Manager - IP Informations & Technical Writer - IP/Patent Intelligence
Dolcera Infomaxx Pvt. Ltd.
Email: vinod.patent@gmail.com
Mobile: +919392387277
My Personal Web Page
My Blog - Competitive Technical Intelligence Toolbox
Indian Patent Agent Tutorial

On August 21, 2007, the United States Patent and Trademark Office (USPTO) announced significant changes to the rules of practice in patent cases. The changes include the following:

• limiting the number of continuation (or continuation-in-part) applications that applicants may file per invention without justification to only two;
• tightening the definitions of continuation and divisional applications and restricting the kinds of claims that can be pursued in divisional applications;
• limiting requests for continued examination (RCEs) to one without justification;
• limiting the number of claims per application to 5 independent claims or more than 25 total claims (the “5/25” rule), unless an “examination support document” (ESD) is filed along with the application;
• redefining the relationship between individual applications in a patent application portfolio so that if one or more applications have at least one patentably indistinct claim, their claims are combined for purposes of the 5/25 rule; and increasing the duty of disclosure.

Changing Continuation Practice

The general right to claim priority to a nonprovisional application through an unlimited chain of copendencies by 35 U.S.C. § 120 appears to be abolished. The new rules limit the number of continuation (or continuation-in-part) applications that applicants may file per application without justification to only two. Additional continuation or continuation-in-part (CIP) applications require justification. The justification for additional continuation or CIP filings is made by showing why any amendment, argument, or evidence to accompany an application could not have been filed earlier.
Beyond the above mentioned two continuations, applications pending prior to August 21, 2007 in which two continuation or continuation-in-part applications have already been filed are allowed to have one additional continuation application filed without justification. This additional continuation application may be filed before or after November 1, 2007.

Changing Divisional Practice

Divisional applications may only be filed to non-elected groups of claims created when an Examiner finally restricts claims of an application. A properly filed divisional may also have two additional continuation applications filed without a justification; however, CIP applications claiming priority to a divisional application are not permitted. Further, the new rules require that greater attention be given to the labels given to each application, that is, whether an application is a continuation or a divisional. An improper divisional (e.g., an application pursuing claims rejoined after restriction) will be considered as one of the two continuation applications that is allotted for each invention.

The new rules also state that any continuing application that contains claims previously examined in any prior-filed application is not a proper divisional application. This has implications in applications in which the USPTO makes an election of species requirement. In such applications, generic claims must be prosecuted in the initial application or its two continuation or continuation-in-part applications, including exhaustion of any available appeals, before even filing a divisional application to a non-elected species. If a divisional to a non-elected species is filed earlier, the USPTO, upon allowance of a generic claim, will regard the divisional as improper for being addressed to an invention examined in a prior-filed application.

Limiting the Number of RCEs

Under the previous rules, an unlimited number of RCEs were allowed to be filed. Under the new rules, only one RCE may be filed per application and its continuation applications without justification. A proper justification requires a showing that any amendments, arguments or evidence could not have been filed earlier. Each divisional application and its accompanying continuation applications, if any, are also entitled to one RCE without justification.

Limiting a Number of Claims per Invention without Justification.

The new rules require a filing of an “examination support document” whenever an application contains or is amended to contain more than 5 independent claims or more than 25 total claims. The count of claims includes all of the claims in any other copending application with common ownership having at least one patentably indistinct claim.

An examination support document requires the following:

• a listing of the reference or references deemed most closely related to the subject matter of each of the claims;
• an identification of all of the limitations of each of the claims (whether in independent or dependent form) that are disclosed by the reference;
• a detailed explanation particularly pointing out how each of the independent claims is patentable over the cited references; and
• a showing of where each limitation of each of the claims (whether in independent or dependent form) finds support under the first paragraph of 35 U.S.C. § 112 in the written description of the specification.

Complying with these requirements will likely be very expensive for applicants. It is also quite likely that statements made in an ESD will be extensively scrutinized by patent infringement defendants in any patent issuing with an ESD in its file history. Therefore, an ESD will not be recommended in most, if not all applications. The new rules thus effectively limit the number of claims for most applications. It is important to understand how the USPTO will calculate the number of independent and dependent claims per application. The USPTO will:

• count a claim depending on a claim of a different statutory type as independent;
• count all of the claims in copending applications containing patentably indistinct claims (including applications having a continuity relationship), but not in issued patents containing patentably indistinct claims, in determining whether each such application contains more than five independent claims or more than twenty-five total claims;
• not count claims withdrawn from consideration as drawn to a nonelected invention or inventions, unless they are later reinstated or rejoined; and
• count multiple dependent claims as the number of claims from which they depend.

Importantly, the presence of even one patentably indistinct claim in two applications sharing the same ownership will cause the two applications to be treated as one application under the 5/25 rule. Thus, the two applications will be limited to 5 independent claims and/or 25 total claims. Further, applications with the same ownership, at least one common inventor, the same effective filing date and overlapping disclosure (in a sense defined precisely in the rules) will be subject to a rebuttable presumption that their claims are patentably indistinct. The presumption must be overcome to prevent the multiple applications being treated as one under the 5/25 rule.

Requiring Disclosure of Certain Copending Applications

The rules require the USPTO to be informed of applications with effective filing dates within two months of each other that have the same ownership, and one inventor in common. The rules provide that one or more other nonprovisional applications meeting the above conditions must be disclosed to the USPTO within:

(1) Four months from the actual filing date of a nonprovisional application filed under 35 U.S.C. 111(a);
(2) Four months from the date on which the national stage commenced under 35 U.S.C. 371(b) or (f) in a nonprovisional application entering the national stage from an international application under 35 U.S.C. 371; or
(3) Two months from the mailing date of the initial filing receipt in the other nonprovisional application that is required to be identified under § 1.78(f)(1)(i).

These deadlines cannot be extended. It is unclear what sanctions exist for failure to identify these other applications, other than it provides a basis for which the USPTO may make final a second office action that includes a new double patenting rejection.

Effective Date and Compliance Date

The effective date for these new rules is November 1, 2007. Most of the rules, however, have implications for currently pending applications and any new applications that may be filed before November 1, 2007.

The USPTO has also set a compliance date of February 1, 2008 for its newly required disclosures of related applications for all pending applications. Furthermore, for applications that have not received a first office action on the merits by November 1, 2007, the USPTO is expected to notify the applicants of the need to supply an examination support document, propose a restriction requirement, or amend the claims so as to not exceed the 5/25 claim threshold.

Action Needed Prior to November 1, 2007

The rules changes create one instance in which an additional action must be taken prior to November 1, 2007. For pending applications in which an RCE has been filed previously, only one RCE may be filed for each application after November 1, 2007 without a justification. This one RCE, without justification, may only be used once in each application family. Thus, for an application family in which an RCE has been filed previously, and the claims are finally rejected and may not be allowed in after final practice, a second RCE should be filed prior to November 1, 2007. Failure to file a second RCE prior to November 1, 2007 will require the applicant to submit an RCE with justification, a continuation application, or an appeal.

Consequences for Patent Application Filing Strategies

The new rules change the number of claims that can be filed in a given patent application. Now, only 5 independent claims and/or 25 total claims may be filed unless an examination support document is filed along with the application. This rule cannot be circumvented by filing multiple patent applications claiming the same invention because, as discussed above, applications filed with the same ownership and patentably indistinct claims will be considered to be the same application for the purposes of this 5/25 rule.

While only five independent and twenty-five total claims will be examined in an application, there is one way to file more than 5/25 claims initially in an application without filing an examination support document. In order to file with more than the 5/25 limit, the application must be filed with a “suggested restriction requirement,” suggesting to the examiner how the claims may be divided so that only groups of claims that comply with the 5/25 limit are examined in any one application. The applicant also selects the group of claims to be examined first. If the examiner agrees with the suggested restriction requirement, the elected group is examined in the application and the applicant may file divisional applications to pursue the groups that are withdrawn from consideration. Other strategies are available depending on the specific subject matter and prosecution strategy for each case.

Consequences in Patent Prosecution

The changes to the patent rules will make it prudent to present all necessary evidence, declarations and argument in response to the first substantive office action. Under the previous rules, which provided unlimited RCE submissions, applicants could attempt to overcome claim rejections initially by using only argument, or claim amendment, and then relying on multiple RCEs if necessary if more extensive arguments and supporting evidence (e.g., declarations) were considered necessary. Currently, as only one RCE by right is permitted in each patent application family, each office action response, especially the first response, will need to be much more comprehensive. If evidence to overcome a rejection is not used as early on in prosecution as possible, the opportunity to use such evidence may be lost.

Appeal practice will likely become much more common under the new rules. Appeal allows the ruling of the examiner to be reviewed by the Board of Patent Appeals and Interferences (BPAI) at the USPTO. Previously, most practitioners avoided the appeal process because it could take several years for the BPAI to decide an appeal. The appeal process also entails risk in that an adverse decision at the BPAI can only be appealed to the Court of Appeals for the Federal Circuit, or by filing an action in a federal district court. For these reasons, most practitioners utilized unlimited RCEs and/or continuation submissions to amend claims and argue to acquire an earlier allowance.

The USPTO has received numerous complaints about the extensive delays in the appeal process. In response, they have reduced the appeal docket so that cases may proceed through appeal more quickly. Patent term adjustment is also available so that at least some of the time lost in appeal will be regained as additional patent term. Moreover, the USPTO has added a pre-appeal process in which three senior examiners quickly review the prosecution of an application prior to appeal in order to decide more obvious disputes between the applicants and examiner.

Rules Will Require Greater Monitoring of the Patent Portfolio

The new rules require that if two patent applications with the same ownership have patentably indistinct claims, the applications will be treated as one application under the 5/25 rule. Thus, both applications must have 5 independent and/or 25 total claims in this situation. Indeed, if the applications have the same effective filing date, overlapping disclosure, one identical inventor, and the same ownership, there is a rebuttable presumption that the claims of the two applications are indistinct. In order to prevent this from happening, and possibly compromising the validity of patent claims, patent owners will generally want to ensure that the claims of different applications are patentably distinct. This can be problematic when a patent portfolio is being prosecuted by multiple practitioners.

Pending applications should be reviewed in order to ensure that the claims of the applications are patentably distinct and to determine whether there are applications with the same ownership, a common inventor, and priority dates within two months of each other. These applications should be brought to the attention of the USPTO in both applications. The USPTO must be informed of the existence of such applications after November 1, 2007, but no later than February 1, 2008.

Dr.Joseph Mani, Senior Partner of http://www.pmgip.com