WEB PATENT NEWS--January, 2001

by Robert M. Hunter, Registered Patent Agent

News about patents, licensing and seed capital sources for inventors and innovating organizations.


I. RESPONDING TO REJECTION: HOW TO ANSWER AN OFFICE ACTION--Learn how to help your patent practitioner negotiate the intellectual property protection you deserve during the patent prosecution process.

II. SMALL BUSINESS INNOVATION RESEARCH (SBIR) PROGRAM IS REAUTHORIZED--Great news for all U.S. small business technology entrepreneurs.


Patent "prosecution" is the structured negotiation that occurs after a regular patent application is filed and before (hopefully) it issues as a patent. The focus of the negotiation is the wording of the patent claims-those numbered sentence fragments listed at the end of printed patents that delineate the boundaries of the inventor's intellectual property. The parties to the negotiation are the applicant/inventor (and his patent practitioner) and the Examiner assigned to the application by the U.S. Patent and Trademark Office (USPTO or Office).

Typically, within 14 months of the filing date, the Examiner mails a document called an "Office action" to the applicant's patent practitioner. The initial Office action is often either a requirement that the applicant elect a group of claims to be prosecuted for his filing fee or it is an "action on the merits." If election is required, the Examiner has decided that more than one "independent and distinct" invention is claimed in the application, and the applicant must choose which group of claims he wants to prosecute. For example, if the application includes claims to an "apparatus" and to a "process," and the Examiner believes that the process could be practiced with another apparatus, the applicant will be asked to elect either the apparatus or the method claims. Although the applicant can disagree with the election requirement and can (usually with little success) petition the Examiner's supervisor for its removal, election of one group of claims is mandatory. Often, responses to election requirements are handled on the telephone. It is sometimes possible to convince the Examiner to examine amended claims to the non-elected invention(s) after claims to the elected invention are allowed.

If the initial Office action is an action on the merits of the claims, the patentability battle has been joined. Because every Examiner uses a different format for his Office actions, the best approach is to read the entire action to gain an understanding of the "lay of the land." Typically, Office actions include a cover sheet that provides the "date mailed" which is the date that starts the period for reply to the action and an Office Action Summary form that sets out the period for reply (often 3 months), the status of the application and the disposition of the claims. Following the summary is the text of the action. Copies of the references (issued patents, technical publications, etc.) on which the Examiner has relied in rejecting claims are also included.

It is not unusual for an Examiner to reject all the claims in the first Office action, so do not worry if that is the case with your application. What is critical is the tone and quality of the action. If the action is written with a belligerent tone or if the action is so poorly written as to be indecipherable, trouble (a more lengthy and costly prosecution) often lies ahead. If, however, the Examiner is professional in his approach or if he suggests how claims can be amended to render them patentable, you can generally breath a sigh of relief.

In the first Office action (or any action after any new or amended claims are submitted), the Examiner will present a prima facie case that supports his rejection of any rejected claim. The term "prima facie" is a Latin word that means "on its face." It is the job of the patent practitioner to help the applicant overcome each and every argument of the Examiner and to convince him that all reasonable claims (as amended, if appropriate) are allowable. That is done by submitting arguments and/or evidence that supports the allowance of each of the claims as it exists at that point in the negotiation. Of course, if the inventor is satisfied with narrower claims (less intellectual property) than he deserves, and wishes to terminate the prosecution early for reasons of economy, that is an option, too.

There are a variety of grounds for rejecting a patent claim, and rejections are usually grouped in the Office action by ground of rejection as those grounds are expressed in the United States Code (U.S.C.). The most common grounds for rejection are inappropriate subject matter (under 35 U.S.C. 101), anticipation (lack of novelty under one of the subsections of 35 U.S.C. 102), obviousness (under 35 U.S.C. 103) and lack of distinctness/clarity (under 35 U.S.C. 112). When any of these grounds are used, the text of the code section is quoted in the Office action and an explanation of why the claim(s) are rejected under the section is provided.

An applicant's response to an Office action is called an "amendment" if it contains requested changes to the application, as is often the case. While an application cannot be amended in a way that adds "new matter" to the application, the specification and drawings can be amended, for example, to correct typographic errors. More importantly, the claims can be canceled, amended or added to broaden or narrow the scope of the claims, i.e., in order to render them patentable (a condition that is called "allowed" during patent prosecution).

It is important that each amendment respond to each and every issue brought up by the Examiner. If an applicant does not state his disagreement with an assertion by the Examiner (by "traversing" the requirement, rejection, etc.), the Examiner and any court reviewing the case in the future are allowed to assume that the applicant agreed with the assertion, so the importance of thoroughness in an amendment is paramount. That said, if it is possible to use a few, carefully-chosen words to explain that a claim amendment, or even better, to explain that the amendment was not motivated by patentability concerns, such an approach should be taken. This is important because admissions present in the record can be used against the patentee (years later), in effect, to narrow his claims during patent infringement/patent invalidity lawsuits. Even silent acquiescence, e.g., "giving up" on a claim, can be used against a patentee later, so it is important that the inventor understand and participate in all prosecution decisions. A recent decision by the Court of Appeals for the Federal Circuit, entitled Festo Corporation v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., No. 95-1006, 2000 WL 1753646 (Fed. Cir. Nov. 29, 2000) is a "must read" for all those want to understand the implications of claim amendments.

It is also important to use non-threatening and respectful language in amendments to allow the Examiner to "save face" and change his mind about the allowability of claims, e.g., note how the first letter of the word "Examiner" is always capitalized. It is often politic to conduct a prearranged telephone or face-to-face "interview" with the Examiner to facilitate the negotiation process in a way that leaves less of a "paper trail."

Current USPTO rules allow the Examiner to make the second Office action on the merits "final" under most situations. Thus, after receipt of an Office action containing final rejections, the claims can be added or amended only if the Examiner acquiesces to the changes (typically because you are giving in to his point of view.) That means the applicant has only one opportunity to freely amend or add claims, and that opportunity must not be wasted.

If, however, the Examiner and the applicant are unable to reach an agreement and the applicant is still convinced of the patentability of this invention, the applicant can pay a fee to the USPTO (and to his practitioner) and file an appeal. During the appeal process, a Board of experienced Examiners decides whether the claims under appeal are patentable. The only recourse to an adverse decision by the Board is an appeal to the courts, which, under changes brought about by the U.S. Supreme Court decision entitled Dickenson v. Zurko, 119 S. Ct. 1816 (1999), is not likely to succeed. For this reason, every effort should be made to reach agreement with the Examiner if it is at all possible, and to appeal rejected claims (preferably unamended claims) to the Board, if it is not.

Applicants should be aware that Examiners are rewarded with promotions and bonuses based on productivity quotas as measured by "counts" (known colloquially as "beans"). The Examiner receives one bean when he mails the first Office action in a case and a second bean when either the applicant gives up and abandons the application or the Examiner gives up and allows the application. While no Examiner likes to be mentioned (or for his boss to be mentioned) in, for example, the Wall Street Journal for having allowed clearly unpatentable and invalid claims in error, it is unfortunately the case that examination quality often "takes a back seat" to examination quantity.

In this regard, some Examiners like to play games by manipulating the productivity quota system. An example of such a game is called the "Triple Play." In this game, an understanding is developed between the Examiner and the applicant that, if the applicant abandons his "parent" application after a second Office action and files a continuing application with slightly different claims (and pays another filing fee), the Examiner will allow the new claims in a first action allowance (thus generating four beans for the Examiner who has only allowed 50 percent of the applications filed by the inventor and has only had to prepare three Office actions). This can be a perverse kind of "win-win" situation for the Examiner and the applicant (at least over the short term), but overall the patent system loses. Of course, if the patent is litigated, the applicant will lose, too, if he has been issued a patent containing invalid claims.

Games aside, prosecution of patent applications can be fun. I am often asked by inventors to prosecute applications that have been filed by others. There is nothing more enjoyable than convincing a competent and diligent Examiner to allow broad patent claims to an applicant who deserves them.


On December 21, 2000, President Clinton signed H.R. 4577, the Consolidated Appropriations Act 2001, which reauthorized the Small Business Innovation Research (SBIR) program for another eight years (until September 30, 2008). The $1+ billion SBIR program is an excellent source of seed capital for small businesses that are developing new technologies that address national needs. The bill also authorized $10 million for each of the next five years for the Small Business Administration (SBA) to fund mentoring and technology assistance outreach programs.

The mentoring portion is designed to help companies become successful SBIR awardees, and the Federal and State Technology Partnership Program (FAST program) is meant to foster the development of more high-technology businesses in those States participating in the program. FAST awards may have a duration of up to five years and have matching requirements that vary as a function of the success rate of applicants in the State. Only one FAST award may be made per State. The rural SBIR outreach program begun two years ago was also reauthorized until fiscal year 2005. By reference to committee reports, the bill actually appropriated $3.5 million for the FAST program and $1.5 million for the rural SBIR outreach program.

The Small Business Technology Transfer (STTR) program will sunset on September 30, 2001 unless it is reauthorized. The STTR program is similar to the SBIR program, but is smaller in size and allows greater participation of a non-profit research institution, e.g., a university or a Federal laboratory, in the funded research project.

Robert M. (Bob) Hunter, Ph.D.
Licensed Professional Engineer
Registered Patent Agent
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