USPTO Publishes Regulatory Flexibility Analysis of Markush Limitation Proposal

In August 2007, the United States Patent and Trademark Office (Office) published a notice proposing to revise the rules of practice pertaining to any claim using alternative language to claim two or more independent and distinct inventions (Alternative Claims Notice of Proposed Rule Making). The Office has now prepared an initial regulatory flexibility analysis (IRFA) on that proposed change to the rules of practice and is requesting public comment.

In particular, the Office is soliciting information on the following:

1. Alternative approaches that would reduce the burden of the rule for small entities while meeting the Office's objectives.
2. The costs of modifying an application that already is under review as needed to comply with the rule: a. The cost of filing one or more divisional applications. b. The cost of correcting a claim that is in an improper format, and factors that might cause this cost to vary.
3. The number of patent applications submitted by unique small entities per year (or per decade).
4. Factors that influence an applicant's decision to file divisional applications.
5. Issues that might affect the combined impact of alternative language that requires intra-claim restriction and is of an improper format.
6. The extent to which applicants will adjust to the new rules over time, such that future initial patent applications containing alternative language will comply with the proposed rule (i.e., the applications will not need to incur the cost of amendments or divisional applications due to alternative language that is of an improper format or requires intra-claim restriction).
7. The benefits of the rule making.
8. Other information related to this Initial Regulatory Flexibility Analysis, including any assumptions or findings stated above.

According to the IFRA,

The Office is proposing to revise the rules of practice pertaining to any claim using alternative language because patent applicants sometimes use Markush or other alternative formats to claim two or more independent and distinct inventions and/or to recite hundreds, if not thousands, of alternative embodiments in one claim. Such claims are confusing, difficult to understand, and frequently border on being unmanageable. Proper search of such complex claims, particularly those using Markush language, often consume a disproportionate amount of Office resources as compared to other types of claims. The prosecution of these complex claims likewise often requires separate examination and patentability determinations for each of the alternatives within the claim, e.g., if the alternatives raise separate prior art, enablement, or utility issues. Furthermore, the variety and frequency of alternatives recited in claims filed in applications pending before the Office, driven in part by trends in emerging technologies, have exacerbated problems with pendency. See Examination of Patent Applications That Include Claims Containing Alternative Language, 72 FR at 44992-97.

. . . The proposed rule could potentially impact applicants in two ways. First, it would require that a claim must be limited to a single invention. Consequently, if a submitted application contains a single claim that defines multiple independent and distinct inventions, then the examiner may apply a restriction requirement. See Examination of Patent Applications That Include Claims Containing Alternative Language, 72 FR at 44995. In this case of an intra-claim restriction, applicants who wish to pursue patent protection for the full scope covered by their initial application would have to file a divisional application for each additional invention defined in that original claim. For example, if a single claim contains three independent and distinct inventions and the Office requires restriction, the applicant could file two divisional applications to prosecute the full scope of the original claims. Alternatively, the applicant could elect not to file any divisional applications, in which case he or she would be limited to the one invention elected in the initial application.

To estimate the costs of one divisional application, the Office is using unit cost data from the American Intellectual Property Law Association (AIPLA) Report of the Economic Survey \2\ and the Office fee schedule for fiscal year 2007. Based on these data, the Office estimates that the cost of filing one divisional application is $10,258 (expressed in present value terms using a 7 percent discount rate). The cost
faced by applicants could be greater than this amount if the applicant files more than one divisional.

. . . Second, the proposed rule allows examiners to require applicants to simplify the presentation of claims with alternative language so that:[[Page 12682]]

1. The number and presentation of alternatives in a single claim are not
   difficult to construe.
2. No alternative is itself defined as a set of further alternatives within the claim.
3. No alternative is encompassed by any other alternative within a list of alternatives unless there is no other practical way to define the invention.
4. All alternatives are substitutable for each other. See Examination of Patent Applications That Include Claims Containing Alternative Language, 72 FR at 44996.

Consequently, if an examiner determines that a claim does not comply with one or more of the format requirements listed above, the applicant can be required to correct the claim. The applicant would provide this correction to the claim by submitting an amendment to the application.

To estimate the cost of amending an application in order to correct the format of the claim(s), the Office is using unit cost data on amendments from the AIPLA Report of the Economic Survey.\3\ Based on the AIPLA data, the Office estimates that the cost of filing one amendment to correct the format of the claim(s) is $4,029 (expressed in present value terms using a 7 percent discount rate). The cost faced by applicants could be less than or greater than this amount, depending on how difficult it is to correct the format of the claim(s).

. . . the Office believes that an applicant would need to file at most approximately seven divisional applications following an examiner's restriction requirement, even if more were needed to seek patent protection for the full scope of the originally claimed inventions.\4\ Therefore, while the cost impact of intra-claim restrictions could be as low as zero for applicants that elect not to maintain scope, it could range as high as the cost of seven divisional applications (present value of approximately $42,000). However, the Office believes these applications are relatively few in number and the impact for most applicants will be far less.