The PTO appears to be moving doggedly ahead with its proposed continuation rules to limit the number of continuation applications by rulemaking without statutory reform. This promises to subject the agency to unprecedented criticism from the practicing bar and key industry segments, particularly biotechnology.

Clearly, the major source of continuation abuse is an internal Office problem caused by production incentives to both examiners and lower level management. They receive cash bonuses, promotions and/or job retention by gaining multiple credits for disposing of a case through refilings – whether continuation, divisional or otherwise. Without reform of this major problem any rulemaking will merely shift the focus on refilings to sham restriction requirements to require further divisional applications plus new forms of gamesmanship as yet unforeseen as examiners are hard pressed to meet their disposal requirements, particularly in biotechnology and other high technology areas.

(1) Federal Circuit Position on Continuation Practice: While there is widespread support in many circles for continuation reform, to follow the rule of law and avoid protracted litigation, a statutory reform is needed. Federal Circuit Judge designate Kimberly Moore in a 2004 paper has suggested that such a statutory change is necessary to limit continuation applications (see Judge designate Moore's Statement, below). Meanwhile, the Chief Judge in his plenary remarks in Paris last month said that "continuation application practice needs to be curtailed." (see The Chief Judge's Paris Speech, below).

(2) $$$ for Examiners and the Real Solution – Internal PTO Reform: The PTO could instantly cure the bulk of its continuation problem by measuring production on the basis of net disposals of original filings – eliminating any credits for refilings whether continuation, divisional or otherwise. This would have examiners issuing concise actions that would seek to identify patentable subject matter at the earliest possibility, refrain from trivial denials of broad claims that often force refilings and, overall, totally switch the modus operandi for patent procurement.

There is what is hoped to be only a very small minority of examiners who completely game the system by systematic coercion of refilings to artificially swell their disposal counts and thereby obtain cash bonuses at the end of the year – running into thousands of dollars. An internal investigation should commence forthwith at the extreme end of the bell shaped curve to determine whether there is any sanction that is appropriate in such situations: Manipulation of the system against established rules through sham actions in order to gain thousands of dollars in unearned bonuses should be addressed.

Judge designate Moore's Statement: "Limiting the number of continuations that can be filed may require an act of Congress. In In re Henriksen the PTO sought to preclude applicants from filing more than three continuation applications in any one prosecution. The Court of Customs and Patent Appeals, the Federal Circuit's predecessor court, struck down the PTO regulation, concluding that § 120 by its terms did not impose any limit on the number of continuations and that whether there should be such limits 'is for Congress to decide.'" Mark A. Lemley & Kimberly A. Moore, Ending Abuse of Patent Continuations 84 B.U. L. Rev. 63, 107 (2004)(footnotes omitted citing and quoting In re Henriksen, 399 F.2d 253, 262 (C.C.P.A. 1968)).

The Chief Judge's Paris Speech: "[C]ontinuation application practice needs to be curtailed. Perhaps patent offices should only allow two 'child' applications per 'parent.' Perhaps only one 'grandchild' application should be permitted. American continuation practice and abuses such as 'submarine' patents that appear many years, even decades, after the initial filing must be curtailed. The problem will persist even with publication of the application after 18 months. The use of prosecution laches estoppels to invalidate such claims, while a useful recent development in America, may not alone be adequate." Hon. Paul Michel, Optimizing Balances between Patentees and Rivals, plenary address on May 23, 2006, to the FICPI World Congress, Paris.