By Dan Ovanezian, Bill Jacobs & Joe Kucera
This article originally was published April 9, 2019 by IAM.
Today, technology companies are conceptualizing new ideas and improving upon those ideas at a blistering pace. Previously, under the United States’ first-to-invent patent system, such companies could afford to wait until new ideas were fully implemented, with improvements and alternatives more or less fully realized, before filing corresponding patent applications to protect their ideas. However, with the adoption of the first-to-file system, enacted as part of the America Invents Act (AIA) on March 16, 2013, it became crucial for applicants to file patent applications for their inventions before competitors file potentially related applications that may be considered prior art during future prosecution. Technology spaces are becoming so crowded that inventors are independently conceptualizing new technologies within days of each other. All of this culminates in a patent landscape that not only incentivizes, but necessitates, that applicants file patent applications with the US Patent and Trademark Office (USPTO) as soon as realistically possible.
Filing patent applications with the USPTO as soon as possible often means that applicants are filing applications for inventions that are still early in the product development cycle. Advantageously, by filing applications for inventions when they are still in the conception stages, applicants are ensuring the earliest possible priority date for their ideas.
Another reason that applicants may wish to file applications early in the product development cycle is due to the desire to raise money in various funding stages. Often, investors want to see that intellectual property rights have been secured (or at least applied for) before even considering making an investment into an idea. This means that applicants, especially those in the early stages of company formation, may wish to file patent applications early on, to provide assurance to potential investors that IP rights are at least in the pending stages of protection.
A faster track
Under the Track One program, which began as part of the AIA in 2011, applicants elect to have their applications undergo an expedited prosecution process in exchange for a fee. The goal of the program is to provide a final disposition of a patent application within 12 months of Track One status being granted, but the program is currently producing final dispositions in an average of only seven months. In practice, applications filed under the Track One are being allowed in less than six months, as opposed to an average of approximately 24 months for non-Track One applications.
Filing patent applications for inventions this early on is not without certain drawbacks, however. In particular, filing patent applications in the conception stages of the product development cycle often means that functional and design improvements, as well as implementation alternatives have not yet been thoroughly explored. Applicants are often in such a hurry to file applications, that the current state of the art, including competing technologies, may not yet be fully realized or considered. This poses a potential problem, as an issued patent is generally only as good as the amount of protection it provides against competing technologies.
One way in which applicants are mitigating some of the downsides of an aggressively timed filing practice, as discussed above, is by filing continuation applications. By quickly filing a parent patent application soon after conception, and then using the time during which the parent application is pending to evaluate final product designs and competing technologies (eg to help build out a defensive portfolio), applicants may then file a continuation application to better tailor the claims of the parent patent to the design implementation of the final product.
Some applicants are combining the practice of filing continuations for the purpose of delaying prosecution with the practice of filing parent applications under the Track One program, as a way to quickly secure an issued patent for the parent application while drawing out prosecution for the continuation. Furthermore, applicants may choose to put off the filing of the continuation until just before issuance of the parent for added delay.
In many situations, applicants would like to slow the prosecution of the continuation application (eg especially if the parent was issued quickly via Track One) to provide additional time to determine final product design and evaluate competitors’ products. Delaying prosecution of continuation applications may provide a variety of advantages. For example, a final product’s implementation may be much different than the concept claimed in the parent applications (hence the continuation claims can be more tailored to match the actual product that ships).
Additionally, for licensing purposes, waiting as long as possible to craft a claim set provides an applicant time to observe how relevant products in the market take shape, thus defining a clearer target for claim sets. Furthermore, such delays may advantageously defer additional spend, to give applicants time to determine whether or not an invention becomes relevant in the marketplace before investing more funds into the application (or perhaps the applicant is a cash-strapped company, such as an early-stage start-up, and simply needs to focus limited resources elsewhere while keeping existing intellectual property on the backburner).
A little-known way, by which an applicant may slow the prosecution of a continuation application, is through the USPTO’s Deferral of Examination program. For a modest fee, an applicant may use the program to suspend prosecution of a currently pending application for as long as three years from the earliest claimed priority date of the application. This option for delayed prosecution makes it a prime candidate when an applicant wishes to slow the prosecution of a continuation application to provide additional time for product development, delayed spend, or competitor analysis.
The Deferral of Examination program was originally proposed in January 2009 when the USPTO provided notice of the program and requested feedback from the general public. Many organizations and companies weighed-in, providing support and thoughts on how it should work. One of the contemplated benefits of the program included reducing the enormous backlog at the PTO as many of the applicants using the process would be using it to provide themselves additional time, during which it could be determined whether to continue prosecution or abandon applications for potentially less important inventions. It was thought that a substantial percentage of the applicants making use of the program for this purpose would opt out of future prosecution at the expiration of the deferment.
In practice, very few applicants are opting to use the Deferral of Examination and other types of suspension, such as the Suspension of Action program, and an even fewer number of those applicants who are making use of it are using it in a continuation, continuation-in-part, or divisional application.
The program may be useful for a purpose for which it was not originally intended – to delay the prosecution in continuation applications in conjunction with receiving a quick allowance in parent applications filed under Track One. Such a use of the deferral program provides the benefit of receiving quick protection for the general concept of the invention and combines that with the ability to draw out future prosecution for as long as three years from the effective filing date of the continuation.
For example, an applicant wishing to receive the earliest possible priority date for a new invention, and also have time to determine a claim strategy based on implementation details and a competitor’s products (which may not have been fully known at the time of filing), may choose to pursue generic claims in a parent application and file a continuation application (or continuation-in-part application, or divisional application) that includes more specific claims before the parent issues, under the Deferred Examination program. In another example, an applicant may pursue more specific claims in the parent (to get a stake in the ground), and broader claims in a continuation. Both strategies can be employed to effectively use the prosecution history to steer the direction of the continuation claims. As discussed above, these strategies may be combined with the filing of the parent application under the Track One program to quickly acquire patent rights, while continuing to prosecute claims that target post-filing implementation details and competitor’s products in a continuation.
Advantageously using the Deferred Examination program in this way may potentially reduce future workload at the USPTO. For example, if a company later determines that the continuation is no longer necessary they may choose to discontinue prosecution of the continuation application, (e.g., if, for example, a product is released and the company determines that the issued claims in the parent sufficiently protect the released product) thus reducing the workload of the patent office.
So, while only a small number of applicants are currently using the Deferred Examination program for any purpose, there may be justifiable reasons to begin doing so in a continuation application (eg when the parent was filed under Track One). By filing parent applications early in the product development cycle and later filing a continuation application under the deferral program, applicants may both secure an early filing date and have additional time to develop a more specific claim strategy while advantageously deferring prosecution spend. By combining such a strategy with that of filing the parent application under the Track One program, applicants may quickly acquire the broad intellectual property rights afforded by an issued patent and at the same time slowly pursue more focused protection in a continuation.
Dan Ovanezian has 20 years of experience in intellectual property law. His practice encompasses the entire patent life cycle, including mining and identifying patentable inventions and advising patent committees, conducting training seminars in IP matters, and prosecuting patent applications with the USPTO. Ovanezian also helps companies establish patent committees and perform IP landscaping, and regularly guides startups looking to develop IP portfolios for IPOs and other exit strategies.
Bill Jacobs is an intellectual property attorney with an electrical engineering background who helps clients formulate strategies to protect and utilize their IP assets. His practice includes patent and trademark prosecution, software copyrights and licensing. He also counsels clients in patent infringement and validity matters.
Joe Kucera is Director IP Strategy at Pure Storage.