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Clients unfamiliar with patent prosecution are often surprised to learn that few patent applications receive a first-action allowance, or FAA. There are even rankings of law firms that receive the most FAAs each year. But what does an FAA signify? Is it a cause to celebrate, or to conduct a post-mortem? The answer is, of course, “it depends.” This article examines an FAA’s impact on patent validity and claim scope, as well as important considerations when negotiating an FAA with the patent examiner.

MITIGATING THE RISK OF INVALIDITY

Every examiner is required to conduct “a careful and comprehensive [prior art] search,” per the Manual of Patent Examining Procedure. However, prior art searches can vary widely among examiners. Additionally, an FAA is more likely to be received from a primary examiner, for multiple reasons. First, production is a critical performance measure for all examiners, with primary examiners having the highest production requirements. Second, primary examiners unilaterally allow their own applications, due to their signatory authority. Third, an FAA results in two full “counts” for all examiners, which helps them meet their continuous production requirement. An FAA provides the greatest amount of credit an examiner can receive for a single office action. Although this last reason applies to all examiners, lower-level examiners face an extra, often difficult hurdle. They must obtain the signature of a primary examiner or a supervisory patent examiner for every allowance. In contrast, primary examiners are uniquely situated and incentivized to issue more FAAs than other examiners, given their high production requirements and the means to easily issue them.

Upon receipt of an FAA, the examiner’s search history warrants careful scrutiny. The first place to check in the notice of allowance is the attached search history from Examiner Automated Search Tool (EAST) or Web-based Examiner Search Tool (WEST). How many queries were performed? What are their timestamps? Did the search take 15 minutes or three hours? How many class/subclass searches were performed? For example, if a subclass listed 2,000 results, was another query performed five minutes later? If so, it is highly unlikely that all the references in that subclass were actually considered.

The attached search notes should also be checked. Were other sources such as Google Patents searched? Was any searching conducted for nonpatent literature? Did the examiner utilize a Scientific and Technical Information Center searcher? Did the examiner discuss any references in the reasons for allowance? Was there any explanation of how the claims distinguish them? An incomplete examiner’s search can invite a validity challenge if the best prior art was never discovered and considered by the examiner.

Practitioners can mitigate this risk by having a prior art search performed and submitting an information disclosure statement, or IDS. Applicants and their representatives have a duty to disclose “all information known to be material to patentability,” per 37 CFR § 1.56(a). Yet an IDS is not required, and applicants are under no obligation to conduct their own prior art search. Even without facing an assertion of inequitable conduct, the resulting patent may still be more vulnerable, due to prior art that could have been considered by the examiner during prosecution.

Under 35 USC Section 282, patents are entitled to a rebuttable presumption of validity, as in Chore-Time Equipment v. Cumberland, 713 F.2d 774, 780 (Fed. Cir. 1983) . Those seeking to invalidate a patent bear the burden of persuasion, by clear and convincing evidence, as in Microsoft v. i4i Limited Partnership, 131 S. Ct. 2238, 2245- 46 (2011). For art-based grounds of patent invalidity under 35 USC Sections 102 and 103, the standard of review remains clear and convincing evidence, regardless of whether a reference was considered during the prosecution of the patent.

Nevertheless, utilizing references not considered during prosecution can enhance the challenger’s ability to meet its burden to invalidate the patent. Evidence not considered during prosecution does not alter the level of persuasion required to invalidate a patent, but rather can make it easier to satisfy that level. The value of having prior art considered by the United States Patent and Trademark Office should not be ignored. When asserting an invalidity defense, the “burden is especially difficult when the prior art was before the PTO examiner during prosecution of the application,” as the court held in Hewlett-Packard v. Bausch & Lomb, 909 F.2d 1464, 1467 (Fed. Cir. 1990). The U.S. Court of Appeals for the Federal Circuit recently reiterated this point, that “whether a reference was before the PTO goes to the weight of the evidence,” in Sciele Pharma v. Lupin Limited, 684 F.3d 1253, 1260-1261 (Fed. Cir. 2012).

Therefore, it is in the applicant’s interest to have the most pertinent references that they can find considered by the examiner. The seemingly welcome news of an FAA can be fleeting if the examiner’s search was limited. Fortunately, the USPTO has instituted a Quick Path Information Disclosure Statement (QPIDS) pilot program in compliance with 37 CFR Section 1.313(c). Even an applicant that has already paid its issue fee can petition to withdraw its application from allowance and file a QPIDS to have its IDS (up to 10 references) considered as a conditional request for continued examination. A QPIDS is only converted to an actual request for continued examination where a reference is indicated by the examiner to affect patentability, and thus necessitates reopening prosecution.

PREEMPTIVE SURRENDER

A practitioner’s claim drafting also directly impacts the odds of receiving an FAA. The likelihood of original claims having perfect scope tends to decrease the less familiar the practitioner is with the art. Particularly in less familiar arts, an FAA likely means the claims were drafted too narrowly at the outset, and that broader protection was possible. This is not to disparage the time and money an FAA saves by avoiding further prosecution. Drafting narrow claims to achieve an FAA can be a strategic move to achieve a lesser degree of protection more quickly. This can be especially true when combined with track one prioritized examination, accelerated examination or the Patent Prosecution Highway. A client may need a patent quickly, and may intend to pursue broader claims in a continuation. Time or budget could also be factors. In any case, if an analysis of the known prior art from the FAA indicates that broader claims could have been obtained, then a client may want to pursue a continuation having broader claims.

An important caveat applies to this continuation approach when utilizing a nonpublication strategy. A quickly obtained, narrow patent may not adequately protect the invention once it is disclosed. This can prematurely expose the specification to the public and competitors well before broader claims can be obtained. This approach will also reveal the contents of the file wrappers of all parent applications on Public PAIR, including all provisional and abandoned applications in the priority chain. Additionally, the application numbers of any continuations will also be revealed.

DEAL OR NO DEAL?

A variation occurs when the examiner initiates negotiations prior to a first action. The examiner may propose amendments to immediately allow the application via an examiner’s amendment. On one hand, this approach can be used to efficiently address Section 101 and 112 rejections, as well as objections, to preempt an ex parte Quayle office action. Such amendments can often be quickly agreed upon in a straightforward manner. On the other hand, a proposed narrowing amendment based upon Sections 102 and 103 is a more complex issue. Common proposals from examiners include rolling up an allowable dependent claim, narrowing a broader independent claim to match the scope of a narrower independent claim, or importing a limitation from the specification.

In this situation, ask whether the examiner has any prior art to justify narrowing the claims. Examiners typically become quite knowledgeable over time about the art they examine. They may make general statements that a narrowing amendment is warranted by what is well known in the art. An unsubstantiated assertion that something is generally known should not, by itself, warrant a narrowing amendment. An FAA can result in savings of time and money. Yet amending around “phantom” prior art can come at the cost of unnecessarily surrendering claim scope to assert literal infringement, and, further, losing the use of the doctrine of equivalents in litigation due to prosecution history estoppel, as in Festo v Shoketsu Kinzoku Kogyo Kabushiki, 535 U.S. 722 (2002). These tradeoffs demand careful consideration before accepting such an offer from the examiner.

In summary, examiners can increase the likelihood of an FAA due to the scope of their prior art searches or through proactive negotiations (prior to a first action). At the same time, practitioners directly influence FAA likelihood through claim scope and by conducting their own prior art search. An FAA should be carefully analyzed for both the benefits and liabilities it can create.

BRYAN WALKER is an associate in the intellectual property group at MacDonald, Illig, Jones & Britton. He was previously a patent examiner at the United States Patent and Trademark Office, where he attained the senior level of GS-13.