The patent prosecution highway (PPH) is a bilateral and bidirectional mechanism

A practical guide to the patent prosecution highway Fasten your seatbelts. John M Carson, Alan Kessler and Hugh Dunlop explain how the PPH works in practice, and ask which applicants will most benefit from it The patent prosecution highway (PPH) is a bilateral and bidirectional mechanism to share work generated by a first patent office with a second patent office. There is a developing set of bilateral alliances among the world s patent offices that make use of the PPH. The United States Patent and Trademark Office (USPTO) paved its first stretch of highway to the Japan Patent Office (JPO) with a trial programme in July 2006. Since then, the US PPH programme has grown to include six other trial segments linking it to the United Kingdom (UKIPO), Korea (KIPO), Canada (CIPO), Australia (IPAU), Europe (EPO), and Denmark (DKPTO). On January 3, the JPO-USPTO link became the first fully implemented programme, and since then Korea and the United Kingdom have followed suit. Without a PPH, there is substantial redundancy in the prosecution of applications filed around the world. In large part, this is the necessary outcome of inventors seeking patents in offices with different standards of patentability. Patent offices cannot grant each other s work full faith and credit, without harmonising their statutes. Even so, many aspects of the patent examination are similar enough to be shared. For instance, a large portion of a patent examiner s job is to find relevant prior art. More pragmatically, the role of a patent examiner may be characterised as a gatekeeper who repeatedly denies allowability of an applicant s claims, until the applicant has ceded claim scope that reads on the prior art. The purpose of the PPH is to reduce duplication of effort by allowing offices of second filing (OSF) to partially rely upon the work of offices of first filing (OFF) (see box on terminology). Under a PPH alliance, an OSF can save resources by using the search results of the OFF as a jumping-off point for its own patentability search. Where the patent examiner at the OSF understands the search methodologies of the OFF, this can be extremely efficient, because the second searcher only has to look at the material that is unlikely to have been considered at the OFF. Additionally, because OSFs only look at claims that have already been allowed at an OFF, their applicants have usually been through at least one round of amendments and have already yielded ground. One-minute read The patent prosecution highway consists of a series of bilateral alliances between some of the world s major patent offices, including the USPTO, EPO, JPO, UKIPO and KIPO. It is designed to minimise duplication of work by examiners by allowing offices to draw on examination conducted in another office and use it as a jumping-off point. With the first PPH programmes now more than a year old, many applicants have already experienced them. Some trends are apparent, such as the preference for the US-Europe over Europe-US route, and there are aspects that clearly need further work, such as the relationship with the PCT. In particular, for the PPH to become valuable at the EPO, ex-pct applications entering the regional phase need to be accepted. Overall, though, the PPH potentially offers substantial benefits to applicants, including faster examination and lower costs benefits that have proven particularly attractive for applicants in the computing field. Rules Not every application is eligible for entry to the US through the PPH and there are several requirements that must be met before a request may be filed. First, the US patent application must be sufficiently closely related to the application in the OFF under a multi-prong test provided by the USPTO, which is spelled out on its website. Second, the application must have at least one claim that has been determined to be allowable by the OFF. Third, each of the claims in the US application must be made to corre- PPH terminology Office of first filing (OFF): the patent office that receives the first application. Office of second filing (OSF): the patent office that reviews the allowed claims from the OFF. In this article segments in the highway are referred to as XX1 YY2, where XX is the OFF country abbreviation, and YY is the OSF country abbreviation. For example, the segment of the PPH bringing allowed claims from Japan into the United States is JP1-US2. WWW.MANAGINGIP.COM MARCH 2009 1

Figure 1: Percentage of PPH applications by technology centre 6% 18% Computers and electronics Biotechnology and organic chemistry Chemical and materials engineering 7% 2% Transportation, construction, electronic commerce, agriculture, national security, and license and review 72% 33% Mechanical engineering, manufacturing, and products and designs 13% Computer architecture, software and information security 4% 17% Networking, multiplexing, cable, and security Communications Semiconductors, electrical and optical systems and components The large majority of applications entering the PPH come from the 2100 series of technology centres (computers and electronics) Source: USPTO Figure 4: Each PPH may have asymmetric lanes from fast to less fast offices spond in scope to the allowable claims in the OFF. Fourth, examination of the US application must not have yet begun. If all of the conditions are met, the applicant may request participation in the PPH programme by filing the appropriate form with the USPTO along with the appropriate petition and petition fee for a petition to make special. With the application, the applicant must include copies of all office actions that are relevant to patentability received in the OFF. If the actions were in a foreign language, the applicant must also include Englishlanguage translations and statements of their authenticity. The applicant must also enclose a table indicating for each claim in the OSF application correspondence to an allowed claim from the OFF. Finally, the applicant must include an information disclosure statement listing all of the documents cited by the OFF. Applicants are given only two chances to meet these requirements. The USPTO will review the submission, and if it is found lacking, the applicant will be notified and will be given one final chance to bring the application into compliance. If the request is granted, the application will be treated out of turn, in advance of other earlier-filed regular applications. Once in examination, the application will be examined by a supervisory patent examiner (SPE), and will be examined for patentability with respect to all requirements of the patent statutes. Claims that are found to be allowable will be so indicated; other claims will be rejected or objected to with a written office action. In response to the office action, the applicant may make arguments and amendments as normal, with the substantial limitation that any amended claim must still correspond to one or more allowable claims from the OFF. This correspondence must be shown in a new correspondence table filed with the amendment. Any amendments that would create non-corresponding claims will not be entered and will be treated as a non-responsive reply. Implementation In the United States, each highway is negotiated by the Office of International Property Policy and Enforcement (OIPPE) at the USPTO. Since the PPH initiative began in 2006, the USPTO has been gathering statistics on its performance. According to those data, the PPH presents an extremely appealing opportunity for certain technologies. The overall allowance rate throughout the programme has been approximately 94%. According to the USPTO, this is more than double the current overall allowance rate for all utility patent applications. Throughout the USPTO, it takes an average of 3.2 to 3.4 substantive actions to reach either allowance or abandonment in the overall population of applications. Applications coming through the PPH, however, see an aver- 2 MARCH 2009 WWW.MANAGINGIP.COM

Figure 3: PPH and continuations EP application US1 application US2 application Priority claim Continuation European readers should be aware of a peculiarity in United States patent law. In the United States, an applicant may file a continuation application at any time during the pendency of an application, and may thereby seek claims of varying scope in multiple applications on essentially the same subject matter. For instance, it would be permissible for an applicant, having already nationalised a PCT application in the US to then file a continuation with a nearly identical claim set. Although the two applications would not be allowed to issue with exactly the same claims, the applicant would be free to pursue both sets of claims to the same invention either in parallel or serially. This facet of US law dramatically increases the value of the PPH, because it eliminates most of the disadvantages of using the Highway. Most significantly, the applicant does not have to choose between pursuing the narrow claims allowed by the OFF and the pursuit of broader claims. For the cost of an additional filing fee, the applicant may file a continuation of the application and use the continuation application to request entry to the PPH, while still pursuing claims of a potentially broader scope in the original US filing. The greatest strategic disadvantage to acting in this way is the risk that some statement in the Indication of allowable claim(s)(in an Office action or a positive EESR) or Grant Request for PPH An applicant may wish to take advantage of the United States generous continuation practice to prosecute the same application through the PPH and under the normal rules in order to maximise claim coverage. PPH application may carry over to related applications. However, because the claims in the PPH patent will have been pre-vetted and the amendments will be limited by the requirement to maintain corresponding claims, even this risk is negligible. age of 1.7 actions before resolution. In short, an applicant using the PPH can reasonably expect to double the chance of allowance and cut in half the number of interactions with the USPTO. These benefits are on top of the benefit of cutting to the front of the line before examination begins. As of December 31 2008, the USPTO had received a total of 980 requests to enter the PPH. Of these requests, 72% came from the computer and electronics technology centres. While the USPTO has not kept records of the type of applicants using the PPH, it is believed that the applicants making PPH requests are predominately larger companies. This may be indicative of the overall sophistication of the applicants or it could be that large companies have an easier time testing the system by cherry picking which patent applications to enter into the PPH. Analysis At first glance, the requirement that all claims filed in the application that is the subject of the PPH request correspond to allowed claims in the OFF seems daunting. By entering the PPH, the applicant takes the risk that none of the claims allowed under the OFF s patent laws and rules will be allowable according to US laws and rules. In fact, for some claims there is a legitimate risk that there will be no allowable corresponding US claim. It seems that in up to 6% of PPH applications so far, this risk has been true: no patent has been granted. Like the various other petitions to expedite prosecution in the USPTO, the PPH permits the applicant earlier examination and protection in exchange for giving up the chance to more carefully craft claim language and limit admissions in the prosecution history. In essence, from the US perspective, the applicant agrees to a smaller, predefined swath of claim scope in exchange for an earlier issuance date and reduced prosecution costs. This trade-off should be of particular interest to companies in fast-moving technologies, such as the computer and electronic industries. Similarly, companies involved in crosslicensing negotiations, particularly agreements involving large numbers of patents and products, should consider the PPH as a vehicle for perfecting rights to narrower claims that still read on the products of a competitor. It would be valuable for such companies to study the pendency times in various offices, and to plan their commute on the asymmetric highway respectively. Our view is that with respect to the PPH between the USPTO and the EPO, the US1-EP2 direction will be broader than the EP1-US2 direction for two main reasons. First, the timeframe to examine applications and obtain allowable claims in the United States is historically significantly faster than in the EPO. It is common to have claims allowed in the United States before receiving a first examination report in the counterpart EPO application. Second, the USPTO is generally far less stringent on limiting claim scope than in the EPO. To the extent that in any individual application, the EPO allows broader US-style claims to enter through the PPH, it will be of great value to applicants to attempt such an entry (EP1-US2). Global policy considerations As can be seen from the statistics above, the PPH is already showing signs of success. The fact that highways exist and are successfully conveying applications is proof that work sharing among patent offices is possible. The next major challenge for the PPH programmes, however, is to integrate into the multilateral patent system. At WIPO there is a concern that the PPH initiative threatens to undermine the PCT system, as outlined in the paper Future of the PCT by WIPO director-general Francis Gurry. WIPO s WWW.MANAGINGIP.COM MARCH 2009 3

The perspective from Europe On September 29 2008 the EPO launched its PPH pilot programme to facilitate accelerated examination of European patent applications by making use of results of examination in the USPTO. The pilot will run for one year and will explore the extent to which the two offices are duplicating each other s work. Similar bilateral arrangements are in place between the Japanese, US and UK offices, which have all extended their pilot programmes to encompass ex-pct applications. The president of the EPO says her office and the USPTO are washing each other s dirty laundry. This sounds like an unnecessary duplication of work, but might it mean that neither office is satisfied with the quality of the laundry coming out of the other office? It has been suggested that we may be entering a brave new world in which the EPO will rubber stamp the US claims for grant in Europe, but do not expect such a bold step any time soon. The present pilot is a mere toe in the water. We do not expect the EPO to draw any conclusions other than that the granted US claims are a better starting point for examination than the originally pending claims, so that part of the examination process can be leap-frogged, but that a granted US patent is not an indicator of likelihood of success before the EPO. Jumping the queue at the EPO The PPH is a mechanism for accelerated examination. Where a patent application is pending before the EPO and examination has not yet begun, and a corresponding patent has issued (or is about to issue) through the USPTO, the applicant is invited to amend the claims of the European patent application (all of the claims) to conform to claims allowed by the US patent examiner. By doing this and requesting that the application be treated in the PPH pilot, it will be moved to the top of the examination queue and examined out of turn. That is all. There can be no expectation that the claims will be treated more favourably (see below). Limited eligibility It is disappointing to report that the pilot is not open to ex-pct applications that have entered the European regional phase. This significantly cuts down the corpus of applications that are eligible. (Our research shows that only one in five European patent applications with a US priority claim proceeds direct into the EPO. Four-fifths enter via the PCT route. The split is more balanced for applications with a Japanese priority claim.) A narrow window For a given application, the window of opportunity to enter PPH may be quite narrow. The application must not be so recent that the US prosecution has not reached a successful conclusion nor so old that examination in the EPO has begun. Our recommendation is that when clients receive a notice of allowance from the USPTO, they should check the status of prosecution of the EPO patent application (this can be checked online). If examination has not yet commenced in the EPO, the window is open and PPH should be considered as an option. The window closes when the EPO examiner issues an examination report. Statistics are not available to us for US patent applications entering the EPO directly with a priority claim under the Paris Convention. If the EPO were to open the PPH to ex-pct applications, it would become meaningful. In anticipation that the EPO will do this, we analysed a sample of ex-pct applications that have entered the European regional phase with priority claims to earlier US patent applications (comprising 32 cases for which examination has been requested but no examination report has yet been received, and 32 for which examination has not yet been requested). Figure 2 shows our findings. As we look further back to older cases (to the right of the chart), there is a diminishing sample population of pending cases (because the older cases are granted, refused or abandoned). The chart shows that if the EPO were to extend the programme to ex-pct applications, there would be a certain proportion (although still not a large proportion) of applications first filed in the US between three and seven years ago that would be eligible for the programme. In our sample, US prosecution is generally ahead of EPO prosecution. (Because we selected ex-pct applications for review, examination in the USPTO was off to a head start another reason for opening the PPH up to ex-pct applications.) If an ex- PCT application has been pending in the EPO for as long as seven years, our sample indicates that it is most probable that the corresponding US patent has proceeded to grant (or, one can assume, has been refused and the corresponding EP application has been abandoned). How PPH works To take advantage of the PPH, all the claims in the EP application must sufficiently correspond or be amended to sufficiently correspond to the patentable/allowable claims in the USPTO application(s). Claims will be considered to sufficiently correspond where, accounting for differences due to claim format requirements, the claims are of the same or similar scope. A claims correspon- apparent goal is to have the world s cross-border patents prosecuted within the framework of the PCT. It seems that WIPO would like to see the PCT replace the majority, if not all, of national phase prosecution, which it views as redundant. In one scenario, WIPO foresees how the PCT could provide a virtual patent office, in which a set of examiners selected from a few offices around the world assess patentability, and perhaps issue allowances for protection in all of the PCT member states. Some members of the patent community, including some of those at WIPO, believe that the focus of the PPH programme on the results of bilateral national treatment is damaging to the goal of universally accepted patentability decisions. They see the PPH as parasitic on the multilateral PCT, which has rules overseen by WIPO, relying on the PCT s 30-month pri- 4 MARCH 2009 WWW.MANAGINGIP.COM

Figure 2: Sample of EP applications having corresponding US patents/patent applications 20 15 10 5 0 Too early (US claims not yet allowable) In the window 2006 2005 2004 2003 2002 2001 2000 Year of US filing dence table must be filed indicating how all the claims in the EP application correspond to the allowable claims in the USPTO application(s). The applicant must submit: 1) a copy of all the office actions (which are relevant to patentability) for each of the USPTO application(s) containing the allowable claims that are the basis for the request; and 2) copies of all the documents cited in the USPTO office action (and translations where necessary) except for European patents or published Europan patent applications. If these documents have already been filed in the US application before the request for participation in the PPH pilot programme, they need not be resubmitted. The applicant may simply refer to them and indicate in the request for participation in the PPH pilot programme when these documents were previously filed in the US application. Where the request for participation in the PPH pilot programme is granted, the EP application will be advanced out of turn for examination and will be processed in an accelerated manner under PACE. Is it worth it? One might say so what?. All those preconditions just to get accelerated examination, which one can request anyway, and for which there is no fee. The EPO PACE programme is not heavily utilised. It is there to permit users to jump the queue but many users are content to let examination proceed at a leisurely pace. There are a number of reasons for not hurrying. First, the applicant can delay the cost of grant. But this is much less expensive now that the London Agreement reduces the translation requirement in many of the more important states. Second, the applicant can delay prosecution pending resolution of objections in the USPTO. But that is exactly the time contemplated for this programme. As soon as the US examiner has identified allowable claims that are satisfactory to the applicant, that is the time to request PACE, and this mechanism contemplates doing so while proceeding direct to the allowable US claims as the starting point for European examination. Is there a downside? We will mention two possible downsides. 1. Perhaps broader claims are available in Europe Objections raised by the US examiner that have caused the applicant to amend before the USPTO may not be applicable in the EPO. One example is objections based on prior art under 35 USC 102(e), which is not prior art under the EPC. Another example is an obviousness objection based on combinations of US patent references. The law that governs permissible combining of references is different in the two offices. 2. File history If the EPO examiner comments negatively on the granted US claims, might this damage the credibility of the US patent? The EPO file history is readily available online, and licensees, potential licensees and litigants may be emboldend to flaunt the claims of the US patent if the European examiner rejects them. Applicants may prefer to deal with objections from the EPO examiner from the starting point of the claims of the application. If the US granted claims are the starting point, then any further comment or amendment is in addition to what is available through the USPTO file history. ority period in order to delay OSF applications until after allowance of OFF applications. Moreover, the inherent apathy toward the PCT s search results in a PPH may be viewed as both a waste of the PCT s resources and harmful to the perception of PCT examination reports as being of high quality. There is a legitimate risk that the increased usage of the PPH programme may result in increased duplication, and the loss of benefits already realized by the PCT. Despite its concerns, WIPO acknowledges that the PPH is useful as a proof of concept for offices to share work. The PPH is similar to the PCT in that both are processes of building trust and confidence of work sharing tools among patent offices. The PPH and the PCT, however, target different parts of the examination process. WWW.MANAGINGIP.COM MARCH 2009 5

Figure 5: The expanding PPH COPENHAGEN NEWPORT MUNICH* SEOUL TOKYO TORONTO WASHINGTON SINGAPORE CANBERRA permanent programmes --- pilot programmes The PCT builds trust among its member states by creating uniformity of searches among its member offices. Under the PCT, each member state becomes familiar with the work product of its partner states, and can learn to understand the quality of the searches. Over time, if the quality is high enough, the member states will learn to trust the search results, and spend less of their own time duplicating the work. Seeing these results, however, provides no insight into how those results are interpreted, and which claims are allowed. Under the PCT s top-down structure, however, member states do not have the opportunity to evaluate the claims that result from prosecution in partner states. Without such an opportunity, the member states are likely to be distrustful of other countries examination standards. For instance, a US applicant can select either the USPTO or EPO as the PCT search authority, but the EPO can only be selected as the PCT examination authority if the EPO was also selected as the PCT search authority. One school of thought holds that the PPH provides the missing element to the PCT. As the PPH trials continue, the participating patent offices will begin to understand the rigour of their partner offices examination processes, and will learn to trust their patentability decisions. Only once this trust is in place is it likely that the examination process will converge in the ways hoped for at WIPO. Towards a multilateral patent system In the short run, the PPH may not equally distribute the burdens of all patent offices. In fact, if applicants follow the practice of filing a continuation application in conjunction with a PPH request application, even more applications will be On managingip.com Hitch a ride on the patent highway (April 2008) Japan and US map new route for patents (February 2008) Trilateral offices commit to cooperate (December 2007) filed at the USPTO. However, in order to minimise redundancy and integrate the patent offices of the world, the PPH is an important next step that will hopefully aid the growth of the multilateral patent system known as the PCT. While the PPH is unlikely to provide a good replacement for methodical and incremental prosecution of patent applications in the USPTO, it is an excellent supplement for some companies. For large companies with active portfolio management and licensing programmes especially those companies for which the whole of the patent portfolio is much greater than the sum of its parts the PPH provides yet another tool in the toolbox of patent strategies. Because the prosecution phase in PPH applications is so abbreviated, companies will spend substantially less money after filing to argue the claims through allowance. By using the PPH, companies can get issued claims earlier, and use those as leverage in large cross-licensing deals. Earlier patent allowance can also lead to longer periods of recoverable damages in litigation and earlier exclusivity in the market. With proper attention to the US patent continuation practice, it is possible for companies to gain all of these benefits, with substantially no change and no risk to their tried-andtrue patent strategies. Lastly, because of relative prosecution timing considerations and liberality of breadth of claim scope, use of any particular PPH will depend on the user s direction of travel on the asymmetric highway. Comment on this article and contribute to the PPH debate at www.managingip.com/pph John M Carson Alan Kessler Hugh Dunlop John M Carson, Alan Kessler and Hugh Dunlop 2009. John M Carson is a partner and Alan Kessler is an associate in the San Diego office of Knobbe, Martens, Olson & Bear. Hugh Dunlop is a partner of RGC Jenkins in London 6 MARCH 2009 WWW.MANAGINGIP.COM