The savvy patent practitioner will tell you that it is difficult to predict which type of patent will be really valuable, so it is best to draft and prosecute every application with utmost care, as if it were the most valuable. But budgets for many patent applications, especially defensive applications for companies amassing patent arsenals, have been capped and fixed. With these incentives, often times applicants end up pursuing a strategy that sacrifices valuable claims for a quick Notice of Allowance.
Such a tradeoff may very well be justified, but do some prosecution strategies preserve high value while balancing other competing factors? Here, we propose that appeals may be such a strategy that can result in a higher-valued eventual patent.
A recent paper noted that going through the USPTO appeals process during examination is associated with a nearly 50-percent increase in the odds that the resulting patent will be litigated. See Alan C. Marco and Richard D. Miller, “Patent Examination Quality and Litigation: Is There a Link?”, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2995698 (June 2017). This is important because it is well known that patents that are litigated are more valuable. (Cooter and Rubinfeld, 1989; Lanjouw and Schankerman, 1997; Lerner 2008). Why might appealing an application lead to a more valuable patent? We discuss three possible explanations.
Appealed claims lead to broader claims?
A first explanation relates to the breadth of the patent claims and the incentives for the patent being pursued. While difficult to empirically prove, it is expected that patents with broader claim scope are more likely to be litigated (Lanjouw and Schankerman, 1997). Appealing an application to allowance could result in broader claims than pursuing rounds of narrowing claim amendments because it is possible that some claim amendments that the examiner asserts are needed in fact are not needed by the Board to get an allowed case.
When a patent is being planned to be used (especially offensively), having this breadth can be a critical reason for having the patent at all. And one important way that such breadth can be preserved is by fighting for it through an appeal rather than settling for claim amendments.
Board stamp of approval means less likely invalid patent?
An explanation proposed by Marco and Miller is that an eventual patent is more valuable as a direct result of appealing. Under this theory, by virtue of the PTAB judges scrutinizing the patent application during prosecution, the later patentee is emboldened in thinking that the patent is much less likely to be invalidated by the courts.
This explanation is possible, especially because PTAB judges are technically- and legally-trained and could very well serve as a strengthener of patent applications. However, it seems simplistic to think that just because the PTAB has reviewed a particular set of rejections being appealed, that the patent is somehow protected–especially as many judges only decide the merits of the appealed rejection. Further research investigating this theory is needed.
Correlation not causation?
A third explanation relates to higher value patents merely being correlated with the appeal process. Here, applicants with higher value applications may happen to pursue appeals as a strategy more often than other applicants. This may be due to exhausting other prosecution procedures and resorting to appealing as a last resort. Or it could be due to applicants with high value inventions having counsel that is more sophisticated and more likely to propose and succeed on appeal.
If a valuable patent is on the menu, do not discount appealing rejections in the prosecution of your application. You may find that you don’t have to go for the Examiner’s head-fake all the time. Instead, you might get better claims.