TABLE OF CONTENTS I. INTRODUCTION 2 II. THE PRACTICE OF AMENDING PATENT CLAIMS 8 A. Patent Claiming 8 B. Claim Amendments During Patent Examination 9 C. The Development of Post-Issuance Claim Amendments 11 1. Reissue 12 2. Continuation 13 3. Post-Issuance Patent Office Invalidity Proceedings 15 a. Reexamination 15 b. AIA Proceedings 16 D. Claim Amendments as an Optional Design Choice 17 III. EVALUATING EXAMINATION CLAIM AMENDMENTS 20 A. The Trade-Off Between Innovation Incentives and Monopoly Costs 20 B. Public Notice and Reliance Interests 23 C. Administrative Costs and Complications 25 D. Drafting Incentives, Examination Incentives, and Strategic Behavior 27 E. Weighing the Costs and Benefits of Claim Amendments During Examination 31 IV. EVALUATING POST-ISSUANCE CLAIM AMENDMENTS 35 A. The Trade-Off Between Innovation Incentives and Monopoly Costs 36 B. Public Notice and Reliance Interests 38 C. Administrative Costs and Complications 41 D. Drafting Incentives, Enforcement Incentives, and Strategic Behavior 42 E. Weighing the Costs and Benefits of Post-Issuance Claim Amendments 44 V. THE POLICY OF CLAIM AMENDMENTS 46 A. Examination Claim Amendments as a Policy Lever 47 1. The Relevance of the Long-Standing Liberal Approach to Examination Amendments 47 2. Claim Amendments as a Tool for Addressing Patent Quality Concerns 49 B. Reconsidering the Debate over Claim Amendments in Post-Issuance Invalidity Proceedings 51 1. The Polarized Debate over Claim Amendments in AIA Proceedings 51 2. The Administrative Legitimacy Case Against Unduly Restricting Claim Amendments in Post-Issuance Invalidity Proceedings 53 C. Discretionary Post-Issuance Claim Amendments 58 1. The Appeal of Discretionary Post-Issuance Claim Amendments 58 2. The Movement for Greater Discretion in the Patent System 60 3. The Advantages of Post-Issuance Claim Amendments as a Discretionary Tool in the Patent System 62 VI. CONCLUSION 65 I. INTRODUCTION
Patent claim amendments have been a largely uncontroversial part of the patent system since 1836. Amendments allow a patent applicant or patent owner to alter its claims--the short summaries of the invention at the end of the patent that define the exclusive rights of the holder--from those first sought from, or issued by, the United States Patent and Trademark Office ("Patent Office"). A liberal approach to claim amendments has long been assumed to be a desirable part of the patent system, at least for amendments that occur before patent issuance or narrow the patent owner's exclusive rights (normally due to concern that the patent claimed more than statutorily permitted). (1)
Two developments have unsettled this status quo in recent years. First, and most prominently, after the America Invents Act of 2011 ("AIA") (2) created new post-issuance proceedings to review and cancel issued patents that fail the requisite statutory criteria, the Patent office made it virtually impossible to amend claims in these proceedings. (3) The Patent Office's highly restrictive approach fueled both policy (4) and constitutional (5) challenges to these new proceedings. A statutory challenge to the amendment practice deeply fractured the en banc Federal Circuit in Aqua Products, Inc. v. Matal. (6) In two separate majorities, the Federal Circuit struck down the Patent Office's restrictive approach but found that such an approach would be permissible and entitled to administrative deference if properly promulgated. (7)
Second, many commentators are concerned about the quality of issued patents, which are often seen as claiming too broadly or too vaguely. (8) Searching for leverage to encourage patent owners to draft more responsibly, a few commentators have turned to claim amendments. Their proposals vary but share the common goal of restricting or penalizing claim amendments to discourage patent owners from drafting overbroad or vague claims. (9)
Even as claim amendments move from background assumption to debated policy issue, little serious work exists evaluating the desirability of claim amendments either during examination or post-issuance--what benefits they provide at what cost and whether and to what extent claim amendments are socially optimal. (10) Given their historical pedigree, examination claim amendments are normally assumed to be necessary or inherent to the process of patent examination. (11) Even those who advocate restricting claim amendments to improve patent quality tend to narrowly focus on the benefits for patent quality, without conducting an overall evaluation of social desirability. (12) Likewise, the five opinions and seventy-seven pages of Aqua Products focused on narrow questions of statutory interpretation and administrative deference, with only passing reference to the policy justifications for post-issuance claim amendments. (13) Proponents of post-issuance claim amendments tend to make conclusory assertions of the clear social benefit from preserving the patent owner's rights while narrowing the restrictions on the public. (14) Conversely, opponents tend to make generalized arguments about the undesirability of making ultimate invalidation of a claim more difficult. (15) This Article provides the comprehensive evaluation of patent claim amendments, both during examination and post-issuance, missing from the literature. The results are mixed and are unlikely to completely satisfy either side of current policy debates over the patent system generally, and claim amendments specifically. (16)
Examination claim amendments rest on weaker foundations than their long-standing and widespread acceptance would suggest. (17) On the one hand, examination amendments help protect the basic incentives to innovate, disclose, and commercialize at the heart of the patent system by allowing the inventor to still obtain effective patent protection even when the initial claims are rejected as claiming more than allowed or are insufficient to protect the full scope of the invention. On the other hand, examination amendments may be duplicative of the other tools patentees have to protect their legitimate claim scope and create undesirable incentives for patent owners to draft the type of vague and broad claims most beneficial to themselves but most problematic for patent quality.
Post-issuance claim amendments raise greater concerns about notice and the reliance interests of competitors and about strategic amendments designed specifically to capture competitor's products or to prevail in litigation. They may also be less necessary to protect innovation incentives because the patent owner has already enjoyed a period of exclusivity. on the other hand, the extent to which competitors are relying on claim language is uncertain, and accused infringers themselves have incentives and opportunities to attack and create problems with even meritorious patents. Moreover, patent owners that have invested or made business decisions based on patent protection have their own legitimate reliance concerns. In sum, the justifications for post-issuance claim amendments are, at most, different in degree, not different in kind, from examination amendments. (18)
Finding the social desirability of claim amendments ambiguous is superficially unsatisfying. But it has important policy implications. Any normative conclusion about claim amendments depends on where the risk of error should lie: denying warranted amendments through a restrictive approach would undermine inventor incentives, yet allowing unwarranted amendments through a liberal approach would interfere with legitimate competition and follow-on innovation. (19) Assigning this risk of error, in turn, depends on the "careful balance between the need to promote innovation and the recognition that imitation and refinement through imitation are both necessary to invention itself and the very life-blood of a competitive economy" that is Congress's primary objective in designing the patent laws. (20) Commentators strenuously debate the normative questions surrounding this balance, including whether (and to what extent) patent protection is needed to incentivize inventors, whether strong patent rights that maximize protection for inventors or weaker patent rights that permit greater competition and follow-on innovation are optimal, and whether the status quo currently favors patent owners or accused infringers. (21)
For this reason, examination amendments are a potentially useful, though long overlooked, tool for Congress to implement policy choices about the fundamental balance of the patent system. (22) To be clear, Congress is not limited to either maintaining the liberal status quo towards examination amendments or suddenly abolishing them after nearly two hundred years. A variety of middle ground possibilities exist, such as altering fee structures, changing presumptions of the permissibility of amendments, or requiring greater showings that amendments are warranted. In this regard, this Article provides the theoretical foundation for restricting or penalizing claim amendments as a means of addressing concerns with patent quality, as a few commentators have recently proposed, (23) though without reaching a definitive conclusion that this should be done.
Turning to post-issuance amendments, in light of the statutory ambiguity found by the Federal Circuit in Aqua Products, the procedural nature of the amendment issue, and the uncertainty about the social desirability of post-issuance claim amendments, any approach adopted by the Patent Office would be reasonable and therefore entitled to administrative deference. (24) Thus, the Patent Office could restrict claim amendments in post-issuance invalidity proceedings. But that does not necessarily mean that the Patent Office should. The statutory text and legislative history of the AIA, the ambiguity in the social optimality of claim amendments, and the historically limited role of the Patent Office all suggest that Congress...