Legislative interest in the patent system has been evidenced by substantial discussion of omnibus reform bills. Some of the reforms considered in the 110 th Congress, but ultimately not enacted, would have impacted the United States Patent and Trademark Office (USPTO). Among these proposals are the adoption of patent opposition proceedings, changes to the rules governing the publication of pending patent applications, and third party submission of information to the USPTO that may be pertinent to the decisions whether to allow a patent to issue or not. Alongside these congressional proposals, the USPTO itself has engaged in a substantial rulemaking effort in recent years. This process culminated in new rules that would make several significant changes to the patent acquisition process. First, the rules would limit the number of "claims" that can be filed in a particular patent application, unless the applicant supplies the USPTO with an "Examination Support Document" in furtherance of that application. Second, the rules would limit the number of "continued applications" that could be filed, absent a petition and showing by the patent applicant of the need for such applications. In addition, the USPTO has proposed reforms that would impose additional applicant disclosure obligations with respect to "Information Disclosure Statements" filed in support of a particular patent application. The USPTO rules concerning claims and continued applications are controversial. Some patent professionals are concerned that the rules would make the process of patent acquisition more costly, impede the ability of innovators to protect their inventions adequately, and ultimately harm innovation. Some have also opined that the rules are inconsistent with the provisions of the governing patent legislation, the Patent Act of 1952. On the other hand, other observers believe that current claiming and continued application practices are subject to abuses that can potentially place undue burdens upon the USPTO during its examination tasks, be harmful to competitive industry, and at times work against the public interest. These observers favor reforms that would limit what they see as applicant abuses of the current system. Criticisms of the USPTO rules have led to legal challenges before the U.S. District Court for the Eastern District of Virginia. The result was the April 1, 2008 decision in Tafas v. Dudas . There, the U.S. District Court for the Eastern District of Virginia concluded that the USPTO claims and continued application rules were substantive in nature. Because Congress has not granted general substantive rulemaking power to the USPTO, the District Court declared that the rules were void and therefore unenforceable. The USPTO has appealed this judgment. At the time of the publication of this report, this outcome of this appeal is not yet available. Congressional response to the claims and continuing application rules has thus far been limited. In the 110 th Congress, H.R. 1908 would have expressly provided the USPTO with regulatory authority to specify the circumstances under which a patent applicant may file a continuing application. That bill passed the House on September 7, 2007, as the "Patent Reform Act of 2007." No other legislation in the 110 th Congress—including S. 1145 , the Senate legislation also titled the "Patent Reform Act of 2007"—addressed the new USPTO rules. This report reviews the USPTO rules that would restrict claims and continuing applications. It begins by offering a summary of the patent system and the role of patents in innovation policy. The context, details, and legal challenges to the new USPTO rules are then explained. The report then offers both the policy justifications for the new rules, as well as concerns that patent professionals and other observers have expressed over their effectiveness and impact. The report closes by identifying congressional issues and options. The U.S. Constitution provides Congress with the power "To promote the Progress of Science and useful Arts, by securing for limited Times to ... Inventors the exclusive Right to their ... Discoveries.... " In accordance with the Patent Act of 1952 (the "Patent Act"), an inventor may seek the grant of a patent by preparing and submitting an application to the USPTO. USPTO officials known as examiners then determine whether the invention disclosed in the application merits the award of a patent. In determining whether to approve a patent application, a USPTO examiner will consider whether the submitted application fully discloses and distinctly claims the invention. In particular, the application must enable persons skilled in the art to make and use the invention without undue experimentation. In addition, the application must disclose the "best mode," or preferred way, that the applicant knows to practice the invention. The examiner will also determine whether the invention itself fulfills certain substantive standards set by the patent statute. To be patentable, an invention must meet four primary requirements. First, the invention must fall within at least one category of patentable subject matter. According to the Patent Act, an invention which is a "process, machine, manufacture, or composition of matter" is eligible for patenting. Second, the invention must be useful, a requirement that is satisfied if the invention is operable and provides a tangible benefit. Third, the invention must be novel, or different, from subject matter disclosed by an earlier patent, publication, or other state-of-the-art knowledge. Finally, an invention is not patentable if "the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." This requirement of "nonobviousness" prevents the issuance of patents claiming subject matter that a skilled artisan would have been able to implement in view of the knowledge of the state of the art. If the USPTO allows the patent to issue, its owner obtains the right to exclude others from making, using, selling, offering to sell or importing into the United States the patented invention. Those who engage in those acts without the permission of the patentee during the term of the patent can be held liable for infringement. Adjudicated infringers may be enjoined from further infringing acts. The patent statute also provides for an award of damages "adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer." The maximum term of patent protection is ordinarily set at 20 years from the date the application is filed. At the end of that period, others may employ that invention without regard to the expired patent. Patent rights do not enforce themselves. Patent proprietors who wish to compel others to respect their rights must commence enforcement proceedings, which most commonly consist of litigation in the federal courts. Although issued patents enjoy a presumption of validity, accused infringers may assert that a patent is invalid or unenforceable on a number of grounds. The Court of Appeals for the Federal Circuit (Federal Circuit) possesses nationwide jurisdiction over most patent appeals from the district courts. The Supreme Court enjoys discretionary authority to review cases decided by the Federal Circuit. Patent ownership is perceived to encourage innovation, which in turn leads to industry advancement and economic growth. One characteristic of the new knowledge that results from innovation is that it is a "public good." Public goods are non-rivalrous and non-excludable, for use of the good by one individual does not limit the amount of the good available for consumption by others, and no one can be prevented from using that good. The lack of excludability in particular is believed to result in an environment where too few inventions would be made. Absent a patent system, "free riders" could easily duplicate and exploit the inventions of others. Further, because they incurred no cost to develop and perfect the technology involved, copyists could undersell the original inventor. Aware that they would be unable to capitalize upon their inventions, individuals might be discouraged from innovating in the first instance. The patent system corrects this market failure problem by providing innovators with an exclusive interest in their inventions, thereby allowing them to capture their marketplace value. The patent system purportedly serves other goals as well. The patent law encourages the disclosure of new products and processes, for each issued patent must include a description sufficient to enable skilled artisans to practice the patented invention. At the close of the patent's twenty-year term, others may employ the claimed invention without regard to the expired patent. In this manner the patent system ultimately contributes to the growth of the public domain. Even during their term, issued patents may encourage others to "invent around" the patentee's proprietary interest. A patentee may point the way to new products, markets, economies of production and even entire industries. Others can build upon the disclosure of a patent instrument to produce their own technologies that fall outside the exclusive rights associated with the patent. The regime of patents has also been identified as a facilitator of markets. Absent patent rights, an inventor may have scant tangible assets to sell or license. In addition, an inventor might otherwise be unable to police the conduct of a contracting party. Any technology or know-how that has been disclosed to a prospective licensee might be appropriated without compensation to the inventor. The availability of patent protection decreases the ability of contracting parties to engage in opportunistic behavior. By lowering such transaction costs, the patent system may make transactions concerning information goods more feasible. Through these mechanisms, the patent system can act in a more socially desirable way than its chief legal alternative, trade secret protection. Trade secrecy guards against the improper appropriation of valuable, commercially useful and secret information. In contrast to patenting, trade secret protection does not result in the disclosure of publicly available information. That is because an enterprise must take reasonable measures to keep secret the information for which trade secret protection is sought. Taking the steps necessary to maintain secrecy, such as implementing physical security measures, also imposes costs that may ultimately be unproductive for society. The patent system has long been subject to criticism, however. Some observers have asserted that the patent system is unnecessary due to market forces that already suffice to create an optimal level of innovation.