Challenge to USPTO's IDS Rules Filed in OMB

David Boundy, VP of Intellectual Property at Cantor Fitzgerald filed a paper yesterday, along with 29 other signatories, challenging the proposed IDS rules. Many, if not all, of the parties involved in the challenge collaborated in the eralier challenge to the continuation rules.

The current challenge pulls no punches:

In the proposed IDS Rule, USPTO has again misrepresented to OMB the breadth and depth of the effects likely to result. The proposed IDS Rule is clearly “economically significant.” If finalized, it will impose billions of dollars of burden on patent applicants and owners. The preamble asserts that the rule will generate savings to USPTO, but these savings are neither quantified nor reflected in USPTO’s FY 2008 budget submission. In support of these radical changes, USPTO has disclosed no supporting evidence or analysis in the NPRM or the rulemaking docket.

The proposed IDS Rule has another fatal defect: it is fundamentally inconsistent with case law governing the conduct of patent applicants and their agents under federal patent law. The courts require applicants and agents to fully disclose all potentially relevant information to USPTO, and they will take away the property rights of patentees who fail to do so. Through the IDS Rule, USPTO is demanding that patent applicants break the law just to ease USPTO’s workload. It is worth remembering that patent applicants pay fees to USPTO that fully cover the cost of patent examination, and USPTO has specific authority to charge fees specific to the service at issue in this Rule, and currently does so. USPTO now wants to refuse to consider the prior art and eliminate the fee.

Additionally,

[T]he proposed IDS Rule conflicts with the law of inequitable conduct. USPTO is fully aware of this conflict, and so the proposed rule contains language purporting to create a “safe harbor.” To gain shelter there, applicants must take “reasonable steps, “in good faith and to the best of [their] knowledge, information and belief, formed after a reasonable inquiry under the circumstances” “to comply with [these] additional disclosure requirements.”

As safe harbors go, this one has submerged hazards throughout. USPTO does not provide a clue as to what constitutes “reasonable,” “good faith,” or “best” knowledge. While it could have provided clear statements on this point, it did not do so. USPTO could have offered to provide patentees a certification that it was completely satisfied that the applicant had secured mooring in the safe harbor. It did not do that, either. In short, USPTO left patentees at the mercy of future infringers’ counsel.

An interesting side note is that that this paper estimates the minimum direct paperwork cost for only one part of the IDS Rule at $1.9 billion - more than the PTO's total budget of $1.7 billion.

Read/download the paper here (link)