Fed. Circuit Grants En Banc Review in Tafas v. Doll

The Federal Circuit has granted Tafas & GSK’s petition for a rehearing en banc, which opens the door on the PTO having the ability to restrict the number of continuation applications and claims used in an application. Appellant’s briefs should come due around August 6, and the opposing briefs around August 26.

According to the order, "[t]his appeal will be heard en banc on the basis of the briefs already on file and additional briefs discussing the issues addressed in the panel opinions." Additionally, "briefs of amici curiae will be entertained in accordance with Federal Rules."

- Read the CAFC's order here (link)

- See Wall Street Journal: "US Appeals Court To Reconsider Challenge To New Patent Rules " (link)

- BLT: "Federal Circuit to rehear Tafas Case" (link)

CAFC Throws a Bone to the PTO in Tafas Case: Now What?

By now, most everyone has heard that the CAFC issued its opinion in Tafas v. Doll and upheld the PTO's authority to promulgate many (but not all) of the rules. After much hand-waving over what PTO rules are to be considered "procedural" versus "substantive", the CAFC essentially treated the rules as a substantive due process issue over a non-fundamental right.

While we do not purport to set forth a definitive rule for distinguishing between substance and procedure in this case, we conclude that the Final Rules challenged in this case are procedural. In essence, they govern the timing of and materials that must be submitted with patent applications. The Final Rules may “alter the manner in which the parties present . . . their viewpoints” to the USPTO, but they do not, on their face, “foreclose effective opportunity” to present patent applications for examination.

The only Rule change that was shot down was the "Rule 78" provision that set a 2 continuation limit without “showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application.” Here, the CAFC stated:

[F]inal Rule 78 is inconsistent with § 120 . . . Section 120 unambiguously states that an application that meets four requirements “shall have the same effect, as to such invention, as though filed on the date of the prior application.” . . .

The use of “shall” indicates that these are the exclusive requirements, and that all applications that meet these requirements must receive the benefit provided by § 120. . . .Thus, Rule 78 is invalid because it attempts to add an additional requirement—that the application not contain amendments, arguments, or evidence that could have been submitted earlier - that is foreclosed by the statute. Because the statute is clear and unambiguous with respect to this issue, the USPTO’s [argument] is unavailing.

Regarding the remaining Rules, the CAFC majority opinion considered and acknowledged at least some of the headaches imposed by the rules, but nevertheless stated that the PTO will not be prevented from acting

simply because it requires the applicant to exert more effort to comply, so long as the effort required is not so great that it effectively forecloses the possibility of compliance.

So with that in mind, here's what the CAFC had to say about the remaining rules:

Rule 114: One RCE is provided as a matter of right provides for similar treatment of RCEs. Under the rule, an applicant is allowed one RCE as a matter of right per family. Each additional RCE would require a petition “showing that the amendment, argument, or evidence sought to be entered could not have been submitted prior to the close of prosecution in the application.”

Here, section 132 states that "if after receiving [a rejection], the applicant persists in his claim for a patent, with or without amendment, the application shall be reexamined" [section 132(a)]. Also, "“[t]he director shall prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant” [section 132(b)]. While the CAFC noted that section 132 did not define the difference between “continued examination” and “reexamination,” teh court nevertheless found that nothing in the statute precluded the PTO from limiting RCE's in the proposed manner.

Rules 75 & 265: The "5/25 ESD Rules" - applicant submitting either more than five independent claims or twenty-five total claims must provide an examination support document (“ESD”) that includes a preexamination prior art search, a list of the most relevant references and limitations disclosed by each reference, an explanation of how each independent claim is patentable over the submitted references, and an analysis of how each limitation of the claims is disclosed and enabled by the specification.

Here, the CAFC flatly stated:

[W]e need not decide whether the USPTO may impose a limit on the number of claims an applicant can pursue because we do not find that the ESD requirement creates any such limit. Rather, it simply requires that an ESD be submitted if more than five independent or twenty-five total claims are included in certain sets of copending applications. Because we cannot, as discussed above, conclude that Final Rules 75 and 265, on their face, effectively foreclose applicants from successfully submitting ESDs, we similarly cannot conclude that these rules place an absolute limit on claim numbers in violation of § 112, ¶ 2.

In addition, the CAFC rejected the concerns over inequitable conduct when it came to ESD's:

We recognize that the drafting of an ESD will entail browsing many references, that mistakes and omissions will inevitably occur, and that the courts will be asked to determine if there was inequitable conduct. However, doubt about the judiciary’s ability to apply its own doctrine in a way that yields fair results and discourages frivolous allegations should not preclude the USPTO from promulgating rules that are within its statutory authority.

So now what? The CAFC affirmed-in-part, vacated-in-part and remanded the case back to the district court. While the issue of rulemaking authority was resolved, the CAFC made clear that other issues were still fair game, albeit harder to prove by plaintiffs:

Because of the complexity of this case and the numerous arguments presented on appeal and before the district court, we think it is important to expressly summarize what we believe remains for the district court on remand. This opinion does not decide any of the following issues: whether any of the Final Rules, either on their face or as applied in any specific circumstances, are arbitrary and capricious; whether any of the Final Rules conflict with the Patent Act in ways not specifically addressed in this opinion; whether all USPTO rulemaking is subject to notice and comment rulemaking under 5 U.S.C. § 553; whether any of the Final Rules are impermissibly vague; and whether the Final Rules are impermissibly retroactive.

Expect each of these topics to have a large bulls-eye on them for the remand.

While many are hopeful for en banc review, the odds don't seem in favor of it right now. Interestingly, Joe Miller from the Fire of Genius Blog noted on the Patently-O boards that

The court's internal operating procedures entail circulating a draft opinion, before it issues to the public, to the full court. At that time, a judge could initiate a poll of the judges to take the case en banc. (IOP #10(5).) There's no sign that such a poll happened here.

In any event, it seems clear that (a) the other judges of the court are not learning about this decision today (along with the rest of us), and (b) a majority of them already could have stopped it from happening if they had wanted to.

Another wrinkle is that the PTO director has not been named as of yet. It is possible that the new director will drop the case entirely.

In the meantime, the PTO released this statement after the decision:

The United States Patent and Trademark Office is pleased that the United States Court of Appeals for the Federal Circuit confirmed that the Final Rules are within the agency's rulemaking authority and that the rules regarding requests for continued examination, claims, and examination support documents are consistent with the law. We are further considering other aspects of the opinion, including the Federal Circuit's conclusion that the rule regarding continuations conflicts with the Patent Act.

The Office gave no word on the fate of the Appeal Brief Rules, which were delayed last December.

Read:

-- Patent Baristas: "Court Splits the Baby on Patent Office Continuation Rules. Expect More Tension" (link)

-- Patently-O: "Tafas v. Doll: Continuation Limits Invalid; Limits on Claims and RCEs are OK" (link)

-- Reuters: "Court mostly backs new patent office rules" (link)

-- BNET: "Mixed Results in Tafas v. Doll Appeal Over New Patent Rules" (link)

-- CNNMoney.com: "Appeals Court Revives Some Patent Rules Attacked By Glaxo" (link)

Tafas v. Dudas Oral Arguments Completed at the CAFC

Today, a panel of the Court (Rader, Bryson, Prost) heard oral argument in Tafas v. Dudas before a jam-packed courthouse. Early reports indicate that the CAFC recognized, despite PTO assertions to the contrary, that the proposed continuation rules effectively set a “hard limit” of two continuing applications, and are potentially in conflict with the statute.

The court also seemed wary of the Examination Support Document (ESD) requirement (Tafas' counsel refered to it as an "Express Suicide Document"), and sharply questioned the PTO in this regard. From Hal Wegner's account:

The [PTO] General Counsel was asked whether – if he were counsel to a pharmaceutical client – he could recommend the ESD: He answered unequivocally in the affirmative. To this answer, and accompanied by laughter from the packed courtroom, the presiding judge advised the General Counsel to seek employment in the electronics or other industries.

Read more detailed accounts on the oral arguments at the PLI Blog (link1) (link2)

Also, the oral arguments are available in MP3 fromat from the CAFC website (link)

USPTO Clarification: (Some) Continuation Rules Not Retroactive, Despite Appeal

The USPTO issued a clarification today, stating that practitioners should not try to overcompensate by taking "preparatory actions" for portfolios in light of the continuation rule appeal. Worry not: if the injunction is overturned at the CAFC (shudder), the PTO will not retroactively apply the rules in certain cases:

[T]he changes in 37 CFR 1.78(f)(1) and (f)(2) will only apply to applications filed on or after any new effective date that would be published by the USPTO after the removal of the injunction . . . [a]pplicants will only have to identify other commonly owned applications that satisfy the conditions set forth in 37 CFR 1.78(f)(1)(i) in applications that have a filing date on or after this new effective date. Similarly, the rebuttable presumption of 37 CFR 1.78(f)(2) will only apply to applications having an actual filing date on or after the effective date. Furthermore, the rebuttable presumption will only exist with respect to an application that satisfies the conditions set forth in 37 CFR 1.78(f)(2)(i) and also has a filing date on or after this new effective date.

Read the notice here.

Query: who on earth is making these filings that prompted the PTO "clarification"?

Consumer Groups File CAFC Amicus Brief in Support of USPTO Rule Changes

A coalition of consumer advocacy and public interest groups recently filed an amicus brief at the CAFC, arguing that the PTO's "continuation rule changes" would curtail abusive behavior by patent applicants and improve patent quality.

The brief continues the same themes raised in earlier amicus briefs at the district court, that endless continuations harm the public good and hinder innovation. While being light on substantive legal analysis, the brief manages to poke some thumbs into the eyes of those seeking to block the continuation rules.

These excuses [for opposing the rules] lack any technological or economic merit, because any claims desired and deserved by a patent applicant can and should be included in the original application, an amendment to it, or any of the continuation applications allowed under the Final Rules as a matter of right without justification. The failure to do so would be caused by the patent applicant's own delay in recognizing what it is they want to claim, and not by the USPTO or its Final Rules.

* * *

[T]here have been several patents that were used to preclude competition in markets worth billions of dollars that were later proven to be undeserved.
One industry where this phenomenon repeatedly occurs is the pharmaceutical
industry . . . consumers of pharmaceuticals are especially prone to the negative effects of poor patent quality, as markets with monopolies maintained by undeserved patents force consumers to spend much more on drugs than they would if the market was subject to competition unrestrained by invalid patents.

* * *

[A]rguments regarding the public interest made by patent holders and patent attorneys should be carefully scrutinized, because these groups are actually, in fact, the special interests that benefit from the patent system and what benefits them personally may not actually benefit the public interest.

The groups joining in filing the Public Interest Amici brief are: The Public Patent Foundation (“PUBPAT”), AARP, Computer & Communications Industry Association (“CCIA”), Consumer Watchdog (Formerly the Foundation for Taxpayer and Consumer Rights), Essential Action, Initiative for Medicines, Access & Knowledge (“I-MAK”), Prescription Access Litigation (“PAL”), Public Knowledge (“PK”), Research on Innovation (“ROI”), and Software Freedom Law Center (“SFLC”).

Download the brief in its entirety here, courtesy of PubPat.

*** USPTO Continuation Ruled Dead (For Now) ***

Judge Cacheris from the ED Va. granted GSK’s and Tafas’s Motions for Summary Judgment finding that the PTO’s "hard limit" on the number of continuation applications and claims per patent were excessive extensions of PTO authority:

Because the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not
extend to substantive rules, and because the Final Rules are substantive in
nature, the Court finds that the Final Rules are void as ‘otherwise not in
accordance with law’ and ‘in excess of statutory jurisdiction [and] authority.’
5 U.S.C. § 706(2).

The 26 page opinion mainly addressed the "substantive" aspect of the rules and didn't stray further.

Expect the PTO to hit Congress hard on S.1145 to give it statutory authority - such a provision would effectively override the district court's ruling.

Read opinion here (link)

Read order here (link)

Tafas v. Dudas: Continuation Rules Oral Argument Recap

On Friday, Judge Cacheris heard oral arguments from Tafas, GSK and the USPTO on three motions for summary judgment regarding. As was expected, the blog coverage was fast and furious, but ultimately, Judge Cacheris decided to take the matter "under advisement," agreeing to issue an opinion at a later date, noting that "there is a lot of paper to consider" (see the court's minute entry here).

Blogosphere Observations:

(1) Everyone had their "A" game: The court, and all appearing parties, were well-prepared and meant business. The PTO (represented by Lauren Wetzler and Steve Walsh) was more polished in contrast to the preliminary injunction arguments. Judge Cacheris shot off multiple pointed questions that left both sides playing catch-up through parts of the proceeding.

(2) It's "all or nothing": neither side is proposing "carve-outs" for specific sections of the continuation rule changes. The entire rule will stand or fall as a result of the litigation.

(3) What is the PTO's rule making authority? A good portion of the arguments centered around the PTO's rule making authority, governed by 35 U.S.C. § 2(b)(2), stating the the Office "may establish regulations, not inconsistent with law, which-

(A) shall govern the conduct of proceedings in the Office; [and?/or?]

(B) shall be made in accordance with section 553 of title 5 [of the Administrative Procedure Act (APA)]."

The plaintiffs submitted that section 2(b)(2) required that both requirements had to be met in order for the continuation rules to be effective. As the PTO did not follow the provisions of section 553 (notice/comment), Plaintiffs argued that the rules were void. The PTO countered that the Office had authority from Congress to enact the continuation rules as presented, without having to meet every requirement of the APA.

(4) Are the PTO Rules "substantive"? The remainder of the arguments surrounded the issue of whether or not the PTO's continuation rules were "substantive" as opposed to "procedural." Tafas/GSK argued that, since the rules were substantive in nature (i.e., changed the manner in which patentable subject matter could be claimed), the PTO inherently lacked authority to implement the rules.

The PTO responded that the rules were reasonable "procedural" restrictions that would aid the PTO in curbing the avalanche of [continuation?] applications at the PTO. Nevertheless, the PTO appeared to concede that substantive rules could not be applied retroactively, adding that changes to the FRCP have been routinely applied to pending litigation without any trouble.

From Around the Horn:

See John White's play-by-play coverage of the oral arguments at the PLI Blog (link1) (link2).

Listen to John's audio report here (link), as well as Bob Spar's audio report (link).

Read Jill Browning's detailed report at Patently-O (link).

More from Patent Hawk (link) and Patent Baristas (link).

See the current docket report from Justia here (link)

Study Shows USPTO Backlog Is Tied More to Non-Final Actions, and Not Continuations

George Mason University Assistant Professor of Systems Engineering & Operations Yifan Liu and J.D. Candidate Ayal Sharon reviewed the backlog problem at the PTO, and applied a "queueing theory" analysis to filings to determine where the problems may lie.

Queueing theory enables mathematical analysis of several related processes, including arriving at the back of a queue, waiting in the queue (essentially a storage process), and being served by the server(s) at the front of the queue. Applying a "priority queue" analysis, the process works to:

• add an element to the queue with an associated priority;
• remove the element from the queue that has the highest priority, and return it; and
• (optionally) peek at the element with highest priority without removing it.

Turning their analysis to PTO pendency, the authors made the following assumptions:

(1) A priority queue processes higher priority items first, giving them a shorter queuing delay – but at only at the expense of longer queuing delays for lower-priority arrivals. Since the USPTO gives higher priority to RCEs and continuing applications than to regular new applications, large numbers of RCEs and continuing applications should result in disproportionate waiting times for regular new applications.

(2) At the very least, a limit on the number of continuing applications would be desirable because continuing applications can produce multiple generations of unlimited numbers of high priority offspring. RCEs and multiple non-final office actions both contribute to the risk of starvation, but pose less potential risk than continuing applications because they do not produce parallel offspring (branching feedback).

Did the study validate the PTO's assertion that pendency would be reduced? Erm . . . not quite:

. . . the [current] USPTO model is saturated and is overwhelmed. Some sort of policy change is needed to lower the total traffic intensity.

. . . based on the current statistics, the results from limiting continuing applications seem similar to the results from limiting RCE applications. Prohibiting second and later generations of continuation application, as the only policy change, will not have much impact. It may help somewhat to prohibit all continuations, but the system will remain saturated, and as with eliminating RCEs, it is unfair to the applicants.

This is not to say that the USPTO does not need safeguards to prevent an excessive use of continuation applications from becoming a workload problem in the future. A policy limiting continuation applications would be similar to the “admission control policies” used to limit the number of arriving items in computer operating system priority queues. What this analysis shows, however, is that based on current statistics, such a policy will not currently have much of an effect.

. . . we find that the excessive number of non-final rejections per application is the main cause of the system’s saturation. The sensitivity analysis performed in appendix IV supports this conclusion. This number of excessive non-final rejections in each round of prosecution dwarfs the number of second and later RCEs and continuation applications. Reducing the number of non-final rejections per application is the most effective way to improve the throughput of the USPTO. This will help reduce the primary burden on the system — the large number of regular amended cases that remain alive in the system due to repeated non-final rejections.

. . . if we keep the current policies on RCE, continuations, and nonfinal rejections, we would need to increase the number of examiners by a factor of 1.2230 in order to decrease the total intensity from 1.2230 to 1. This would mean hiring 4215 x 0.2230 = 940 new examiners.139 (The USPTO goal for fiscal years 2005 and 2006 was to do exactly that.)

Hiring additional examiners is a problematic solution. Our hiring calculations are based on a on a "steady state" assumption that the growth rate of applications will remain proportional to the growth rate of the examining corps. However, for many years the incoming rate of applications has been rising, and is expected to continue to rise in the future. This means that the number of patent examiners would need to grow at least at a rate proportional to growth rate of new applications, ad infinitum. An exponential growth in hiring is not a sustainable solution. The USPTO has recognized that hiring is not a viable long-term solution to the problem.

We were surprised by the results of the simulation. We expected the results to show starvation of the priority queue, caused by the RCEs and continuations. Instead, we got the unexpected result that the large number of non-final rejections per round of prosecution is the major cause of the backlog of applications.

Given the limitations of time and scarcity of data, our model was very simple in terms of mathematical complexity. A more detailed analysis was beyond the scope of this modest student note. The authors hope that this note will encourage further research along these lines, both inside and outside the USPTO.

View/download the study here (link)

Hat tip: I/P Updates

The Morning After - Dissecting Judge Cacheris's Preliminary Injunction

In considering GSK's motion for preliminary injunction, the four factors relevant to the Court’s decision to grant or deny the injunction are: (1) the likelihood of the plaintiff’s success on the merits; (2) irreparable harm if the injunction is not granted; (3) the balance of hardships between the parties; and (4) the public interest.

LIKELIHOOD OF SUCCESS ON THE MERITS

GSK first argued that they will succeed on the merits because the PTO lacks the authority to promulgate substantive rules and therefore the PTO’s interpretation of the Patent Act is not owed Chevron deference. Instead, under Adams Fruit, the PTO is entitled no deference, since Section 2(b)(2) of title 35 does not vest the PTO with any substantive rulemaking power.

Judge Cacheris sided with GSK here, noting that

GSK raises serious concerns as to whether the Final Rules comport with the Patent Act. In addition, the Court also believes that GSK has created a colorable question as to whether the Final Rules are truly substantive. Thus, the Court will find that there is a genuine possibility that GSK will succeed on this issue.

Limiting Continuations

Regarding Final Rule 78, which limits the number of continuing applications, GSK argued that Section 120 of Title 35 prohibits the PTO from limiting the number of continuing applications that may be filed (Section 120 states that later filed applications “shall have the same effect” as pending previously-filed applications). While the PTO relied on the "prosecution laches" holdings from the CAFC (In re Borgese, In re Henricksen, Symbol Tech.), Judge Cacheris noted that

Section 120 as interpreted in [these cases] prevents the PTO from crafting its own limitations to the number of continuation applications that may be filed . . . the Federal Circuit held that the doctrine of prosecution laches “should be used sparingly lest statutory provisions be unjustifiabaly vitiated.” . . . This holding suggests that a decision by the PTO to limit the number of continuing applications would run contrary to the mandate of Section 120.

Limiting RCE's , and the 5/25 Rule

GSK further argued that 35 U.S.C. § 132 prohibits the promulgation of Final Rule 114, which governs RCEs. Section 132(b) requires that the PTO “prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant.” The PTO argued that Final Rule 114 complies with Section 132, even though it requires that a petition and showing accompany the filing of a second RCE.

Likewise, for Final Rules 75 and 265 (limiting the number of claims), it was argued that, under 35 U.S.C. 111 and 112, the PTO doesn't have the authority to place a limit on the number of claims an applicant may file. In both these instances, the court found this matter a wash:

Given the limited briefing of this issue by both parties, the Court will find that, for the purposes of this motion, neither party can claim a strong likelihood of success on this issue.

Retroactivity of the Continuation Rules

Here, GSK made a clever move: instead of arguing that rights in patent applications were threatened, GSK argued that rights in trade secrets were threatened, since these potential secrets were sacrificed in the act of filing a patent application (this was also argued in the AIPLA amicus brief).

[A]s GSK noted at oral argument, by seeking patent protection inventors like GSK sacrifice their trade secrets, and the United State Supreme Court has found that trade secrets are property rights . . . GSK, then, has voluntarily surrendered its property rights in exchange for a guarantee from the PTO that it will have a “full and fair opportunity to seek a spectrum of patent protection adequate to protect [its] investments.” . . . While “an individual [that] discloses his trade secret to others who are under no obligation to protect the confidentiality of the information, or otherwise publicly discloses the secret,” loses that property right . . . the Final Rules retroactively alter the bargain on which inventors like GSK rely in making their decision to surrender their rights. The Final Rules thus impair GSK’s right to this bargain.

Examination Support Documents

GSK argued that Final Rule 265, which delineates the requirements of an ESD, is unconstitutionally vague because it fails to provide “any boundaries on the scope of the search.” Specifically, GSK complains that the “rule does not indicate whether the applicant must conduct electronic searches, manual searches, or both; in which countries’ databases the applicant must search; or which libraries it must search." According to GSK, the ESD requirement forces applicants to “search the patent literature of the entire world, as well as
unspecified yet relevant ‘non patent literature.’”

While the PTO maintained that the ESD requirements are clear (noting the "Guidelines for ESD" document published last month), GSK countered that the need for official guidance suggests an admission of vagueness. Moreover, any guidance documents generated by the PTO outside of the notice and comment rulemaking process violate the Administrative Procedure Act. The court sided with GSK:

[B]ecause the Court believes that GSK has raised serious concerns as to whether a reasonably prudent person would be able to comply with the ESD requirements, the Court will find that GSK has demonstrated a real likelihood of success on this issue.

IRREPARABLE HARM

Briefly stated, the court found the uncertainty over the new rules to be a key factor in determining harm:

Although GSK cannot pinpoint an exact amount of monetary loss, the uncertainty caused by the regulations will cause harm to their investments and provide a disincentive to their filing of new patent applications for researching new pharmaceutical products. In addition, there is still some question as to whether following the complicated steps outlined by the PTO will indeed guard against lost patent protection. Finally, GSK will be unable to recover their losses if the Final Rules are ultimately determined to be invalid. Therefore, the Court finds that GSK is likely to suffer irreparable harm if the preliminary injunction is not granted.

BALANCE OF HARDSHIPS

Here the court sided with GSK, since the harship on the PTO was related to "sunk costs already incurred by training personnel and changing the computer systems." The PTO's position, pending the resolution of the case, would be to merely maintain the status quo. In contrast, the harm to GSK would be "immediate" once the rules went in effect.

THE PUBLIC INTEREST

The court sided with GSK, that argued that "stability" in the patent office was key, and also found the amicus briefs persuasive (hint, hint):

GSK asserts that preserving the status quo while the litigation proceeds is important for maintaining stability for patent holders. Innovation is encouraged when patent holders and applicants have certainty about how their patents will be treated. The fact that three amicus briefs were filed by organizations representing a wide array of industries, all urging the Court to grant the preliminary injunction because their interests will otherwise be harmed, further demonstrates the possibility of potential immediate harm to the public if the rules are allowed to go into effect on November 1. Many companies rely upon the stable, reliable protection afforded by the current patent system in determining whether it is cost effective to abandon their trade secret protection by pursuing a patent. Implementation of the Final Rules changes those companies’ calculus and immediately decreases their ability to
pursue costly new innovations.

NOTE: GSK also argued that the rules violated the APA, since they were "arbitrary and capricious." While the court didn't exactly embrace the USPTO's position, Judge Cacheris stated that

Though the Final Rules would reduce the PTO’s backlog by only 2.7% and, by their own admission, are insufficient to reduce the backlog to a reasonable level, PTO models show that they will have an impact on the backlog . . . Thus, the PTO’s rationale appears to be sufficient to satisfy arbitrary and capricious review, and the Court will find that GSK has not shown a real likelihood of success on this issue.

How long does the injunction last? "This Order shall expire upon the entry of a final judgment in this matter, unless otherwise ordered by the Court."

Read the Opinion here (link)

View the order here (link)

** INJUCTION ISSUED **

Reports are starting to come in that GlaxoSmithKline has prevailed and that the Patent Office has been enjoined from making the Final Rules on claims and continuations effective.

More to follow . . .

UPDATE: More post-mortem on the oral arguments from Gene Quinn (link) - Judge Cacheris did not make any statements about the likely merits of the case when making his ruling from the bench. He will, however, be issuing a formal written opinion which will be entered sometime this afternoon.

UPDATE2: Apparently, the PTO has no intention of backing down. Peter Lattman of the Wall Street Journal forwarded the following message from the PTO to Gene Quinn in response to inquiries he made regarding the rules being enjoined:

Interest shown by the U.S. Supreme Court and the U.S. Congress in patent modernization indicates that the system needs change. The USPTO continues to believe that the rules are an important component of modernizing the patent system. They are part of a package of initiatives designed to improve the quality and efficiency of the patent process and move American innovation and our economy forward. This multi-pronged approach is already showing results. Patent examination quality is at a record high. Nearly 97 percent of the patents issued in FY 2007 met stringent independent quality standards, up from about 93 percent in FY 2000. Additionally, last year USPTO’s board of patent appeals upheld examiners decisions to reject patents nearly 70 percent of the time, compared with only 51 percent of the time in FY 2000.

In other words, the PTO knows what's best - the rest of us are just to dense to appreciate the goodness that was bestowed upon us, prior to this litigation . . .

Arguments Are In on Continuation Challenge - Decision Expected Shortly

John White reports over at the PLI Patent Blog:

All of the arguments have been made and Judge Cacheris will be making his decision in about 10 minutes from now.

Judge Cacheris will be entering his opinion sometime this afternoon.

Amici Curiae briefs continue to pour into the Eastern District of Virginia.

The courtroom is completely packed, with reporters everywhere.

You have to feel sorry for the Patent Office because they had no real arguments.

The weight of public interest is so heavily on the side of those seeking the injunction.

Stay tuned . . .

Ground Zero at the ED Virginia

John White from the PLI Blog will be at the hearing this morning and will attempt to provide blow-by-blow coverage as soon as possible. Regardless of whether there has been an injunction issued or not, PLI will be holding a telephone/webcast briefing on Friday, November 2, 2007 on the case.

For more details, click here (link).

Since last week, 4 more amicus brief were added to the mix:

- Joint filing by Hexas LLC, The Roskamp Institute, Tikvah Therapeutics, Inc. - (link)

- Elan Pharmaceuticals, Inc. - (link)

- Pharmaceutical Research and Manufacturers of America - (link)

- Biotechnology Industry Organization - (link)

Of course, the PTO opposed all of the amicus briefs (refering to them as "me too" briefs).

See more coverage at

• PLI Blog (link)
• Patently-O (link)
• Patent Baristas (link)

See also the Certification Analysis prepared by ICF International, on behalf of the PTO, concluding that the continuation rules have "no significant impact" (link)

Sen. Schummer Asks PTO to Delay Implementation of Continuation Rules

Gene Quinn from the PLI Patent Blog broke this recent development in the continuation rules saga - Senator Charles Schummer (D-NY), who is a member of the Judiciary Committee, sent Undersecretary of Commerce for Intellectual Property Jon Dudas a letter raising concerns about the claims and continuations rules that are to go into effect on November 1, 2007.

From the letter:

[C]oncerns have been raised as to the impact this proposed rule will have on certain types of inventions. In addition, there are questions as to whether the PTO has the necessary authority to limit the number of continuation applications. More time would allow all interested parties to analyze these questions further.

The proposed rule regarding examination of claims raises additional concerns. It would require the filing of an extensive examination support document whenever an applicant needs to file more than ten representative claims to accurately describe its invention. Examination support documents can be very costly, thereby requiring an inventor to choose between significant costs and additional claims in the patent (which may be appropriate to accurately define and describe an invention). The proposed rule may thus serve to undermine core principles of patenting process, full candor and disclosure to the PTO and the public.

As you know, there is a pending lawsuit in the Eastern District of Virginia seeking an injunction of the new rules. This court case also cautions against making the proposed rules final at this time. A delay would allow the courts to assess the merits of the pending suit. Finally, Congress is currently considering a patent reform bill in which these issues may be addressed.

I appreciate the PTO's goal to create the most efficient and effective process to ensure both continued innovation and protection for the research and development efforts of patentholders. The proposed rules, however, may have the unintended consequences of stifling such innovation, and I urge you to consider delaying their implementation. Please do not hesitate to contact me with any questions. Thank you very much for your time and close attention.

View the letter here (link)