Tafas, GSK File Petitions For En Banc at the CAFC

I'm on travel this week, and have had very little time to post, so apologies in advance for the brevity . . .

Tafas, GSK filed petitions for en banc rehearing. From the Tafas brief, the questions presented :

1. Does the standard "foreclose effective opportunity to present patent applications for examination" or "effectively foreclose[] [applicants] from obtaining patent rights to which they are entitled" comport with United States Supreme Court and Federal Circuit precedent classifying "substantive" rules as those which cause a change in existing law or policy affecting individual rights and obligations?

2. Are Final Rules 75, 114, and 265 impermissibly inconsistent with law
so as to exceed the scope of the United States Patent and Trademark Office's
limited rule making authority under Section 2(b)(2) of the Patent Act?

From the GSK brief, the questions presented:

I. Whether the Panel maJonty erred in rejecting the test fo determining whether a Patent and Trademark Office ("PTO") rule is "substantive," as set forth in the controlling precedent of Chrysler, supra; Animal Legal Defense Fund, supra; and Cooper Technologies, supra.

II. Whether the Panel majority erred in holding that the challenged Final Rules, 72 Fed. Reg. 46,716 (Aug. 21, 2007), fall within th PTO's limited, non-substantive rulemaking authority.

Download a copy of the Tafas brief here (link)

Download a copy of the GSK brief here (link)

USPTO Files CAFC Appeal Brief: Tafas v. Dudas

As expected, the USPTO continues its appeal after the district court ruled that the PTO lacked authority to limit the number of claims and continuations that applicants could file. OnJuly 18th, the PTO submitted a brief to the CAFC that presented the following 3 issues:

1. Whether the USPTO’s revised rules of practice for patent cases are within the scope of the Office’s statutory rulemaking authority.
2. Whether the revised rules conflict with the Patent Act.
3. Whether the USPTO must provide public notice and comment for rules that are not subject to notice and comment under the Administrative Procedure Act.

At the outset, the PTO continues to debase continuations as a legitimate prosecution strategy:

Continuation and continuation-in-part applications and RCEs play a major role in [increasing backlogs at the PTO]. As a percentage of all filings, continuation applications and RCEs increased from little more than a tenth (11.4%) in 1980 to nearly a third (29.4%) in 2006. . . . As the USPTO spends more time reviewing applications “that are a repetition of prior applications that have already been examined,” it is necessarily diverted from reviewing “new applications disclosing new technology and innovations.”

While the PTO decries backlogs in and of themselves, the PTO fails to give any historical context for these backlogs, or provide any comparative data from other patent offices. Just recently, James Malackowski and Jonathan Barney published a study on patent quality (see here), which concluded that current pendency rates were not at all unusual:

While exceedingly long pendency delays would be a fair cause for concern, the current average pendency of 3.4 years is comparable to those found in other major patent offices around the world. It is also not without precedent in the U.S. For example, in 1952-another period of rapid economic and technological development-average patent pendency reached over 3.6 years. Increasing pendency delays are probably more fairly characterized as an indication of a growing patent system than a broken patent system.

Also, the PTO continues to argue that Final Rule 78 “do[es] not set a per se limit on the number
of continuing applications,” since the only consequence for failing to make a "requisite showing" is that the new filing does not receive the benefit of the initial application’s filing date. However, this is precisely the point: since most applications will publish before a first office action, and since it is likely that the prosecution will continue for at least a year after publication, the applicant's own disclosure will bar subsequent filings under 35 U.S.C. 102(b).

The USPTO's arguments are summarized below:

1. The Final Rules are within the scope of the USPTO's rulemaking authority under the Patent Act. The Act's primary grant of rulemaking authority, Section 2(b)(2), authorizes the Office to issue rules that "govern the conduct of proceedings in the Office," "facilitate and expedite the processing of patent applications," and "govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office." The USPTO correctly determined that the Final Rules fit within these grants of rulemaking authority. By setting filing and documentation requirements, the rules regulate the conduct of proceedings in the Office and the conduct of attorneys and other representatives, and by discouraging unnecessarily repetitive filings and providing examiners with needed information, they facilitate and expedite the processing of patent applications.

In holding that the Final Rules are ultra vires, the court made no effort to measure the Final Rules against the actual terms of Section 2(b)(2), nor did the court give the USPTO's interpretation of that provision the deference required by Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and its progeny. Instead, the court held that the Office is confined to issuing procedural rules and that the Final Rules are impermissibly substantive. But the cases on which the district court relied do not engraft a rigid procedural/substantive distinction onto Section 2(b)(2). And even if they did, the Final Rules would still pass muster, for they regulate the procedures used in proceedings before the Office rather than the substantive criteria for the awarding of patents. The district court's conclusion that the rules are substantive rather than procedural rests on APA cases that do not involve that distinction at all, and the court's standards for measuring the "substantiveness" of rules are at odds with the Supreme Court's jurisprudence under the Rules Enabling Act.

The court compounded these errors by erroneously holding that Section 2(b)(2)(B), which provides for the USPTO to issue rules "in accordance with" 5 U.S.C. § 553, requires the Office to engage in notice-and-comment rulemaking even when Section 553 expressly provides that notice and comment are not required.

2. In the course of its ultra vires analysis, the district court held that the Final Rules are inconsistent with other provisions of the Patent Act. That holding is likewise incorrect. The court mischaracterized the effects of the Final Rules, misconstrued the statutory provisions, misunderstood the judicial precedents concerning those provisions, and failed to give the USPTO's construction of the provisions the deference required by Chevron.

The district court held that Rules 78 and 114 conflict with Section 120 and 132(b), respectively, because the rules place "hard limits" on the number of continuation applications and RCEs that an applicant may file, while the statutory provisions entitle applicants to make an unlimited number of such filings. But the rules do not in fact limit the number of continuation applications and RCEs that may be filed; they simply require an applicant to show the need for further filings once a threshold number of filings has been made. And even if the rules did impose fixed limits, they would not conflict with Sections 120 and 132(b). Section 120 was enacted by Congress simply to provide a statutory basis for continuation practice, not to vest applicants with the right to file an endless stream of continuation applications.

Likewise, Section 132(b), which directs the Office to issue regulations providing for continued examinations, does not entitle applicants to file an endless series of RCEs. The district court held that Rules 75 conflicts with Section 112 ¶2 by limiting the number of claims that may be included in a single application. But Rule 75 places no limit whatsoever on the number of claims in an application, and Section 112 ¶ 2 does not address the permissibility of such a limit in any event. The court also held that Rule 75 and 265 conflict with the provisions of the Patent Act that assign the USPTO the burden of examination and the burden of establishing a prima facie case of unpatentability. But there is no conflict between those provisions and the rules, which merely require applicants to provide information about their claims and prior art so examiners can discharge their burdens more accurately and efficiently.

Download a copy of the brief here, courtesy of Patently-O.

Patent Shorts

USPTO Gets Funding Increase - the PTO has received a budget increase of about 9 percent for the government's 2008 fiscal year. The Office received the president's full funding request of $1.9 billion in a budget bill passed by the U.S. Congress in mid-December and signed by president Bush the day after Christmas. If you thought PTO fee diversion is dead, think again - currently there is nothing preventing Congress from diverting fees as 2008 progresses (link).

Summary Judgment Motions Filed in Tafas/Glaxo v. Dudas - in addition to 31 amicus briefs filed in support of Tafas/Galxo, and 16 amicii filed supporting the PTO, all parties have submitted their briefs for summary judgment. View Glaxo's brief (link), Tafas brief (link), and the PTO brief (link). Read more at the PLI blog (link).

A "Long-Felt, Unmet Need" Gem - Johnson v. Forty-Second Street, Manhattanville & St. Nicholas Ave. R. Co., 33 F. 499, 501 (C.C.S.D.N.Y. 1888):

It would be as irrational to charge an author who has produced a sentence of surpassing power and beauty with plagiarism, because the words which he employes have long been found in the lexicon, as to over-throw a patent for a new and useful combination upon the ground that its separate elements are old. By an ingenious assembling of known appliances this inventor solved the problem the solution of which had been sought for in vain through a long series of years. Although the goal was frequently in sight, it had never been reached; always some necessary requisite to success was lacking. The practical disentanglement of the difficulty was left to Newman. He made that a success which before had been tentative and rudimentary.

Courtesy of the Fire of Genius blog (link)

Viewing Patent Searches Visually - Check out PatentScrounger.com (link)

USPTO Back in Court on Continuation Rule Changes

Dr. Tafas, GlaxoSmithKline and the PTO are scheduled to be back in court today, arguing over whether the depositions of Jon Dudas, John Doll, John Love and Robert Bahr should be allowed to take place. Additionally, the plaintiffs are seeking an order to compel document production from the PTO based on the fact that the Administrative Record is not complete due to the fact that certain documents have been withheld on the basis of privilege, as admitted by the PTO when the Administrative Record was certified.

The hearing will not only help resolve issues of discovery, but will also impact scheduling of the case. The preliminary schedule appears below.

Moving summary judgment briefs
If no discovery - Thursday, December 20, 2007
If discovery is ordered - Friday, January 25, 2008

Amici in support of GSK’s motions
If no discovery - Thursday, December 20, 2007
If discovery is ordered - Friday, February 1, 2008

Opposition briefs
If no discovery - Thursday, January 24, 2008
If discovery is ordered - Monday, March 3, 2008

Reply briefs
If no discovery - Thursday, February 7, 2008
If discovery is ordered - Friday, March 21, 2008

Hearing
If no discovery - Friday, February 15, 2007
If discovery is ordered - Friday, April 4, 2008 or Friday, April 11, 2008

For more information (and for additional juicy tidbits), read the blow-by-blow coverage at the PLI bog here and here.

UPDATE: The court denied the motions for discovery from the bench at the conclusion of the hearing earlier today. Thus, the Patent Office will not be required to provide a privilege log and can simply claim a blanket and unsubstantiated privilege at least in this case challenging the claims and continuations rules. Also, according to the earlier schedule, Summary Judgment motions will be due for Tafas and GSK on or before December 20, 2007. It is unclear whether that will also be the date by which Amici must also file. See more from PLI here.

War Drums Beating Louder in the Continuation Rule Battle

"Use humility to make the enemy haughty. Tire them by flight. Cause division among them. When they are unprepared, attack and make your move when they do not expect it."

-- SunTzu, "the Art of War"

Gene Quinn, and the good people over at the PLI Blog have their sharp eyes locked on the Glaxo litigation against the PTO, and have gotten their hands on the AIPLA's amicus brief, filed today in the E.D. Virginia. In short, the AIPLA urges the court to issue the TRO and preliminary injunction:

AIPLA focuses here on the related issues of irreparable harm and the public interest. It particularly addresses the irreparable harm caused by the retroactive impact of applying the new Rules to pending patent applications. Those applications were filed, and substantial resources committed, in reliance on fundamental principles of patent law that have applied for more than a century. As explained more fully below, the retroactive impact of the new Rules will cause irreparable injury not only to the GSK Plaintiffs, but to numerous patent application owners (whether business entities, universities, or individual inventors) throughout the country and over a wide spectrum of technologies.1 A delay in implementing the new Rules pending resolution on the merits, by contrast, should not adversely impact PTO operations or policy. For these reasons, AIPLA urges the Court to grant the temporary restraining order and preliminary injunction sought by the GSK Plaintiffs.

Read the brief here (link)

Additionally, David Kappos, VP and Assistant General Counsel for IBM, filed a declaration in support of the AIPLA, stating that the rules may result in an "irreparable loss" to IBM's IP rights - Read the Kappos declaration here (link)

Other declarations included Joseph Hetz (Brinks Hofer) and Burt Mages (Vierra Magen Marcus & DeNiro) on behalf of SanDisk Corporation, and Samson Helfgott, from Katten Muchin. You can view their declarations here, here, and here.

More notably, Glaxo obtained an affidavit from Harry Manbeck, who was a former PTO commissioner under George H. W. Bush, and is now a member of the Rothwell Figg firm in Washington, D.C.. Manbeck's declaration takes the PTO to task for exceeding their authority in promulgating the new rules, and further submits that the ESD requirements are almost impossible to follow:

"[I]t is my opinion that the Director and the PTO have exceeded their statutory authority in promulgating the Rules, that the Rules exceed the plain language of the Patent Act, and that the Rules' ESD requirement hopelessly lacks guidance."

Read the Manbeck declaration here (link).

Also, as reported by Hal Wegner today, an upper-level PTO management member broke ranks today and distributed this article written by Joff Wild from IAM Magazine over the patent bar's reaction to the new rules:

I have been coming to Washington DC for AIPLA meetings since the mid-1990s and I do not think I have ever known an atmosphere like it. It’s not just the shrug your shoulders, here we go again, kind of reaction to a new USPTO rule or guideline that you normally get. Instead, patent practitioners are angry, they are frustrated and they are perplexed . . . it seems to me that the relationship between the USPTO and practitioners is profoundly unhealthy at the moment. That cannot be good for anyone who is interested in the future of the US patent system. There is real venom – sometimes even contempt – in the language I have been hearing from members of the US patent bar over the past few days when they speak about the office. It is actually quite shocking. Fences need mending and they need mending fast.

*** GlaxoSmithKline Sues USPTO Over Continuation Rules ***

View the complaint here (link)

More from the PLI Blog (link)

USPTO Issues "Clarification" on Continuation Rules for Transitional Applications

When the continuation rules were released, some of our more obsessive-compulsive brethren (said with all due respect) have scoured the continuation rule changes line-by-line, and started notating disconnects and irregularities within the rules.

A good example is the National IP Researchers Association (NIPRA), which slavishly cut through the rules (and comments, and FAQ's, and slides!) and exposed a regulatory mistake in 37 CFR 1.114(f) regarding RCE's. In fact, it appeared that the PTO caught this mistake, and quietly modified the slide presentations without further fanfare (to view NIPRA's analysis, click here).

Now, it appears that there is additional confusion over the "one more" provision on continuations filed before November 1, and additional confusion over the requirement for identification of certain applications that are commonly owned and have at least one common inventor. In response to the apparent confusion, the USPTO has published a "clarification" in the OG, which was published yesterday.

As far as the "clarifying" effect goes, the notice fails in spades. Again, it's not that the information is bad - it just takes multiple reads to understand what the notice is trying to say. For example:

The provisions of 37 CFR 1.78(d)(1) in effect on November 1, 2007 are hereby waived to the extent that a continuing application that satisfies the conditions set forth in 37 CFR 1.78(d)(1)(ii), (d)(1)(iii), or (d)(1)(vi) will not be taken into account for purposes of determining whether there is an "other application filed on or after August 21, 2007 that also claims the benefit under 35 U.S.C. 120, 121, or 365(c) of such prior-filed nonprovisional applications or international applications" under the transitional "one more" continuing application provision as set forth in the final rule notice.

The USPTO is waiving the "or within two months of" provision of 37 CFR 1.78(f)(1)(i)(A) for applications filed before November 1, 2007. Specifically, in an application having an actual filing date before November 1, 2007 ("subject application"), the applicant in the subject application is not required to identify any other pending or patented application that does not have the same actual filing date or the same benefit or priority filing date as the subject application, even if the other application has an actual filing date or benefit or priority filing date within two months of the subject application. However, the applicant in the subject application is required to identify any other pending or patented nonprovisional application that has the same actual filing date or the same benefit or priority filing date as the subject application, if the conditions set forth in 37 CFR 1.78(f)(1)(i)(B) and (C) are met.

I'll be slogging through the notice (for the third time) later today, and will have updated posts. In the meantime, enjoy.

Download notice here (link)

UPDATE: Hats off to the Patent Docs Blog, which provides a rundown here (link)

USPTO Releases Draft Form for "Related Applications"

The USPTO has released a draft form (SB 206) for identifying "related applications" under the continuation rule changes. 37 CFR 1.78(f) will become effective on November 1, 2007, and the deadline for complying with the new provisions regarding related applications is February 1, 2008.

To download a copy of the form, click here (link).

Instructions:

Notes

Under 37 CFR 1.78(f)(1), applicant in a nonprovisional application that has not been allowed (37 CFR 1.311) must identify by application number (i.e., series code and serial number) and patent number (if applicable) each other pending or patented nonprovisional application, in a separate paper, for which the following conditions are met:

(A) The nonprovisional application has a filing date that is the same as or within two months of the filing date of the other pending or patented nonprovisional application, taking into account any filing date for which a benefit is sought under title 35, United States Code;

(B) The nonprovisional application names at least one inventor in common with the other pending or patented nonprovisional application; and

(C) The nonprovisional application is owned by the same person, or subject to an obligation of assignment to the same person, as the other pending or patented nonprovisional application.

Under 37 CFR 1.78(f)(2)(i), a rebuttable presumption shall exist that a nonprovisional application contains at least one claim that is not patentably distinct from at least one of the claims in another pending or patented nonprovisional application if the following conditions are met:

(A) The nonprovisional application has a filing date that is the same as the filing date of the other pending or patented nonprovisional application, taking into account any filing date for which a benefit is sought under title 35, United States Code;

(B) The nonprovisional application names at least one inventor in common with the other pending or patented nonprovisional application;

(C) The nonprovisional application is owned by the same person, or subject to an obligation of assignment to the same person, as the other pending or patented nonprovisional application; and

(D) The nonprovisional application and the other pending or patented nonprovisional application contain substantial overlapping disclosure. Substantial overlapping disclosure exists if the other pending or patented nonprovisional application has written description support under the first paragraph of 35 U.S.C. 112 for at least one claim in the nonprovisional application.

Instructions:

(1) In the column on the right, list the numbers of the applications and patents that meet the conditions set forth in 37 CFR 1.78(f)(1)(i). For supplemental lists, please do not list previously submitted applications and patents.

(2) In the first column on the left, place a check mark in the box if the cited application or patent also meets the conditions set forth in CFR 1.78(f)(2)(i) and applicant attached an explanation of how the application contains only claims that are patentably distinct from the claims in the cited application or patent.

(3) Place a check mark in the box in the second column on the left, if the cited application or patent also meets the conditions set forth in CFR 1.78(f)(2)(i) and applicant attached a terminal disclaimer in accordance with 37 CFR 1.321(c).

(4) Place a check mark in the box in the third column on the left, if applicant also attached an explanation why there are two or more pending nonprovisional applications containing patentably indistinct claims. See 37 CFR 1.78(f)(2)(ii)(B).

USPTO Releases Guidelines on Examination Support Docs (ESDs)

Under the revised continuation rules, applicants may submit more than five independent claims or more than twenty-five total claims in an application, only if the applicant files an examination support document (ESD).

The USPTO has published additional guidelines on what is expected from an ESD. The major points include:

1. Preexamination Search Statement: a statement that a preexamination search in compliance with 37 CFR 1.265(b) was conducted, including an identification of the field of search by United States class and subclass and the date of the search, where applicable, and, for database searches, the search logic or chemical structure or sequence used as a query, the name of the file or files searched and the database service, and the date of the search;

2. Listing of References Deemed Most Closely Related: a listing of the reference or references deemed most closely related to the subject matter of each of the claims (whether in independent or dependent form) in compliance with 37 CFR 1.265(c);

3. Identification of Claim Limitations Disclosed by References: for each reference cited, an identification of all the limitations of each of the claims (whether in independent or dependent form) that are disclosed by the reference;

4. Detailed Explanation of Patentability: a detailed explanation particularly pointing out how each of the independent claims is patentable over the cited references; and

5. Showing of Support under 35 U.S.C. 112, ¶1: a showing of where each limitation of each of the claims (whether in independent or dependent form) finds support under the first paragraph of 35 U.S.C. 112 in the written description of the specification. If the application claims the benefit of one or more applications under title 35, United States Code, the showing must also include where each limitation of each of the claims finds support under the first paragraph of 35 U.S.C. 112 in each such priority or benefit application in which such support exists.

NOTES:

• The guidelines "strongly recommend" that applicants include disclosed but unclaimed features that applicant may later claim in the initial preexamination search to avoid the need to update the preexamination search.

• The PTO likes search templates - according to the guidelines, the templates "should be considered when performing a search" (to see the search templates, click here)

• "The Office may consider a preexamination search insufficient if the Office determines that a number of references found in the areas where applicant has searched are more closely related to the subject matter of the claims than those references cited by the applicant."

• Mere text searches aren't enough - "Applicant should note that merely providing a list of the terms used in the text search will not be sufficient."

Download the ESD Guidelines here (link)

NAPP Wants a Piece of Continuation Rule Challenges

The National Association of Patent Practitioners (NAPP - link) released a statement through their president, Ron Reardon, that the organization will be actively monitoring potential challenges to the continuation rule changes, and is urging members to lend a hand in any and all "appropriate" challenges:

As you are probably aware, a lawsuit against the Director of the PTO has been filed by an inventor. (Tafas v. Dudas, E.D. Va., filed August 22, 2007) More suits are likely to follow. We believe that NAPP could be most effective in continuing to express our opposition to the newrules by filing or joining an amicus brief, if a case arose which posed the appropriate question(s) in an appropriate forum.

Any amicus brief filed or joined by NAPP would be above and beyond the significant work that has already been done by our organization in opposing these rule changes; and would be in keeping with our reputation as a serious, thoughtful organization upon whose advice andcomment (whether positive or negative) the PTO can rely.

If you would like to help NAPP, or have any pertinent information, they can be reached at napp@napp.org.

The "5/25 Rule", "Representatitve Claims", and the USPTO

One of the most controversial aspects of the continuation rule changes is the "5/25 Rule", which essentially limits applications to 5 independent claims, and 25 claims total for each application. If an applicant exceeds this amount, an Examination Support Document (ESD) must be filed. There is unanimous consensus over the view that ESD's are too burdensome and costly to be used under most circumstances.

What is interesting is that the 5/25 Rule appears to be worse than the "Representative Claims" approach previously proposed by the USPTO. Ironically, the 5/25 Rule was enacted by the PTO to replace Representative Claims "in response to public comments" (click here). One wonders what comments were being considered when the 5/25 Rule was enacted.

The Representative Claims approach was proposed in the original changes (link), and was rationalized this way: since PTO examination is usually centered around the independent claims and broader dependent claims, there is little benefit in having examiners analyze, search, and cite prior art on narrow dependent claims that the applicants weren't going to respond to anyways.

Warts and all, there was some logic behind this approach - by having applicants specify which claims they wanted to fight over, the examination would arguably be more focused. And because you could specify up to 10 "representative claims," applications could technically have an unlimited number of claims, as long as the independent claims numbered 10 or less. According to the PTO, the pre-selection of 10 claims would only affect 1.2% of all applications:

The Office’s PALM records show that only 2,522 (866 small entity), or about 1.2 percent of all nonprovisional applications, included more than ten independent claims. Thus, this proposal will allow for the examination of every independent claim in 98.8 percent of the applications filed since January 1, 2005, without any additional effort by the applicant.

With the "5/25 Rule", this metric has obvious changed. But how much? the PTO again states:

Under the changes being adopted in this final rule, less than eight percent of the applications filed in fiscal year 2006 would have required either the cancellation of one or more independent claims or an examination support document. In addition, less than twenty-five percent of the applications filed in fiscal year 2006 would have required either the cancellation of one or more dependent claims or an examination support document.

This begs the question: why were the rules amended to encompass more applications and have less flexibility for the applicants? And, is the number of affected applications being underreported?

Dennis Crouch over at Patently-O has done some initial legwork and found the following:

Patent Applications Published on August 16, 2007
More than 25 claims = 27%

Patents Issued on August 21, 2007
More than 25 claims = 18%

While being a tiny snapshot, this initial finding confirms (more or less) the PTO's numbers, but nonetheless reflects almost a twenty-fold increase in the number of affected applications.

But wait, there's more.

In a patent searchers online forum (forwarded by Greg Aharonian), Roy Zimmerman of Medtronic did some digging via IFIPAT on STN, where number of claims are range searchable, and published applications are a defined file segment. He found that, between 2002-06, 1,288,664 patent applications were published by the PTO.

Of those, 372,879 patent applications across all technological areas had more than 25 claims, or 29%.

When it comes to medical devices and pharma, the affected applications jump significantly:

• Medical devices (classes 607 or 623) - 46% exceeded 25 claims
• Pharma (classes 424 or 514) - 43% exceeded 25 claims
• Biotech (class 800) - 47% exceeded 25 claims

Presuming that only 100k of the affected applications require ESD's, filed at a cost of $10k each, this results in one billion dollars of added costs to patent applicants to comply with the 5/25 rule alone.

As a side note, the PTO's proposed annual budget for FY2008 (link) is $1.9 billion dollars . . .

About The USPTO Continuation Rules Webinar . . .

For the many that participated in the USPTO's webinar, the 271 Patent Blog will be providing free ibuprofen (or an analgesic of your choice) for all attendees - email me for a free dose.

All-in-all, the webinar was minimally helpful - for the most part, the webinar was a ver batim read from the USPTO slides (for a copy, click here), delivered in a late-night infomercial format:

(Voice 1): "Could you explain to the practitioners listening out there, if applicants have to show original support for claims in a CIP application?"

(Voice 2): "Yes they do! Under the rules, applicants must identify the claims in a CIP application that are supported by the prior-filed application . . ."

There was some useful information during the Q&A, but it is clear that there is a lot of material to digest before anyone is minimally comfortable with the rule changes. It would have helped if the presentation didn't sugar-coat some of the more serious ramifications of the rule changes (raise your hand if you noticed that some questions weren't actually answered when asked).

For example, regarding the continuation "limit", it was repeatedly stated that, if a continuation was found to be improper, "priority would not be granted, and prior art documents could be considered up to the filing date of the original filing date of the continuation."

It sounds rather innocuous, but the reality is that the application is dead in the water: unless your continuation filing date is less than one year after original publication, your own application will become a 102(b) reference.

One question I wanted to ask was about the petition and showing - "could you provide one or two examples of a proper 'showing' that would justify the filing of an additional continuation?" To be honest, I can't imagine what an applicant could say that would be convincing. The PTO's been eerily quiet on this topic, and apparently has no interest in giving guidance on this.

The other problem was with the Examination Support Documents and their effect on the PTO. Presumably, examiners will be charged with referencing/cross-referencing claims from different applications. If there are families of applications, Examiners will now have to spend time slogging through multiple applications, looking for "substantial overlap", patentably indistinct claims, divisional rejoinders, and potential "15/75" violations before they can even begin to search for prior art. If examiners are already pressed for time in examining applications, I have no idea how they will deal with these changes.

It also appears that cross-referencing applications is now considered a "material" part of USPTO examination. I wonder how McKesson v. Bridge Medical will view the applicant that failed to properly cross-reference all related filings on an issued patent?

Lawsuit Launched in ED Va. To Block Continuation Rules

We heard about the threats, and it didn't take long for someone to follow through. Yesterday, Dr. Triantafyllos Tafas filed a declaratory judgment action in the E.D. Va., arguing that the new continuation rules are null and void, and is also seeking a preliminary and permanent injunction prohibiting the USPTO from putting the new rules changes into effect.

The complaint alleges that the USPTO exceeded its Congressionally-delegated rulemaking authority and that the new rule changes specifically violate Section 120, 132, and 365 of the Patent Act. It is further asserted that USPTO failed to comply with the Administrative Procedure Act in promulgating the new rule changes. The suit also alleges that the USPTO has engaged in retroactive rulemaking and has failed to consider USPTO-induced reasons for multiple continuation filings.

From the complaint:

The Revised Rules should be preliminarily and permanently enjoyed and declared null and void because, among other things, they violate: (1) Sections 2, 120, 13 1, 132 and 365 of the Patent Act (35 U.S.C. §§ 1 et seq.) by exceeding the rule making authority delegated to the Defendants by Congress; (2) Sections 553(c) and 706(2) of the APA (5 U.S.C. §§ 553(c) and 706(2)) by, among other things, purporting to enact rules with retroactive effect; failing to consider all the relevant matter presented as required by 5 U.S.C. §553(c); and, by promulgating rules that are arbitrary, capricious, an abuse of discretion, otherwise not in accordance with law, contrary to Plaintiffs constitutional rights and in excess of the USPTO's statutory jurisdiction and authority; and (3) Article I, Section 8, C1. 8 and the Takings Clause of the Fifth Amendment of the United States Constitution.

Read a copy of the complaint here (link)

And We're Off! Final Continuation Rules Published

From the PTO Summary:

The Office is revising the rules of practice to require that any third or subsequent continuing application that is a continuation application or a continuation-in-part application, and any second or subsequent request for continued examination in an application family, be filed to obtain consideration of an amendment, argument, or evidence, and be supported by a showing as to why the amendment, argument, or evidence sought to be entered could not have been previously submitted.

The Office is also revising the rules of practice to provide that an applicant must provide an examination support document that covers all of the claims in an application if the application contains more than five independent claims or more than twenty-five total claims.

The Office is also revising the rules of practice with respect to multiple applications that have the same claimed filing or priority date, substantial overlapping disclosure, a common inventor, and common ownership.

It's 129 pages long . . . details will follow

Final Rule:

Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications, Final rule (21Aug2007)

Here Come the Continuation Rule Changes!

From the USPTO (link):

USPTO to Publish Measures to Improve Patent Quality

Claims and Continuations Rules will improve effectiveness and efficiency of patent examination

The Department of Commerce’s United States Patent and Trademark Office (USPTO) will publish tomorrow in the Federal Register new rules that will allow the agency to continue to make the patent examination process more effective and efficient by encouraging applicants to use greater precision in describing the scope of their inventions. The new rules will be effective on November 1, 2007.

“Patent quality is the shared responsibility of applicants and the USPTO,” noted Jon Dudas, Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office. “Higher quality applications result in a more effective examination. These rules better focus examination and will bring closure to the examination process more quickly, while ensuring quality and maintaining the right balance between flexibility for applicants and the rights of the public. The U.S. patent system plays a tremendous role in motivating innovation, and these changes to examining patent applications will help ensure that America remains on the leading edge in the knowledge driven global economy.”

The new rules have been modified, relative to the rules that were originally proposed early last year, in response to the extensive comments the USPTO received from the public. Under the new rules, applicants may file two new continuing applications and one request for continued examination as a matter of right. Also, under the new rules, each application may contain up to 25 claims, with no more than five of them independent claims, without any additional effort on the part of the applicant. Beyond these thresholds, however, the new rules require applicants to show why an additional continuation is necessary or to provide supplementary information relevant to the claimed invention to present additional claims.

Placing conditional boundaries on a previously unbounded process provides for more certainty and clarity in the patent process. The result is that application quality will be improved and piecemeal or protracted examination will be avoided, enhancing the quality and timeliness of both the examination process and issued patents.

The new rules are available today to anyone who visits the Federal Register office and will be available tomorrow, August 21, 2007, no later than noon, in the Federal Register column on our News & Notices page . In the coming weeks, the USPTO will be conducting outreach on these new rules to better inform external stakeholders of their content and to answer questions. A webinar on the new rules is scheduled for Thursday, August 23, 2007. More information on this webinar and other upcoming information sessions will be published on Rule Changes to Focus the Patent Process in the 21st Century.

*UPDATE*

From an internal USPTO e-mail:

Highlights of Final Rules on Claims and Continuations:

1. Each initial application is limited to 2 continuing applications and 1 RCE. Additional continuing applications/RCEs may be filed upon petition. This was changed from the proposed rule in which each application was limited to one continuing application.

2. Divisional applications may be filed only in response to a restriction requirement having been made by the Office. Divisional applications may be filed during the pendency of the initial application or any of its continuing applications. In the proposed rule, divisional applications were limited to being filed only during the pendency of the initial application. Each divisional application is also limited to 2 continuing applications and 1 RCE. Additional continuing applications/RCEs of a divisional application may also be filed upon petition.

3. The claims in each application may not exceed 5 independent claims or 25 total claims absent the applicant assisting the examination process through the filing of an Examination Support Document (ESD). This is a change from the proposed rule where an application could be filed with any number of claims but the applicant must elect 10 representative claims for examination absent the filing of an ESD.

4. The applicant must submit the serial numbers of all other applications filed within two months having the same assignee and at least one inventor in common. For those applications that additionally have a common effective filing date and substantially overlapping disclosures, the rule creates a rebuttable presumption of obviousness-type double patenting between them. This will enhance the examination process by saving examiner resources since the examiner will not have to research information that the applicant is in the best position to easily provide prior to examination.

Continuation Rule Changes Update

From the IPO (link):

"At a conference in New York yesterday, a speaker from the USPTO said the new patent rules on continuation applications and numbers of claims are expected to be published in August and in effect in October. IPO believes the rules are likely to be less severe than those that were published for comment in 2006."

From the USPTO (link):

"On July 9, 2007, OMB concluded its review of the Continuations and Claims rule changes. The final rules will be made public when they are published in the Federal Register, which is expected to be later this summer. The rules will become effective at least 60 days after publication in the Federal Register, and no earlier than October 1, 2007"

The abstracts of the rules currently available on the Federal Regulatory Information Web site (link1) (link2) reflects the abstracts of the Continuations and Claims notices of proposed rule-making that were published in January, 2006."

An internal USPTO team is currently working on details of implementing the rule changes. Examiners and managers will be given information and training on the new rules once they are published in the Federal Register. Additionally, management is currently discussing with POPA the appropriate process for negotiating any impacts the rules package may have.

Hell Hath No Fury - Attack Launched on USPTO Continuation Rule Changes

On June 15, David Boundy from Cantor Fitzgerald and Mike Strickland from GlaxoSmithKline appeared at a White House meeting with the Office of Management and Budget (OMB) to discuss the PTO's rules to limit patent applications (link). Attendees included:

• John Love - USPTO
  
• Jennifer McDowell - USPTO
  
• David Rostker - OMB/ Office of Information and Regulatory Affairs (Desk Office covering Commerce Dept)
  
• Lisa Branch - OMB/ Office of Information and Regulatory Affairs, Counselor to Administrator Dudley
  
• Aaron Flynn - Office of Science and Technology Policy
  
• Peter Robbins - Dept of Commerce, Office of General Counsel
  
• Carrol Barnes - Small Business Administration/Office of Advocacy
  
• Rob Alderfer - OMB
  
• Nikesh Jindal - OMB

The conference was in regard to numerous concerns over the implementation of the rule changes, namely:

1. The USPTO’s alleged failure to adhere to the regulatory philosophy and principles of Executive order 12,866 (link)
   
2. The USPTO’s alleged violation of the Information Quality Act and Office of Management and Budget’s implementing guidelines; and
   
3. Significant discrepancies being found between the USPTO’s claimed savings in paperwork burden and the increase in actual burden specifically mandated by the Limits on Claims Rule.

These concerns were summarized in a letter to the honorable Susan Dudley, Office of Information and Regulatory Affairs (OMB), and signed on behalf of numerous organizations and companies that oppose the changes.

• To download/view the cover letter, see here (link)


• To download/view the joining signatories, along with opposition statements (attached as Appendix A), see here (link)

Attached to the letter are numerous exhibits, which contained detailed arguments against the implementation of the continuation rule changes. THe exhibits are arranged as follows

• Appendix A - Public Comments Submitted by Signatories to USPTO on its Notices of Proposed Rulemaking

• Appendix B - The Draft Rules are “Economically Significant” under Executive Order 12,866

• Appendix C - The Draft Rules Are Not Required by Patent Law or Necessary to Implement Patent Law, and are Therefore Impermissible Under EO 12,866 § 1(a)

• Appendix D- USPTO’s Written Rationale is Insufficient

• Appendix E - The Rules Exceed the Authority Delegated to USPTO under the Administrative Procedure Act and Patent Act

• Appendix F - Existing Regulations or Administrative Practices Created or Contributed to the Problems USPTO Seeks to Remedy (EO 12,866 Sec. 1(b)(2))

• Appendix G - USPTO Did Not Rely on the Best Available Scientific, Technical, Economic and Other Information (EO 12,866 Sec. 1(b)(7))

• Appendix H- USPTO’s Claimed Reduction in Backlog Is Unlikely to Materialize

• Appendix I - USPTO Cannot Show that the Proposed Rules are the “Most Cost Effective” Solution

• Appendix J - USPTO’s Promises of Procedural Remedies Against Substantive Harshness are Illusory

• Appendix K - USPTO Failed to Comply with Applicable Information Quality Principles and Guidelines

• Appendix L - USPTO Has Withheld Data and Analysis Essential for Evaluating its Proposals

• Appendix M - USPTO’s Estimates of Paperwork Burden are Invalid and Unreliable (Paperwork Reduction Act)

• Appendix N- Materials Received from USPTO in Response to FOIA Request,
Including Chicago “Town Hall” Slides

• Appendices O-Q - Relevant Statutes/C.F.R./MPEP

To view the attachments (Appendices B-Q), click here (link) (91 pages)

The attachments total hundreds of pages and allege numerous improprieties with regard to the manner in which the continuation rule changes were implemented, including:

- The PTO apparently did not conduct any studies to identify the source of its backlog problem (Appendix C-4, footnote 24);

- The PTO breached its duties of candor and good faith (Administrative Procedure Act, Freedom of Information Act) by failing to disclose its data, assumptions, and models, refusing to provide them when required, and then further refusing to provide them in response to a FOIA request (Appendix C-3, and Appendices L, N(1) and N(2));

- The rationales provided by PTO are insufficient to meet the requirements of Executive Order 12,866 (Appendix D);

- The PTO violated both the Executive Order and Administrative Procedure Act by failing to discuss alternatives to the proposed rules in the Notices of Proposed Rulemaking (Appedix D, Appendix I-1 to I-6);

- The backlog may well be due to internal disincentives provided to examiners, and not any burden imposed on the office by applicants (Appendix F-8 to F-11);

- The Proposed Rulemaking breached statutory obligations, including the Information Quality Act (Appendix K);

- The paperwork burden estimated for the Examination Support Documents (ESD),
which were noted to be extraordinarily burdensome by many of the comment letters, were estimated by PTO to be zero (Appendix M). Interestingly, John Whealan, PTO Solicitor, stated at a Duke Symposium, that "If you want all your claims examined up front, you can have it done, but it's going to cost you, you're going to have to do some work, which in the current law of inequitable conduct, nobody's going to want to do" (Appendix M-6).

To view the FOIA requests click here (link1 - PTO budget, pendency, attrition (79 pages)) and here (link2 - request for files on rulemaking proceedings (continuation, claim examination, IDS) (117 pages)).

It is likely that this material will serve as a basis for a subsequent lawsuit if the USPTO decides to enact the proposed rule changes.

USPTO Submits Modified Continuation Rules for Approval

Apparently, the death of USPTO continuation rule changes has been greatly exaggerated. Reports are coming out that the U.S. Patent and Trademark Office is ready to issue "final rules" on changing continuation application practice. Charles Van Horn provides the following report on Patently-O:

USPTO Commissioner for Patents John Doll announced today at a DC Bar meeting that the final rules on continuation and designated claims practices are at OMB (Office of Management and Budget) for approval. The final rules were logged in on April 10 and OMB is expected to complete its review in 90 days, but frequently grants itself an extension of time. The final IDS rules were said to be on the desk of Director Dudas for approval, and will follow the other two packages to OMB in due course. So at this point in time, July-August would be an approximation for publication of the final rules, with 30 days (based on previous PTO statements) to implementation. No details of the final rules were disclosed.

Commissioner Doll has acknowledged that the overwhelmingly negative responses from the patent bar has forced the Office to "modify" the rules. While the office has been mum about the specific "modifications," some of the rumored changes include (1) increasing the number of continuation applications, and/or providing exemptions for RCE's, (2) changing the "representative claim" proposal for initial examination, and (3) changing the rule that all divisional applications be filed at the same time to retain the initial priority date.

Of course, the USPTO has chosen to forego public comment on the modified changes, so there is reason to suspect that these changes will be just as odious the initial proposal.

Commissioner Doll is scheduled to address the American Bar Association's Intellectual Property Section meeting in Washington over the next three days (April 12-14, Arlington VA).

See earlier 271 Blog Post and continuation rule changes here.

See USPTO FAQ page on proposed changes here.

See Report from the Intellectual Property Owner's Association here.