Tafas v. Doll.

CAFC Finds the USPTO Final Rules Limiting Continuations to Conflict With 35 USC 120, But Final Rules Limiting Claims, RCEs, and ESDs are Within USPTO’s Rulemaking Authority.

(Fed. Cir. 2009, 08-1352)

Triantafyllos Tafas, SmithKline Beecham Corporation, and Glaxo Group Limited (collectively “Appellees”) originally filed suit against the USPTO in relation to Final Rules published by the USPTO that placed new limits on the claims and continuations.  On October 31, 2007, the district court preliminarily enjoined enforcement of the Final Rules.  Appellees then moved for summary judgment that the Final Rules are invalid and sought a permanent injunction against their enforcement.  Appellees’ summary judgment motions alleged that the Final Rules were impermissibly substantive, inconsistent with law, arbitrary and capricious, incomprehensibly vague, impermissibly retroactive, and procedurally defective.  The district court agreed with Appellees that the Final Rules were substantive rules that change existing law and alter the rights of applicants under the Patent Act.   Accordingly, the district court granted Appellees’ motion for summary judgment that the Final Rules are invalid and granted a permanent injunction.  The USPTO appealed to the CAFC. 

Four of the Final Rules 75, 78, 114, and 265 were at issue in the appeal.  Final Rule 75 requires an applicant who submits either more than five independent claims or twenty-five total claims to provide the examiner with information in an examination support document (“ESD”).  Final Rule 78 governs the availability of continuation and continuation-in-part applications.  Under the rule, an applicant is entitled to file two continuation applications as a matter of right.  If an applicant wishes to pursue more than two continuation applications, the applicant must file a petition “showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application.”  If the applicant cannot make the requisite showing, the USPTO will accept the application  for examination but will “refuse to enter, or will delete if present, any specific reference to a prior-filed application.”  Final Rule 114 provides for similar treatment of RCEs, stating that the applicant must file 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.”  The requirements for ESDs are set forth in Final Rule 265.  To comply with Final Rule 265, an applicant must conduct a preexamination prior art search, provide a list of the most relevant references, identify which limitations are disclosed by each reference, explain how each independent claim is patentable over the references, and show where in the specification each limitation is disclosed.

On appeal, the CAFC (majority of panel including Judges Prost and Bryson, with dissent by Judge Rader) concluded that the following USPTO Final Rules are procedural and within the scope of the USPTO’s rulemaking authority.

• Final Rule 75 – Claims – requiring an applicant who submits either more than five independent claims or twenty-five total claims to provide the examiner with information in an examination support document (“ESD”);
• Final Rule 78 - Continuations – requiring a “showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application” for more than two continuations;
• Final Rule 114 – RCEs – requiring a “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” for more than one RCE; and 
• Final Rule 265 - ESDs – this rule setting forth the specific requirements for ESDs.

However, the CAFC further found that Final Rule 78 conflicts with 35 U.S.C. § 120 and is thus invalid.  Section 120 states, in part, that “[a]n application for patent . . . filed by an inventor or inventors named in the previously filed application shall have the same effect, as to such invention, as though filed on the date of the prior application”.  Final Rule 78 would allow the USPTO to accept a continuation application without the requisite showing, but the USPTO would “refuse to enter, or will delete if present, any specific reference to a prior-filed application.”  Accordingly, the effect of Final Rule 78 would be to impermissably remove the application from the scope of 35 U.S.C. § 120, which would otherwise entitle the application to the filing date of the prior-filed application.

The CAFC affirmed the district court’s grant of summary judgment that Final Rule 78 is invalid, vacated the grant of summary judgment with respect to Final Rules 75, 114, and 265, and remanded for further proceedings.

Leaving the door open to further mischief, the CAFC concluded:

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.

Judge Rader notably dissented, stating:

. . .  I would affirm the district court’s conclusion that the PTO exceeded its statutory rulemaking authority in promulgating these rules. For that reason, I concur in part with this court’s ultimate conclusion regarding Final Rule 78, but dissent in part with respect to Final Rules 114, 75, and 265.

This case presents a threshold question about the nature of these rules—substantive or procedural . . . .  Because the Final Rules drastically change the existing law and alter an inventor’s rights and obligations under the Patent Act, they are substantive and the PTO exceeded its statutory rulemaking authority under 35 U.S.C. § 2(b)(2).

JW Note:  See also our previous posts relating to the USPTO Claims and Continuations Rules here.  The saga continues . . . .

Suggestions for Patent Reform in the 111th US Congress.

Most practitioners are well aware that the ill-conceived Patent Reform Act of 2007 died in Congress last year.  Indeed, the bill was widely opposed, and many of us found it surprising that the bill actually passed the House before going down in flames in the Senate. 

Despite, or because of, the full attention that Congress will necessarily be giving to our economic situation this year, some believe that patent law reform will again be addressed by Congress.  Related to this potential reform legislation, some excellent suggestions were posted this week at the IP Watchdog, and are reproduced below for the convenience of our readers:

1. Codify the Duty of Candor

Congress should codify 37 CFR 1.56 because the Federal Circuit refuses to acknowledge the Patent Office defined duty owed by applicants and representatives. This has caused tremendous difficulty with respect to getting the industry on board with Patent Office reforms, and has lead to hostility and resentment coming from the Patent Office and directed at the Patent Bar and industry. The Patent Office wants the best art disclosed only and the Federal Circuit requires everything, so Rule 56 has been mooted by the Federal Circuit because attorneys and applicants know that if a patent issues and becomes a valuable asset the Federal Circuit will have the final word on enforceability and inequitable conduct. Understandably, attorneys and applicants follow the Federal Circuit ruling, regardless of how insane it may be, which seemingly infuriates the PTO hierarchy. This has lead to the Director of the Office of Enrollment and Discipline, Harry Moatz, to threaten in speeches that he will pursue attorneys for ethical violations when they submit to much prior art, and has lead to extreme backlash against Accelerated Examination and the proposed Examination Support Document. Even Judge Rader explained during oral arguments in the PTO claims and continuations appeal that it would be insanity to file an ESD given recent Federal Circuit rulings on inequitable conduct.  For more see Patent Reform Proposal: Codify USPTO Rule 56.

2. Amend 35 USC 103 to Moot KSR v. Teleflex

Congress should modify 35 USC 103 to moot the United States Supreme Court decision in KSR v. Teleflex. In KSR the Supreme Court created a rule that allows for inventions to be patented only when the solution is counter-intuitive. If there was any reason to pursue a particular inventive path that would make the invention obvious and unpatentable, which is nonsensical. If the KSR test is faithfully applied only those that accidentally invent or stumble upon an innovation can get patents, which means that we are now back to the “flash of creative genius” standard that Congress specifically legislated out of the Patent Laws with the 1952 Patent Act re-codification. Luckily, so far, KSR does not seem to be widely used, at least to the full extent that it could be given the language used by the Supreme Court. Nevertheless, the Board of Patent Appeals has said that their reading of KSR is that “obvious to try” is now a valid rejection. It is hard to argue with the Board’s interpretation, although previously “obvious to try” was time and time again said to be a standard that was not the law and a standard that made no sense. With the Patent Office facing extreme backlogs and more than 1.2 million pending patent applications at the end of fiscal year 2008 it can be anticipated that there will be a push to increasingly rely on KSR rejections as the new PTO administration attempts to wrestle with the current patent crisis.

Amending 103 to fix this problem would really be quite simple in reality. The last sentence of 103(a), which the Supreme Court obviously did not read during its consideration of the KSR matter, already says: “Patentability shall not be negatived by the manner in which the invention was made.” One way to modify Section 103 to affect this purpose would be to simply underline that sentence, and perhaps add the parenthetical expression “(we really mean it!)” thereafter. Seriously though, the proper way to amend Section 103 would be to simply add to this last sentence of 103 as follows: “Patentability shall not be negatived by the manner in which the invention was made, and an invention shall be deemed to be obvious only where there is a teaching, suggestion or motivation within the prior art to combine references.” By doing this the Federal Circuit law would be embraced, KSR would be mooted and we would once again have an objective standard rather than a standard based on “common sense.”

3. Codify What Constitutes Unauthorized Practice of Law

Shockingly the Patent & Trademark Office refuses to enforce 37 CFR 11.5(b), which defines prohibited representation practices before the USPTO. The Office refuses to enforce Rule 11.5(b) because they do not feel they have the authority to prevent non-attorneys from representing applications in patent and/or trademark matters. It is ridiculous to have a Rule that the Office will not enforce, particularly when the Office requires those who they recognize as patent attorneys and patent agents to take a Patent Bar Examination. The Patent Office turning the other way is why the invention submission scam has cost independent inventors $300 million annually due to invention scams and fraud. This is an issue that should be easy to reform in Congress given it is unthinkable that any member of Congress or any lobby would have a problem really putting the invention submission industry out of business.

Additionally, unauthorized practice of law is even more widespread on the Trademark Office side of the building. It is impossible to do any search on any search engine for trademarks or trademark applications without finding one of the many large corporations proclaiming that they can file trademark applications for less than law firms and attorneys. LegalZoom.com even proudly proclaims that they file more trademark applications on an annual basis than the top 5 law firms combined. These entities are engaging in the unauthorized practice of law under Rule 11.5(b) and the USPTO is doing nothing to stop them. Either Rule 11.5(b) needs to be removed, the Patent Office needs to drop the requirement that only patent attorneys can represent inventors, the Trademark Office needs to drop the requirement that only attorneys can represent business owners in trademark matters, or Congress needs to force this agency to police itself.

By the way, where are the AIPLA, the ABA, State Bar Associations and the many local Intellectual Property Bar Associations? Newsflash, your members are losing significant business and no one is doing anything about it. It is time for Bar Associations to start representing those who are members. Even if no one wants to protect the public, which really ought to be the motivation here, Bar Associations need to protect members and get involved!  For more see Sadly, Invention Submission is Alive and Well.

4. Patent Office Ombudsman

Government Officials seem to be in love with the idea of a Czar for everything. We will soon have an Auto Czar, we have a National Security Czar, and I think we ought to have a Patent Czar that takes the form of an Ombudsman. Given that the Patent Office leadership seems to so frequently lack knowledge in the area of patent practice and procedure, and given that Congress and other politicians presumably listen to these perhaps well meaning yet uninformed officials, what is really needed is an independent and knowledgeable Ombudsman-type that can comment on everything that goes on in the Patent Office. Any time that the Patent Office sends anything to Congress, anything up through the Department of Commerce or to the Office of Management and Budget a report from the Ombudsman would accompany the Patent Office information. Similarly, any time legislation is proposed that impacts innovation and/or the Patent System the Ombudsman would create an independent informational report. Of course, this Ombudsman should be required by law to be a patent attorney with a certain number of years experience. Not that this will solve the problems, but at least those who care in government could become informed of the real ramifications of their decisions should they be so inclined to listen.

5. Move to Regional Patent Offices

As only the federal government could do, they built a brand new Patent Office building that wasn’t large enough even as of the day it opened. As sad as that is it presents opportunities. The main corporate headquarters for the Patent Office stays in the Washington, DC area, and rather than the stay at home work program, which has Examiners conducting interviews with barking dogs and whining children in the background, we move to regional Patent Offices. This has enormous benefit for multiple reasons, but first and foremost is the ability to hire more people with better skills. Let’s face it, there are only so many adequately trained and educated people who are willing to live within commuting distance of Alexandria, Virginia. The price of living and the traffic alone make choosing a career as an Examiner exceedingly difficult these days even though Examiners are paid extremely well by government standards. Additionally, by locating Patent Office strategically around the country Uncle Sam could actually participate in the revitalization of certain communities, which ought to fit right in with the Obama agenda and stimulus packages that Congress will consider later this winter.

6. Legislatively Mandate that PTO Leaders be Patent Attorneys

Unfortunately, the United States Federal District Court for the District of Columbia decided in 2008 that 35 U.S.C. 3was nothing more than an aspiration when it decided that the challenge to the appointment of Margaret Peterlin was dead on arrival despite the fact that she had no relevant experience. In effect the District Court ruled that the fact that the Director and Deputy are to have “experience” is not something that can be enforced because the standard is too vague for court review. With that in mind, Congress should amend 35 U.S.C. 3 to mandate that the Director, Deputy Director and Commissioner, at a minimum, all have a certain number of years of patent experience prior to being eligible for appointment to the Office. Section 3 needs to have a definite and concrete definition with respect to the experience that is appropriate so that district courts can determine whether an appointment is appropriate. The Patent Office can no longer function with politically expedient appointments for those who are looking to stay in government employment. The Patent Office needs top level leadership that understand the patent system and innovation. If we can require that the President be born a U.S. citizen and needs to be at least 35 years old we should be able to tighten up this statute to make sure that people running the Patent Office are actually competent and knowledgeable.

7. Legislatively Create a Non-examined Patent

Congress should enact a new patent right that is based on registration, not examination. This non-examined patent should not be entitled to the presumption of validity, or perhaps is entitled to a shallow presumption of validity (i.e., preponderance of the evidence standard). Those inventions that are likely not to be commercially viable will find themselves being subject to registration rather than examination, thereby opening up examining resources to allow Examiners more time to adequately examine those “real” inventions that are seeking the presumption (or higher presumption) that attaches to the examined patent. This more than anything will help solve the crisis created by an ever increasing backlog of unexamined applications. It will also allow the Patent Office to provide more time per application for examiners to review those applications seeking a presumptively valid patent. This will cut down on the number of questionable examined patents that issue, which ought to have extremely positive effects on cutting down on the so-called patent troll problem because those patents that issue through examination will be of a higher quality across the board. Another extremely positive aspect of this is that it would be revenue neutral and have absolutely no impact on the Patent Office budget. Fewer examiners would be able to do more work, and the work done would be of a higher quality.

While we believe that each of these suggestions have merit, we believe suggestions #2, #4, #5, and #7 would go a long way in fixing the U.S. patent system.  We also heartily agree with Gene’s suggestion #7.  See a recent related AT! post here, in which we propose that Congress enact a U.S. utility model law, for example. 

Maybe it is time for patent practitioners to rise to the occasion and educate our respective Senators and Representatives about what will constitute meaningful reform to the patent system.   The lobbyists certainly are not pushing effective reform ideas.  Any thoughts or further suggestions from our readers?  Comments are welcomed.

Scheduled CAFC Oral Arguments in USPTO v. GSK & Tafas – December 5, 2008.

The CAFC hears oral arguments tomorrow, December 5th, in relation to the ruling in Tafas v. Dudas; SmithKline Beecham Corp. v. Dudas, which permanently enjoined the USPTO’s claims and continuations rules.  In permanently enjoining the claims and continuations rules, Judge Cacheris held that the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and that the claims and continuations rules are substantive in nature.

Gene Quinn at IPWatchdog has nicely summarized the chronology of events leading to the present appeal here.  Further background on this case from AT! may be found here.

The Little Shop of Patent and Trademark Horrors.

 

In surfing for a Halloween-themed TIW? patent this morning, we happened across the following USPTO website, titled The Little Shop of Patent and Trademark Horrors.

At first blush, one might think this is a clandestine USPTO department responsible for scaring practitioners and developing ghoulish regulations, such as the presently enjoined claims and continuations rules (did you feel the room just get colder?).

However, the website is actually part of the USPTO Kids’ Pages, designed to generate interest amongst K-12 students in patents and trademarks.  It appears to have games, puzzles, and other fun and creative links for kids to explore.  If you know a teacher, or have kids of your own, this might be a fun website to check out.

Tafas v. Dudas; SmithKline Beecham Corp. v. Dudas – Permanent Injunction Granted.

Defendants Jon W. Dudas and the United States Patent and Trademark Office are permanently enjoined from implementing the Final Claims and Continuations Rules.

The opinion of Judge James C. Cacheris in the Eastern District of Virginia may be found here.  The order permanently enjoining the USPTO may be found here. 

GSK and Tafas brought suit against the USPTO to permanently enjoin the USPTO from enacting the USPTO’s final claims and continuations rules.  GSK and Tafas claimed that the rules were unlawful agency action under Section 706(2) of the APA and should be declared null and void.  The USPTO argued that the Final Rules were entirely lawful and that it should be permitted to go forward and implement the rules. More details on the background and specific rules changes may be found at our previous posts here, here, here, and here.  The Patent Docs have some exceptional background on the litigation, including copies of briefs filed, here.

In a well-written opinion, Judge James C. Cacheris rested his determination on the single dispositive issue of whether the USPTO is empowered to  establish the final claims and continuations rules under 35 U.S.C. § 2(b)(2), which allows the USPTO to “establish regulations, not inconsistent with law,” to “govern the conduct of proceedings in the Office.”

Judge Cacheris first noted that, even though the APA does not define a “substantive rule,” any rule that “affect[s] individual rights and obligations” has been deemed substantive by the courts.  With this understanding, Judge Cacheris found:

Though [the new contination rule) does not completely prohibit applicants from filing more than two continuation or continuation-in-part applications, because the USPTO intends to deny additional applications in almost all circumstances, . . . the “could not have been submitted” standard of the petition and showing requirement effectively imposes a hard limit on additional applications.  (Emphasis ours).

and 

[T]he ESD requirement changes existing law and alters the rights of applicants under the current statutory scheme by shifting the examination burden away from the USPTO and onto applicants. . . .  [T]he Federal Circuit has stated that applicants have “no duty to conduct a prior art search” and “no duty to disclose art of which an applicant could have been aware. . .” .  In addition, Sections 102 and 103 provide that “[a] person shall be entitled to a patent unless” the claimed invention lacks novelty or is obvious in view of the prior art, 35 U.S.C. §§ 102 and 103, and Section 131 states that the USPTO “shall cause an examination to be made of the application”. . . . The Federal Circuit has read these provisions as placing the burden of examination and the burden of proof to make a prima facie case of unpatentability on the USPTO.

thus 

The 2+1 Rule and the 5/25 Rule, which limit continuing applications, RCEs, and claims, and the ESD requirement, which shifts the examination burden onto applicants, constitute a drastic departure from the terms of the Patent Act as they are presently understood. By so departing, the Final Rules effect changes in GSK’s and Tafas’s existing rights and obligations.

Accordingly, the Judge Cacheris held: 

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).

Hat tip to the Patent Prospector.

Tafas v. Dudas; SmithKline Beecham Corp. v. Dudas – Hearing Today.

The Summary Judgment hearing for Tafas/GSK v. USPTO in U.S. District Court (E.D. Virginia) is scheduled for today, Friday, February 8, 2008, at 10:00 AM.  As previously posted by AT!, the litigation is related to the USPTO’s proposed claims and continuations rules and a preliminary injunction of the rules is presently in place.  See here, here, here, and here.  The Patent Docs have some exceptional background on the litigation, including copies of briefs filed, here.

Some are speculating that a decision from Judge James C. Cacheris may be rendered from the bench today.  The PLI Blog will be report-blogging on the case throughout the day.  Stay tuned.

JW Update (2/8/08 – 2:05PM) – Per Gene Quinn at the PLI Blog, the court has taken the matter under advisement and has recessed for the day.  A decision is expected within the next few days to weeks.

Patent Reform Act of 2007 – Initiatives Relevant to Prosecution.

 

Considering the likelihood that we may actually see the Patent Reform Act of 2007 become a legal reality this year, this post highlights initiatives in the bills presently before Congress that may be of particular interest to patent prosecutors.  Much of the following information may also be found in the CRS Report and the Senate Committee Draft Report previously commented on by the AT!.

First-Inventor-To-File:

In an effort to harmonize U.S. law with the rest of the world, the U.S. would shift to a “first-inventor-to-file” from the present “first-to-invent” system in determining which individual has a right to a patent on an invention.  Under the “first-inventor-to file” system, an inventor who first files an application at the patent office will be presumptively entitled to the patent.  Unlike the present “first-to-invent” system, whether the first applicant was actually the first individual to complete the invention in the field will be irrelevant. 

The shift will also eliminate “interference” proceedings.  Interferences are complex and costly administrative proceedings that, although not commonly used, allow the Patent Office to determine the true first inventor of a contested invention.

Notably, the “first-inventor-to-file” system will still prohibit derivation where one individual copies another individual’s invention and then races to the patent office to file first.  To prevent individuals from obtaining patents on inventions obtained by derivation, both bills provide for an “inventor’s rights contest” that will allow the Patent Office to determine which applicant is entitled to a patent on a particular invention.

One-Year Grace Period:

Under current U.S. law, a public disclosure of an invention, such as a public use, sale, or publication thereof, starts a one-year clock running in which an inventor must file a patent application or the invention is dedicated to the public domain. 

According to the present bills, and potentially contingent upon a reciprocal change to European and Japanese patent laws, disclosures will qualify as prior art if they were made by 1) the inventor more than one year before the patent application’s filing date; or 2) a third party prior to the filing date and prior to the inventor’s disclosure.  Thus, an inventor would still be protected from losing a right to a patent by the inventor’s own disclosure.  However, the grace period would not protected the inventor from an earlier disclosure of a third party.

Assignee Filing:

Presently, only an inventor may make an application for a patent.  An inventor is also required to declare by appropriate oath or declaration that he or she is the “original and first inventor”.  The proposed S.1145 initiative allows, however, that a “person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent.”  Thus, an assignee-company would be able to file a patent application on behalf of an inventor-employee having an obligation to assign to the company.

Post-Grant Review:

Post issuance review of an issued U.S. patent is currently conducted by reexamination proceedings (available both in ex parte and inter partes types).  To initiate a reexamination, any individual may cite art that raises a new and substantial question of patentability with respect to the issued patent.  For a variety of reasons not discussed here, however, reexamination proceedings have been sparingly used.

The present bills would provide a “post-grant review” proceeding that would begin, for example, within 12 months of the date the patent was issued.  The proceeding would give the patent owner an opportunity to amend to overcome any issues raised.  Importantly, a decision from the Patent Office would be required within one year of commencement of the review, and any patent left standing would be protected from a reassertion in other legal proceedings of the issues raised during post-grant review.

Pre-Grant Publications:

Most patent applications presently publish 18 months after filing, although an applicant may decide to opt out of publication as long as the applicant certifies that the invention will not be the subject of a foreign patent application.  The House and Senate bills would eliminate a possibility of opting out of pre-grant publication.

Pre-Issuance Art Submission:

Under the current law, a protest may be filed by any member of the public against a pending application under certain, and very narrow, circumstances (i.e., prior to the first of the date the application was published or the mailing of a notice of allowance).  Under the proposed initiatives, any person would be able to submit patent documents and other printed publications to the Patent Office within the later of 1) an issuance of a notice of allowance,  or 2) six months after pre-grant publication or the rejection of any claim in the application.  The submission would have to include a concise description of the relevance of each submitted document.

Tax Planning Method Patents:

Under the House proposal, tax planning method patents would be banned.  See the previous AT! post on tax-related patents here.

Mandatory Search Reports (aka Applicant Self-Examination):

Applicants are presently under a duty of disclosure to the Patent Office to indicate any art of which they are aware that may be material to patentability.  See a previous AT! article on the duty of disclosure here.

The Senate bill would also require that “applicants submit a search report and other information and analysis relevant to patentability”.  As compliance with this requirement would be costly (not even to mention the potential for inequitable conduct ramifications), an applicant would be exempted if it would qualify as a “micro-entity”.  This determination would be based on an enumerated list of factors including: income level; number of patent applications filed; small entity status; and assignment activity.

Inequitable Conduct:

See the previous AT! article on inequitable conduct here. 

The H.R. 1908 bill would provide that a holding of inequitable conduct is appropriate only if the patentee, its agents, or another person with a duty of disclosure to the USPTO intentionally misrepresents or fails to disclose material information, such that the USPTO would “have made a prima facie finding of unpatentability.”  S. 1145 would provide that information is material if it is not cumulative to evidence already before the Examiner, and “a reasonable patent examiner would consider such information important in deciding whether to allow the patent application.”  The standard for proving inequitable conduct would be set at “clear and convincing”.

USPTO Rulemaking Authority:

The Patent Office is currently limit to establishing regulations that govern the conduct of proceedings before it, and the recognition and conduct of patent attorneys.  The Senate bill would further grant the authority to “set or adjust by rule any fee established or charged by the Office”.  The House bill would authorize the Patent Office to “promulgate regulations to ensure the quality and timeliness of applications and their examination”.  The language of the House bill could greatly affect the Patent Office’s proposed claims and continuations rules presently being litigated, and that have been enjoined from becoming effective pending the outcome of the litigation.  See AT! post on the claims and continuations rules here, here, and here.

JW Note:  We would be greatly interested in hearing about the concerns of our practitioner-readers relating to the legislation.  Leave your comments as you may!

GSK Comments During Public Comment Period.

A question was raised earlier today by an AT! reader as to why GSK waited until the “last minute” to raise the issues of the present suit against the USPTO?  We thought this an excellent question.

The AT! notes that GSK did submit comments during the public comment period for the USPTO’s consideration.  GSK’s comments may be found here.   

Upon review, a number of the comments are strikingly similar to the arguments made in the GSK complaint.  For example, see the below excerpt from the Executive Summary of GSK’s comments:

(May 2, 2006)

While GSK appreciates the position in which the Patent Office currently finds itself, GSK must oppose the proposed rulemaking because: (1) the Patent Office lacks authority to implement the proposed rulemaking; and (2) even if the Patent Office were to have authority, the proposed rulemaking will not work to meet the stated goals of the Patent Office of reducing workload and improving quality of examination. If the Patent Office decides to enact the proposed rules despite the lack of authority to do so, GSK requests consideration of alternatives, such as those discussed below. The proposal of  alternatives by GSK should not be viewed as an admission by GSK that the Patent Office has the authority to enact any of the proposed alternatives or even that GSK views the alternatives as rendering the proposed rules acceptable. GSK reserves the right to challenge any final rules through the appropriate legal channels.

At a minimum, GSK submits that the following points should be considered when revising the proposed rulemaking: (1) clarify sufficient showing for additional continuation/RCE; (2) provide a non-limiting list of reasons allowed for filing additional continuations or RCEs; (3) revise standard for obtaining additional continuations/RCEs; (4) draw a distinction between RCEs and continuations; (5) do not make the proposed  rules retroactive; (6) allow divisional applications to claim priority to parent; (7) consider allowing for deferred examination; (8) clarify what is meant by language of proposed 1.78(f)(1); and (9) clarify what is meant by “substantial overlapping disclosure” in proposed 1.78(f)(2).

As the Patent Office has been most solicitous of comments regarding ways to improve the proposed rules rather than comments attacking the rules as unworkable, the body of these comments is organized to focus first on proposed alternatives, followed by an explanation of the reasons that the Patent Office lacks authority to enact the proposed rules as well as reasons that the proposed rules will not be effective to meet the stated goals of the Patent Office.

(Emphasis mine).

These and the many other comments submitted during the comment period apparently did not sway the USPTO significantly, as evidenced by the promulgation of the new claims and continuations rules package (now temporarily enjoined).  Your comments are always welcomed here, however, so feel free to leave us your thoughts!