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

Posted in Opinion Commentary, Practice Commentary by Jake Ward on April 1, 2008

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).


[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.


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.

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