CLIENT ALERT — USPTO Rescinds Controversial Rules Restricting Patent Applications
October 15, 2009
Executive Summary
On Thursday, October 8, 2009, under the leadership of new Director David Kappos, the United States Patent and Trademark Office (“PTO”) rescinded the highly controversial proposed Continuation and Claims rules. These proposed rules would have imposed restrictions on the number of continuation applications and requests for continued examination (“RCEs”) per application family and would have also limited the number of claims per patent application. As a result of the PTO’s rescission, the proposed rules will not be implemented, and practice before the PTO will, for now, be unchanged.
In the future, the PTO will likely endeavor through rulemaking to impose other changes to the patent system, with the same aim of reducing its backlog and streamlining the process and timing of patent examination. In addition, the PTO is seeking, and may be granted, the authority to make substantive—not just procedural—rules, which would make future challenges to rulemaking more difficult. Even so, future changes are expected to be less restrictive than the rescinded rules if imposed under the PTO’s current leadership.
Background of Proposed Rules
In the fall of 2007, the PTO was set to implement rules that would have been restrictive of the freedom patent applicants have when applying for patents and also would have imposed additional requirements when an application contains a large number of claims. The proposed rules would have permitted only two continuation applications and one request for continued examination (“RCE”) per application family as a matter of right and would have allowed an applicant to file only five independent claims and twenty-five total claims per application. If more claims were desired, the applicant would have been required to submit a large amount of detailed information to the PTO to assist in the examination of the application. For a detailed description of the rules, click here for our client alert dated October 16, 2007.
A Challenge Was Mounted in the Courts
Shortly before the proposed rules were to go into effect, inventor Triantafyllos Tafas (“Tafas”) and GlaxoSmithKline PLC (“GSK”) each brought suit against the PTO. The U.S. District Court of the Eastern District of Virginia granted Tafas and GSK a preliminary injunction to stop the controversial rules from becoming effective and, in April 2008, further found that the PTO did not have the substantive rulemaking authority to impose the proposed rules and permanently enjoined them.
On appeal, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit concluded that all of the rules except for the rule limiting the number of continuation applications were procedural and within the PTO’s rulemaking authority. In July 2009, however, the Federal Circuit granted a request that the full court of twelve judges rehear the case to reconsider the panel decision. For further information about the history of the litigation proceedings, please click here for our client alert dated March 25, 2009.
The PTO has now filed a motion to dismiss its appeal and has asked the appeals court to vacate the district court’s April 2008 decision. GSK has joined in this motion, while Tafas has not.
Effect on Patent Practice
The rescission of the Continuation and Claims rules is an important development. It ends uncertainty as to whether the proposed rules will be implemented and, if so, when. Current patent practice will not be altered—at least for now. The PTO, however, will likely attempt to impose other changes in seeking to address its, and the public’s, concerns. Exactly how far-reaching such changes will be and whether the PTO will have or be given the authority to impose them is, unfortunately, currently unknown.
The PTO is seeking—and may convince Congress to give it—substantive rulemaking authority through the enactment of so-called patent “reform” legislation, currently pending. On October 5, 2009, U.S. Secretary of Commerce Locke sent a letter to Senators Leahy and Sessions in which he recommended that substantive rulemaking authority should be given to the PTO. Please click here to view Secretary Locke’s letter.
The PTO’s motion to dismiss its appeal and vacate the district court’s April 2008 decision, is consistent with its interest in gaining substantive rulemaking authority. Dismissing the appeal would prevent the Federal Circuit from issuing an opinion that could potentially raise questions regarding the wisdom of granting the PTO substantive rulemaking authority, which might undermine the PTO’s efforts to obtain such authority in the currently pending legislation. And, if those efforts are not successful, vacating the District Court’s decision that the PTO did not have substantive rulemaking authority would allow the PTO to argue at a later time that it did indeed have that authority.
Certainly, if the PTO is given substantive rulemaking authority, challenges to future rules proposed by the PTO will be more difficult. Under the current administration, however, patent applicants may take some solace from the fact that before being appointed Director, David Kappos submitted a declaration in support of GSK’s original challenge to the Continuation and Claims rules. Thus, even if the PTO gains substantive rulemaking authority, future proposed rules under his administration likely will not be as restrictive as the rescinded rules proposed by his predecessor.
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