March Madness: Court of Appeals Issues Decision on the Validity of New PTO Rules Half-Time Score: USPTO-3 Applicants-1 (But It's Not Over Yet)
By: Doreen M. Hogle
Hamilton Brook Smith Reynolds Alert
The First Half: The Lead Changes Back and Forth
Final Rule 114 limits the Applicant to one Request for Continued Examination (RCE) per patent application family. (Final Rules 78 and 114 together have been referred to as “the 2 + 1 Rule”).
Final Rule 75 limits the Applicant to five independent claims or twenty-five total claims per application (“the 5/25 Rule”). Applicants who wish to file additional claims must submit an Examination Support Document (ESD).
Final Rule 265 sets forth the ESD requirements. The Applicant is required to perform a prior art search and submit a summary of the search results with an explanation of how the independent claims are patentable over the prior art.
October 31, 2007: Tafas v. Dudas - Applicants Lead
April 1, 2008: Tafas II: Applicants Still Lead
March 20, 2009: Tafas v. Doll - PTO Regains the Lead
The CAFC finds that all four of the Final Rules are only procedural and defers to the PTO’s authority to set procedure in the Office. Once, however, the CAFC makes the threshold analysis determining that the Final Rules are procedural, further analysis is required to determine whether the Final Rules are consistent with the intent of Congress and the Patent Act (Title 35).
The CAFC then determines that Final Rule 78, which limited to two the number of continuing applications that could be filed as Applicant’s matter of right, oversteps the boundary of procedure/substance and is inconsistent with the intent of 35 U.S.C. § 120, which governs the priority rights of continuation applications. Final Rule 78 is therefore invalid.
Final Rules 114 (the RCE Rule), 75 (the 5/25 Rule) and 265 (the ESD Rule) are confirmed as consistent with the Patent Act and therefore valid.
Half-Time Analysis: A Full Court Press to Come in the Second Half
The CAFC vacated the summary judgment decision of the District Court on Final Rules 114, 75 and 265, so the parties can return to the lower court for a trial on the merits based on additional evidence and testimony presented. Either party can request a re-hearing before a panel of all of the CAFC judges (an en banc hearing). Or either party can appeal directly to the Supreme Court.
Prediction of a Final Score: It’s Still Anyone’s Game
The CAFC judges were also very clear in listing the issues they did not decide, including whether ANY of the Final Rules were vague, arbitrary or capricious and, most importantly, whether the Final Rules were impermissibly retroactive.
We’ll know within a few weeks whether the parties will go back to trial, request an en banc CAFC hearing, or appeal to the Supreme Court. Two revised bills on patent reform are again before Congress and some of these issues could still be specifically addressed by legislation.
Don’t change that channel!
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