Tafas v. Dudas

Tafas v. Dudas (541 F.Supp.2d 805, E.D.Va., 2008)

FACTS: On January 3, 2006, the United States Patent and Trademark Office (USPTO) issued two separate notices of proposed rulemaking in the Federal Register. These proposed rules delineated changes to the examination process that would limit the number of continuing applications, requests for continued examinations (RCEs), and claims that an applicant could make as a matter of right. The USPTO justified the proposed changes on the ground that the growing number of continuation applications and increasing number and complexity of claims in applications had crippled the USPTO’s ability to examine newly-filed applications. After a four-month public comment period, the USPTO published the Final Rules in the Federal Register on August 21, 2007.

Under the old system, an applicant could file an unlimited number of continuation or continuation-in-part applications, RCEs, and claims. However, the new rules proposed to change this.

Under the new rules, an applicant would have a right to file just two continuation or continuation-in-part applications, plus a single RCE, after an initial application. For an applicant to engage in further prosecution, she would need to either file a “petition and showing” explaining why the new information could not have been presented previously or petition for a waiver of the rule if she can show that the new requirement would work an injustice.

Also, the new rules would permit an applicant to present a total of five independent claims or twenty-five total claims for examination without providing any further information about those claims. Applicants wanting to exceed either limitation would have to provide an “examination support document” (“ESD”) containing information about the claims that would assist the examiner in determining the patentability of the claimed invention.

PROCEDURAL POSTURE: On August 22, 2007, Triantafyllos Tafas and British pharmaceutical manufacturer GlaxoSmithKline (GSK) filed a complaint against Jon Dudas and the USPTO. Tafas and GSK then filed an amended complaint on September 7, 2007, seeking, among other things, preliminary and permanent injunctions prohibiting the USPTO from implementing the Final Rules and a declaratory judgment that the Final Rules violate the Constitution, the Patent Act, and the Regulatory Flexibility Act (“RFA”). On October 15, 2007, GSK moved for a Temporary Restraining Order and preliminary injunction enjoining the implementation of the Final Rules, which the Court granted on October 31, 2007. GSK, Tafas, and the USPTO then filed their respective Motions for Summary Judgment on December 20, 2007, and the USPTO followed on January 22, 2008. Those motions were before the court in this decision.

HOLDING: 35 U.S.C. § 2(b)(2)(A) empowers the USPTO to “establish regulations, not inconsistent with law,” to “govern the conduct of proceedings in the Office.” The USPTO may promulgate regulations that “facilitate and expedite the processing of patent applications” and “govern the… conduct of agents, attorneys, and other persons representing applicants or other parties before the Office.” Under Federal Circuit precedent, however, section 2(b)(2) does not vest the USPTO with any general substantive rulemaking power. That section merely “authorizes the Commissioner to promulgate regulations directed only to ‘the conduct of proceedings in the USPTO; it does NOT grant the Commissioner the authority to issue substantive rules.” Merck & Co., Inc. v. Kessler, 80 F.3d 1549-50.

In this decision, the Court finds that the Final Rules are substantive in nature and exceed the scope of the USPTO’s rulemaking authority. Consequently, the Court granted summary judgment to Tafas and GSK and voided the Final Rules as “otherwise not in accordance with law” and “in excess of statutory jurisdiction and authority.”

UNANSWERED QUESTIONS: Would the Final Rules have expedited the patent application process, which right now forces the average applicant to wait over two years to receive a decision? With patent filings only increasing, does the USPTO have any means by which it can speed up its review of applications?

CRITICAL ANALYSIS: Like the dissent, I’m not convinced that the USPTO’s Final Rules were not of a procedural, rather than substantive, nature. The Final Rules do not implicate any of the core requirements set out in statute (such as novelty, non-obviousness, and definiteness) and seem aimed at simply curbing excess and repetitive filings. Furthermore, the Final Rules do not prohibit applicants from filing more than a certain number of claims or continuations; they merely require additional information from applicants looking to file excessive claims and continuations. I feel like the Final Rules would have helped unclog a congested system that currently cannot hire enough patent examiners to keep its review of patents flowing at an acceptable level.



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