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Judge enjoins new ‘easier’ patent application rules

The U.S. Patent and Trademark Office tried to reduce the workload of its examiners by enacting rules intended to limit repetitive filings.

However, U.S. District Judge James C. Cacheris in Alexandria ruled earlier this month the proposed rules would go to the substance of the PTO’s work and not just to its procedures. As a result, the rules are null and void because they are “in excess of statutory jurisdiction [and] authority,” Cacheris wrote in entering a permanent injunction in Tafas v. Dudas, (VLW 008-3-135).

The PTO has a substantial backlog as a result of the explosion of patent applications over the last few years. “It’s great that the PTO is addressing the problem, but this isn’t the answer,” said Maya Eckstein, a Richmond attorney who frequently litigates patent cases.

Brian M. Buroker, Eckstein’s colleague in Washington who often prosecutes patent applications, agreed that the rules would do little to address the problem of attracting and retaining good patent examiners. The rejected rules “were designed to make it easier for the patent office administrators instead of dealing with the problems that they face,” he said.

The backlog is part of the reason that Congress has made several attempts to reform the patent system, but its failure to adopt legislation in the area was a factor in Cacheris’ decision.

“[S]ince 2005, Congress has debated and considered whether it should grant the USPTO substantive rulemaking authority but has declined to do so,” he noted.

Federal patent law limits the office’s rulemaking authority to procedural matters, and even those rules can come only after notice-and-comment proceedings, he said.

The PTO contended that the new rules are procedural because they don’t alter the substantive requirements for novelty, nonobviousness or definiteness. Instead, they try to limit repetitive filings by requiring applicants to justify excess filings and to help examiners in their review of burdensome applications.

Even if the procedures have collateral substantive consequences, they are still within its rulemaking authority, the agency insisted.

Cacheris disagreed. In doing so, he outlined the current procedure in which an applicant files a request for a patent that includes a specification, which describes the invention and how to make use of it, and one or more claims, which identify the scope of the legal protection the invention should receive.

A patent examiner then decides whether the claimed invention merits a patent. If the examiner rejects the application, the applicant may appeal to the Board of Patent Appeals and Interferences and from there to the U.S. Court of Appeals for the Federal Circuit. Instead of appealing, the applicant may file a request for a continued examination, or RCE in the language of the office, or apply for a continuation or continuation-in-part.

The advantage to the applicant for seeking continuations and amending claims and providing additional evidence of patentatbility is that the priority date for the original application remains in effect. There is no limitation on the number of such claims that an applicant can make as a matter of right.

The PTO rules would have modified the system in several ways. One, called the “2+1 Rule,” would have limited an applicant as a matter of right to two continuation or continuation-in-part applications plus a single request for a continued examination. The new rule had two exceptions, when an applicant could explain why an amendment, argument or evidence could not have been presented previously or when the petitioner could show that the rule would be waived because the requirement would work an injustice.

Another rule, called the “5/25 Rule,” would have limited an application to five independent claims or to 25 total claims. An applicant could exceed either limitation only by providing an “examination support document,” or ESD.

The “2+1 Rule” and “5/25 Rule” would have been retroactive in some instances, a provision that aroused the ire of companies that had pending applications.

Although the PTO retains the authority to prohibit the use of dilatory tactics in the prosecution of an application, Cacheris said, “the mechanical [“2+1 Rule] adopted here goes far beyond simply prohibiting unreasonable delays. Instead, Final Rule 78 and the hard limit it imposes changes existing law and deprives applicants of their valuable rights under 35 U.S.C. § 120 to an unlimited number of continuation and continuation-in-part applications as a matter of right.”

Likewise, the PTO still has the authority “to reject claims on a case-by-case basis for undue multiplicity,” Cacheris said. “The 5/25 rule, by contrast imposes a mechanical limit of five independent and 25 total claims on every application unless the applicant provides additional information in the form of an ESD.

…“[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,” Cacheris said.

Buroker said, “The decision is the right one because the patent office doesn’t have this authority.”

The prospect for patent law reform, including the possibility of broader rulemaking authority for the PTO remains murky, he said.

In part, that’s because industries that frequently seek patent protection have different interests, he said.

For example, pharmaceutical and biotech companies want strong protection because they want a long period to recover their research and development costs before a drug becomes generic.
On the other hand, some electronic and software companies would be just as happy to do without patent protection because the pace of innovation is faster than the capability of the PTO to analyze patent applications in the field, Buroker said.

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