New England Biz Law Update
A federal trial judge in Virginia recently stymied the U.S. Patent and Trademark Office from revamping the way it administers the U.S. patent system.
Last month, the judge prevented the PTO from enforcing a set of new administrative rules the agency hoped would lead to greater efficiency and improved quality in the patents it granted.
The court’s ruling came as a relief to many, but the PTO has announced that it will appeal the decision.
The proposed new rules were scheduled to go into effect Nov. 1, 2007, despite widespread concern they would make patents too difficult to obtain.
The new rules would have affected all patent applicants, but the pharmaceutical industry would have been especially hard hit. Shortly after the new rules were announced, legal challenges were filed in U.S. District Court for the Eastern District of Virginia by several parties, including Triantafyllos Tafas, an individual inventor, and GlaxoSmithKline, the British pharmaceutical giant.
The consolidated cases are referred to as Tafas v. Dudas. On Oct. 31, 2007, the court ordered that the rules, scheduled to go into effect the next day, be temporarily suspended while the court considered arguments by the parties and numerous amici in advance of a final ruling, which was issued on April 1.
Process over substance
Federal law does not give the PTO substantive rulemaking authority, meaning it was never empowered to set the boundaries of what can be patented. Rather, the PTO is authorized to regulate the process for applying for a patent, and determine whether patent applications meet the requirements defined by federal law.
In the court’s view, the proposed new rules reached beyond the PTO’s administrative authority and, in effect, would have imposed a number of changes on the U.S. patent system that could only have been made by Congress.
For example, the PTO tried to limit the number of “continuing” applications and requests for continued examination (RCEs) an applicant could file in connection with any given patent application. Patent attorneys often use these filings to extend their back-and-forth negotiations with the PTO in their efforts to get patent applications approved after initial filings have been rejected.
Currently, the federal law imposes no restriction on the number of continuing applications or RCEs that can be filed, but the new rules would have made it impossible to file more than two continuing applications and one RCE (the “2+1 rule”) in many cases.
The PTO also tried to limit the number of claims an application could contain, by making it difficult and expensive to make more than a certain number of claims in a given application (the “5/25 rule”).
Applicants who wanted to present more than 25 claims in an application, or more than five independent claims, would have been required to submit an “Examination Support Document” (ESD) before the application was examined.
Preparing an ESD is already a requirement for the PTO’s optional Accelerated Examination program, under which an applicant can request expedited review of a patent application. An ESD provides results of a search for prior art relating to the invention and an analysis of why the invention claimed in the application is patentable – which helps a patent examiner review a patent application.
However, preparing an ESD adds significantly to the cost of completing a patent application. In addition, the PTO often refuses to grant requests for accelerated examination because the ESDs that accompany the requests are deemed to be inadequate.
‘Drastic departure’
The judge found that the 2+1 rule, the 5/25 rule and the requirement for an ESD all were a “drastic departure” from the permissible role of the PTO in examining patent applications, in part because they shift the burden of examining patent applications from the PTO to patent applicants.
The PTO rule changes would change the conditions defined by statute for reviewing patent applications, the judge ruled.
According to the PTO, an increasing number of patent applications for minor variations on basic inventions have been filed in recent years, and patent applications often include excessive numbers of claims to such inventions. The agency says this has crippled its ability to examine patent applications properly and to issue quality patents. The new rules represented the PTO’s effort to remedy the situation.
Frederick A. Spaeth is senior patent counsel with Michaud-Duffy Group LLP, an international intellectual property law firm based in the greater Hartford, Conn. area that serves corporate clients in New England, throughout the United States, and around the world. He can be reached at 860.632.7200 or at [email protected].
