Federal District Court Judge Blocks Adoption of New Patent Rules; Appeal Likely
April 3, 2008
In a memorandum opinion issued April 1, 2008, Judge James Cacheris concluded that the USPTO had exceeded its rule-making authority in imposing the new rules and granted a summary judgment in favor of Smithkline Beecham Corporation, which had sued to block its implementation. Judge Cacheris had previously issued a temporary restraining order against the USPTO a day before the new rules were to take effect on November 1, 2007. The proposed patent rules were intended to reduce the workload of the USPTO, which now takes an average of thirty-two months to process a patent application.
The new rules proposed by the USPTO would have modified the current structure in at least two significant ways. First, the rules would have limited the number of claims in an application to twenty-five, only five of which might be independent claims. An applicant desiring to present more than this could do so only by filing an additional "examination support document" to aid the USPTO in determining patentability. Second, the new rules would have limited the applicant to a single request for continuing examination ("RCE") and to only two continuation or continuation-in-part applications claiming the benefit of a parent application. To file more than this, the applicant would have been required to file a petition explaining why the proposed amendments or other material could not have been presented previously. Furthermore, these new rules would have applied retroactively to applications that had been filed prior to the date on which the rules were to take effect.
In reaching his decision, Judge Cacheris examined the rule-making authority of the USPTO as granted in § 2 of Title 35 of the United States Code. This section gives the USPTO the authority to promulgate regulations to "facilitate and expedite the processing of patent applications," but Federal Circuit precedent holds that this authority stops short of any general substantive rulemaking power. Because the limitations on the number of claims, RCEs, and continuation applications change existing law and alter the rights of applicants, Judge Cacheris determined that the new rules were substantive as opposed to procedural in nature and thus exceeded the scope of the USPTO's authority. The action by the Eastern District of Virginia blocks the implementation of the new patent rules.
The USPTO is expected to seek permission from the Solicitor General to appeal this matter. Ordinarily, the Solicitor General will vigorously defend the authority of an agency, particularly where, as here, the consequence of an adverse decision is greater workload for the agency. If, as seems likely, the government decides to appeal this matter, the case will be heard by the Federal Circuit. The Solicitor General's success rate on appeal is extremely high. Yet, many industry groups and commentators have criticized the USPTO's rules as unfairly limiting the ability of applicants to obtain adequate patent protection for their inventions while also dramatically increasing the cost of obtaining patent protection. The Federal Circuit routinely considers amicus briefs submitted by private parties emphasizing the broader practical consequences of the issues it is deciding. Clients with particular concern about these new rules might want to consider preparing or joining such an amicus brief.
O'Melveny & Myers LLP provides integrated, comprehensive, and coordinated representation on the most complex patent and technology matters, offering an assembly of top-notch intellectual property and technology lawyers in unmatched combination with one of the nation's preeminent appellate practices. This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Brian Berliner, an O'Melveny partner licensed to practice law in California, and Mark Davies, an O'Melveny counsel licensed to practice law in the District of Columbia, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.
© Copyright O'Melveny & Myers LLP 2008 (all rights reserved)
A federal court in the Eastern District of Virginia has blocked the adoption of new patent rules proposed by the United States Patent & Trademark Office ("USPTO") that would have placed limits on the number of claims allowed per application and on the number of continuation applications allowed to be filed. The USPTO, however, is likely to seek permission from the Solicitor General of the United States to appeal this decision.