Eagle Robinson and Mark Thomas Garrett
October 9, 2009
The U.S. Patent and Trademark Office (PTO) announced on October 8 that the controversial rules that would have limited the number of patent claims per application, and the number of continuing applications that could be filed, have been rescinded. This withdrawal effectively settles the dispute in Tafas v. Kappos (formerly Tafas v. Doll and Tafas v. Dudas).
The PTO published the final rules at issue in 72 F.R. 46716 on August 21, 2007, and scheduled them to take effect on November 1, 2007. To date, “Congress has not vested the [PTO] with any general substantive rulemaking power . . . .” Merck v. Kessler, 80 F.3d 1543, 1550 (Fed. Cir. 1996). In October of 2007, Tafas and GlaxoSmithKline challenged the rules in the U.S. District Court for the Eastern District of Virginia by arguing that the rules exceeded the PTO’s rulemaking authority and were contrary to law. The district court agreed and preliminarily enjoined enforcement of the rules. The court later invalidated them, holding that they were substantive in nature and inconsistent with several sections of the Patent Act.
In March of this year, a Federal Circuit panel, including Judges Rader, Bryson, and Prost, partially reversed the district court’s decision, and held that the rules were (1) procedural in nature and (2) except for the limit on continuations, consistent with the Patent Act. In July, the Federal Circuit vacated the panel decision and granted rehearing en banc. Additional briefing for the en banc rehearing was scheduled to begin in the coming weeks.
PTO Press Release
The PTO announced that Director Kappos “has signed a new Final Rule rescinding highly controversial regulations, proposed by the previous administration, that patent applicants felt unduly restricted their capacity to protect intellectual property.” PTO Press Release on Patent Rules Package 10/8/09. The PTO also announced that one of the two plaintiffs, GlaxoSmithKline, would join in a motion to dismiss the appeal and vacate the district court’s decision. Id. In its press release, the PTO did not address the merits of the dispute, and instead stated that “[t]his course of action represents the most efficient way to formally and permanently move on from these regulations and work with the IP community on new ways to take on the challenges these regulations were originally designed to address.” Id.
The press release did not comment on whether Tafas, the remaining plaintiff, would join the motion to dismiss the appeal. Dennis Crouch of Patently-O reports that Tafas’s attorney has indicated that Tafas believes the district court’s decision should not be vacated in order to limit the PTO’s substantive rulemaking power.
The PTO’s Rulemaking Authority
The exact scope of the PTO’s procedural rulemaking authority, a highly contested issue in this dispute, remains unresolved. The rescission of these rules may prove to be a tactical decision in a quest for greater PTO rulemaking authority. Despite the PTO’s emphasis that these rules were proposed by the previous administration, the current administration, via Secretary of Commerce Gary Locke, is actively lobbying for substantive rulemaking authority at the PTO:
Current law limits the USPTO Director’s ability to implement needed reforms through the promulgation of administrative regulations. . . . Substantive rulemaking authority would remove doubt raised regarding the USPTO Director's authority to adopt rules in light of Tafas v. Dudas, 541 F. Supp. 2d 805, 814 (E.D. Va. 2008); aff’d in part, rev’d in part, Tafas v. Doll, 559 F.3d 1345 (Fed. Cir. March 20, 2009); vacated, petition for rehearing en banc granted (Fed. Cir. July 6, 2009). Furthermore, substantive rulemaking authority would give the USPTO Director the ability to provide flexibility in the administration of patent rules and procedures. At a minimum, USPTO should have procedural rulemaking authority over proceedings in the agency.
Letter from Secretary of Commerce Locke to Senators Leahy and Sessions (Oct. 5, 2009) (emphasis added). It remains to be seen whether such efforts will be successful.
This article was prepared by Eagle Robinson (email@example.com or 512 536 3083) from Fulbright's Intellectual Property and Technology Practice Group. For additional information, please contact Eagle Robinson or Mark T. Garrett (firstname.lastname@example.org or 512 536 3031).
Mark Thomas Garrett