By Donald Zuhn --
Last Wednesday, Plaintiffs-Appellees SmithKline Beecham Corp., SmithKline Beecham plc, and Glaxo Group Ltd. (GSK) filed their brief in the Tafas v. Dudas appeal (see "GSK Files Brief in Tafas v. Dudas Appeal"). As we previously reported, the Plaintiffs-Appellees had until September 24th to serve and file their brief. Also filing a brief on that day was Plaintiff-Appelle Dr. Triantafyllos Tafas (see "Brief for Plaintiff-Appellee Triantafyllos Tafas").
As noted in the brief, Dr. Tafas is a founder of Ikonysis, Inc., which manufactures a robotic microscope designed to automatically read microscope slides and provide tentative diagnoses (particularly with respect to early detection of tumors). Interestingly, Dr. Tafas also owns, and is currently prosecuting, several patent applications related to energy recovery from an automobile's internal combustion engine manifold, for use in reducing carbon emissions and resultant global warming.
While the Tafas brief, which comes in at 60 pages, covers some of the same ground covered in the GSK brief, it also serves as a fine compliment to GSK's brief. Tafas begins by listing the facts set out in the Patent Office's brief with which he disagrees. Among the differences, as far as Tafas is concerned, is the Patent Office's contention that "excessive use of continuation and continuation-in-part applications . . . has contributed . . . [to] the 'large and growing backlog of unexamined patent applications.'" Tafas notes instead that one study has "clearly demonstrated, using a queuing model, that the Final Rules' limitations on continuation applications, as well as RCEs, would not reduce the USPTO's backlog." Tafas also notes that another study found that "continuation and divisional filings have remained fairly stable over the past seven years and the major cause of backlog of applications was due to the large number of non-final office rejections being issued per round of prosecution" (in a footnote, Tafas cites to Esther Kepplinger's presentation at last June's BIO International Convention, as reported in an earlier Patent Docs article). Tafas also disagrees with the Patent Office's assertion that "a continued examination filing to correct an error or 'deficiency' in the claims or disclosure constitutes misuse of continued examination practice," arguing, for example, that "there is nothing abusive about obtaining claims of narrower scope from an obstinate examiner, and then seeking broader claim scope later." Tafas further disagrees with the Patent Office's argument that the prosecution process "can continue without end," stating that "[a]s a practical matter, as any application approaches twenty years from the priority date it becomes less and less commercially viable."
As with the GSK brief, Tafas argues that Section 2(b)(2) of the Patent Act does not empower the Patent Office to restrict patent applicants' statutory rights to file multiple continuation applications or claims. In particular, Tafas states that:
Section 2(b)(2) is not an open ended license to the USPTO to re-write the Patent Act to suit its own administrative convenience under the guise of its limited procedural rulemaking authority. Rather, Section 2(b)(2)(A)-(C) merely grants the USPTO strictly procedural rulemaking authority intended to expedite and/or facilitate the processing of patent applications. It does not authorize the USPTO to engage in informal rulemaking which the USPTO admits was calculated to restrict the number of continuation applications and/or the filing of multiple claims, in contravention of numerous provisions of the Patent Act.
The brief continues:
Congress only granted the USPTO limited authority under Section 2(b) of the Patent Act to make rules concerning the processing of patent applications. Congress never delegated authority to the USPTO to re-write other provisions of the Patent Act. There is also nothing to indicate Congress intended to make the USPTO the final interpreter/arbiter, in lieu of the Federal Circuit, as to whether any of the USPTO's Final Rules enacted pursuant to Section 2(b) conflict with other parts of the Patent Act. Thus, the Final Rules, which are substantive in nature, constitute a[n] usurpation by the Executive Branch of Congressional power in violation of the Patent Clause and the constitutional principle of separation of powers.
On the subject of whether the Final Rules (sometimes referred to as the continuation and claims rules) are indeed substantive, Tafas points to a speech given by former Deputy General Counsel and Solicitor of the USPTO John Whealen, where he "confirmed the existence of the Final Rules' substantive effects" by stating that "'[w]hat we have realized is that we are an agency, and we write rules, and we can actually change policy a lot quicker by making some rules that might change the patent system." With respect to whether the District Court "disregarded its obligations under Chevron" for even determining whether the Final Rules were substantive, Tafas responds that:
[S]uch complaint is ill-founded because the District Court would be unable to even reach the question of whether a preexisting right or obligation under the statute was being affected by a rule asserted by the USPTO to be procedural under 35 U.S.C. § 2(b)(2)(A) if it was required to simply defer to the USPTO's self-serving, ipse dixit interpretation that the Final Rules are not substantive.
As in the GSK brief, Tafas reviews the substantive effect of new Rules 75, 78, and 114, which would have limited the number of claims, continuations, and RCEs that an applicant could file as of right. With respect to new Rule 78, Tafas argues that it "is substantive in nature because it removes [an applicant's right under 35 U.S.C. § 120] to obtain priority in a subsequent application if certain new conditions are not met by an applicant filing the subsequent application." Tafas also observes that the interpretation that § 120 allows for an unlimited number of continuation applications is "in accord with the interpretation of former Federal Circuit Judge Giles S. Rich, as set forth in his 1952 commentary as a member of the drafting committee that promulgated Section 120 of the Patent Act: 'Section 120 . . . on careful reading . . . [indicates] that the number of generations of the lineage is unlimited.'"
With respect to new Rule 114, Tafas argues that:
Nothing in Section 132(a) or 132(b) supports the USPTO's assertion that it has the right to set the "conditions and requirements for continued examinations." Clearly, in using the word "shall" and "at the request of the applicant," and in requiring the Director to continue examination if the "applicant persists in his claims for a patent," Congress manifested its intent that RCEs be unlimited, and that continued examination be at applicant's discretion, not the discretion of the USPTO.
Tafas also notes that the Patent Office itself acknowledged that applicants could file unlimited numbers of RCEs when the Office promulgated rules related to such filings following the creation of RCEs under the American Inventors Protection Act of 1999.
Tafas also attacks the Patent Office's arguments concerning new Rule 265, which would have forced applicants to file Examination Support Documents (ESDs) if they wished to prosecute more than five independent or 25 total claims in a single application. Calling the requirement to file an ESD "not only burdensome, but actually an insurmountable barrier for most applicants," Tafas points to the Polestar/Norseman amicus brief for support. In that brief, Dr. Richard Belzer, who served as a civil service staff economist in the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB), calculated that if Rule 265 were to be applied to all applicable applications filed in a representative fiscal year that it "would consume the full time efforts of between 8,000 and 23,000 patent attorneys," with Tafas noting that there are only about 15,000 patent attorneys currently in practice in the United States. Tafas also points again to Mr. Whealen's speech, where he stated that "[i]f you want all your claims examined up front, you can have it done, but it's going to cost you, you're going to have to do some work, which in the current law of inequitable conduct, nobody's going to want to do."
The U.S. Patent and Trademark Office and USPTO Director Jon Dudas now have until October 15th to file their reply brief.
Patent Docs wishes to thank James Nealon of Kelley Drye & Warren LLP for kindly providing us with a copy of Dr. Tafas' brief. In addition, we offer a belated thanks to Christopher Mizzo of Kirkland & Ellis LLP for kindly providing us with a copy of GSK's brief.
For additional information regarding the appeal, please see:
• "GSK Files Brief in Tafas v. Dudas Appeal," September 25, 2008
• "Tafas v. Dudas Update," September 2, 2008
• "Public Interest Groups Back USPTO in Tafas v. Dudas Appeal," August 5, 2008
• "USPTO Files Opening Brief in Tafas v. Dudas Appeal," July 22, 2008
• "Save the Date -- Initial Scheduling of the Tafas/GSK v. Dudas Appeal," May 21, 2008
• "USPTO to Appeal Tafas/GSK v. Dudas," May 7, 2008