PTO Files Reply Brief in Tafas v. Dudas Appeal

    By Donald Zuhn --

The U.S. Patent and Trademark Office and USPTO Director Jon Dudas filed their reply brief today in the Tafas v. Dudas appeal (a copy of the brief can be obtained here).  We previously reported on the filing of opening appeal briefs by the PTO, GSK, and Dr. Tafas.

The Patent Office begins by arguing that the Final Rules (sometimes referred to as the continuation and claims rules) fall within the Office's rulemaking authority.  On this issue, the PTO asserts that "[i]t is the settled law in this Circuit that USPTO’s interpretation of the Patent Act, made in the exercise of its rulemaking authority under Section 2(b)(2), is entitled to Chevron deference."  The Patent Office also argues that "[a]ll of the rules at issue here come squarely within the terms" of the grant of rulemaking authority in 35 U.S.C. § 2(b)(2)(A), which gives the USPTO the authority to promulgate regulations "govern[ing] the conduct of proceedings in the Office."  In particular, the Office states that:

Rules 78 and 114 establish the number of continuation applications and RCEs an applicant can file before any showing is required.  Those Rules regulate the timing and availability of procedural mechanisms.  They do not regulate the substantive criteria that apply in Office proceedings, and do not address whether an invention is patentable.  The same is true for Final Rules 75 and 265, which require an applicant to file an ESD if his application contains more than five independent or twenty-five total claims.  Those Rules do not impose any limit on how many claims can be presented; they merely require an ESD if the applicant exceeds the prescribed numbers.  Nor do those Rules address or alter the substantive conditions of patentability.

In a footnote, the Patent Office contends that the Final Rules also fall within the Office’s § 2(b)(2)(C) authority to issue rules to facilitate and expedite the processing of patent applications, "because they address [in part] the crippling backlog of unexamined applications," and the Office's § 2(b)(2)(D) authority to govern the conduct of agents, attorneys, or other persons representing applicants "because Rules 78 and 114 are directed, in part, to stemming the misuse and abuse of the prior rules allowing an unlimited number of filings." 

The Patent Office next argues that the Final Rules are consistent with the Patent Act.  With respect to Rule 78 (which would limit applicants to two continuations absent the "requisite showing"), the Office again turns to In re Bogese, 303 F.3d 1362 (Fed. Cir. 2002), a prosecution laches case, for support.  In comparing Bogese to the instant case, the Office notes that:

[W]hile prosecution history laches imposes the penalty of final rejection, Rule 78 does not result in the rejection of any filings:  the first two continuation applications are accepted as of right, and even if a third or subsequent continuation application does not make the showing required by Rule 78, it is still accepted, albeit without the earlier priority date.

Not surprisingly, the PTO's brief glosses over the fact that a "continuation" application lacking the benefit of an earlier priority date would be virtually worthless (i.e., if an applicant could have filed a standalone application, the applicant would have filed a standalone application).  In addition, while the PTO's brief is replete with reminders that the Final Rules create no per se limit on the number of continuations (or RCEs) that an applicant can file, it downplays the height of the "requisite showing" hurdle.

With respect to Rules 75 (5/25 claims rule) and 265 (requiring an Examination Support Document (ESD) when exceeding 5 independent or 25 total claims), the Patent Office contends that "Rule 75 does not limit the number of claims at all, and the ESD requirement for claims exceeding the requisite number is a reasonable imposition."  While the Office acknowledges "[t]hat applicants may be reluctant because of the doctrines of inequitable conduct and prosecution history estoppel to provide information absent a rejection," it states that "[s]uch court-made doctrines cannot affect USPTO’s express authority [under 35 U.S.C. § 132] to issue requirements rather than rejections."

As to whether the Final Rules are impermissibly retroactive, the Patent Office argues that:

[T]he Final Rules are precisely the kind of procedural regulations that do not implicate retroactivity concerns, because they do not change the criteria used by an examiner to evaluate whether an application meets the statutory requirements for patentability, but address only how an applicant must present his application to the Office and what information he must provide.

The Patent Office closes its brief by addressing GSK's argument that the Final Rules impair an applicant's trade secret rights.  According to the Office, "GSK has extinguished its own trade secret rights by failing to ask the USPTO to maintain an application in confidence," noting that "[i]f the applicant asks the USPTO to maintain its application in confidence, then it need never disclose trade secrets."  Such is all fine and well, except for the fact that an applicant wishing to keep its application in confidence must make a non-publication request and agree to forgo securing corresponding foreign patents.

For additional information regarding the appeal, please see:

• "Dr. Tafas Files Brief in New Rules Appeal," September 30, 2008
• "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

Comments

[EG]

Don,

Let's face it, the USPTO hierarchy is delusional in believing it can win this case. The bigger concern is that we may win the "battle" in court and then lose the "war" in Congress next year. Given who's advising Obama (who's looking good now to win the presidency) on IP matters, I shudder to think what might happen in Congress, especially one that is likely to be Democrat dominated.

[Lester Rules]

This is a clear lie:

With respect to Rules 75 (5/25 claims rule) and 265 (requiring an Examination Support Document (ESD) when exceeding 5 independent or 25 total claims), the Patent Office contends that "Rule 75 does not limit the number of claims at all, and the ESD requirement for claims exceeding the requisite number is a reasonable imposition."

Rule 75 operates to prevent applicants from taking allowed claims that have already been examined without an undue burden on the examiner when the number of claims examiner is well withing the low error rate number.

File an application with only 20 claims, say 3 independent and 17 dependent, say 6, 6 and 5 directly depending from each independent claim. All very reasonable and well withing 5/25. So, no ESD is required, nor is it needed....because the ESD is to address the fact that the error rate goes up when the claim count increase.

The examiner very accurately then, finally rejects the 3 independent claims but finds all the dependents to be allowable if placed in independent form.

So, applicant places 17 allowable claims in independent form.... but NO!

That violates 5/25. Applicant must choose only 5 of the 17 allowable claims.

There is no way to file an ESD at this point. Rule 75 requires it to be filed before the First Office Action on the Merits.

Therefore, Rule 75 severely limits the number of claims.