Tafas v. Dudas, No. 07CV846 (E.D. Va.) (filed Aug. 22, 2007)
By Robert Dailey --
Dr. Triantafyllos Tafas, a Connecticut inventor, has asked a Federal District Court to prevent the PTO's new continuation rules from taking effect. Tafas is the named inventor on 18 pending patent applications, and asserts that he will suffer injury when the new rules become effective on November 1 of this year. (Tafas is the founder of Ikonisys, Inc.)
Tafas primarily objects to the PTO's changes to 37 C.F.R. § 1.78. First, the new Rule 78 places limitations on the filing of third and subsequent continuing applications (including divisionals and CIPs). If third and subsequent continuing applications fail to comply with the strictures of the new rule, the PTO can deny the patentee the benefit of the earlier filing date. Second, the new Rule 78 contains additional requirements for patentees who file multiple applications having overlapping disclosures within two months of each other. In addition, Tafas objects to the changes to Rule 75 that require patentees to submit additional documentation when an application has more than 5 independent claims or 25 total claims.
Tafas claims that the new rules offend the Constitution, the Administrative Procedure Act (APA), and the Patent Act.
Constitutional arguments
His Constitutional attack is two-pronged. On the first prong, he argues that the new rules violate Article I, Section 8, Clause 8 because they fail to promote the progress of science and the useful arts. This argument likely misses the mark. The Clause, after all, simply grants Congress the power to create a patent system without ever requiring that Congress create patent rights of any kind.
On the second prong, Tafas argues that the new rules violate the Takings Clause of the Fifth Amendment. The rule changes will likely increase the costs of patent procurement, and will place a higher value on obtaining competent patent counsel. This is especially true for patentees who drafted pending applications under the belief that the PTO would grant an unlimited number of continuations. But these additional burdens are probably too speculative and indirect to form the basis of a Takings Clause violation.
Statutory arguments
Tafas asserts a host of violations of the APA and the Patent Act. Although the complaint fails to flesh out these arguments in detail, one line of reasoning seems particularly persuasive. In the following paragraphs, I have attempted to lay out the rough details of this argument.
Section 120 of the Patent Act provides that:
An application for patent for an invention disclosed in the manner provided by the first paragraph of section 112 . . . in an application previously filed in the United States, . . . which is filed by an inventor or inventors named in the previously filed application shall have the same effect, as to such invention, as though filed on the date of the prior application, if filed before the patenting or abandonment of or termination of proceedings on the first application or on an application similarly entitled to the benefit of the filing date of the first application and if it contains or is amended to contain a specific reference to the earlier filed application.
Furthermore, Section 132(b) provides that:
The Director shall prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant. The Director may establish appropriate fees for such continued examination.
Section 706(2)(A) of the APA (5 U.S.C. § 706(2)(A)) requires a reviewing court to set aside any agency action (i.e., PTO rulemaking) that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."
Section 120 of the Patent Act broadly grants priority to continuing applications with the exclusive requirement that an earlier-filed application be co-pending. Under the new Rule 78, filers of third and subsequent continuing applications could face a loss of priority in certain situations. Therefore, the new rule appears to deny priority under circumstances where the Patent Act expressly grants priority. Under this analysis, the PTO's new Rule 78 would not be in accordance with the patent laws established by Congress.
Moreover, Section 132(b) requires that the PTO examine all continuing applications, and grants the agency authority to establish appropriate fees. Yet the new Rule 78 would permit the PTO to avoid examining some third and subsequent continuing applications. This too reveals a possible contradiction between the new Rule and the patent laws. Section 132(b) nowhere permits the PTO to withhold examination of an application that otherwise complies with the statutory requirements of the Patent Act. The PTO can only ask for more money; it cannot toss the application into the trash.
Of course, the PTO may argue that Sections 120 and 132(b) are simply silent regarding the issues encompassed by new Rule 78. Thus, the PTO only needs to show that its new rules are not arbitrary and capricious. In short, Tafas' success will likely depend on how broadly or how narrowly the courts interpret Sections 120 and 132(b).
Tafas has requested that the District Court hear arguments on his motion for a preliminary injunction within the coming weeks.
- Tafas' complaint can be viewed here.
- Tafas' motion for a preliminary injunction can be viewed here.
- The declaration of Tafas accompanying the PI motion can be viewed here.
Robert Dailey, Ph.D., is a physical chemist and regular Patent Docs contributor. Dr. Dailey, who recently completed his studies at the University of North Carolina School of Law and passed the patent registration exam, will be joining MBHB this fall.
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