By Donald Zuhn and Benjamin Huber --
Last Friday, the U.S. Patent and Trademark Office and USPTO Director Jon Dudas filed their opening brief in the Tafas v. Dudas appeal. As we previously reported, the Patent Office and Director Dudas had until July 18th (i.e., sixty days from the May 19th docketing date) to serve and file their opening brief. The Appellees -- Dr. Triantafyllos Tafas and SmithKline Beecham Corp., SmithKline Beecham PLC, and Glaxo Group Ltd. (GSK) -- now have until August 27th, absent any extensions, to file their brief.
By now, many patent practitioners are probably quite familiar with the sequence of events that led to the Patent Office's appeal. Briefly, Dr. Tafas and GSK sought to enjoin the Patent Office from enforcing its new continuation and claims rules package, which was published last August. The day before the rules package was set to take effect (strangely enough, on Halloween), Judge James C. Cacheris of the Eastern District of Virginia granted Dr. Tafas' and GSK's motions for a temporary restraining order and preliminary injunction.
Last April (this time on April Fool's Day), Judge Cacheris made the injunction permanent, finding that "the [continuation and claims] Rules are substantive in nature and exceed the scope of the USPTO's rulemaking authority under 35 U.S.C. § 2(b)(2)," Judge Cacheris voided the new rules. Citing Merck & Co., Inc. v. Kessler, 80 F.3d 1543, 1550 (Fed. Cir. 1996), and two other CAFC cases that cite Merck, Judge Cacheris determined that the relevant case law was clear: "Section 2(b)(2)'s authority is limited to rules governing the 'conduct of proceedings' before the Office, the USPTO does not have the authority to issue substantive rules, and it does not have the authority to make substantive declarations interpreting the Patent Act." Judge Cacheris also determined that the continuation and claims rules were "substantive rules that change existing law and alter the rights of applicants such as GSK and Tafas under the Patent Act," and "constitute a drastic departure from the terms of the Patent Act as they are presently understood." Judge Cacheris concluded his opinion by offering a thorough explanation as to why the cornerstones of the continuation and claims rules -- the 2+1 rule and 5/25 rule -- were indeed substantive rules (see "No April Fool's Joke -- Tafas and GSK Win on Summary Judgment").
In its opening brief, the Patent Office makes two main assertions: first, that the Office acted within its rulemaking authority, and second, that the continuation and claims rules do not violate the relevant statutory provisions. While the assertions themselves are unsurprising, the approach taken by the Patent Office represents an intriguing departure from the framework adopted by Judge Cacheris' opinion, and reveals at least a portion of the Office's appellate strategy. Where Judge Cacheris focused mainly on the substantive nature of the continuation and claims rules, and explicitly avoided a determination regarding whether the Patent Office was entitled to any deference, the Office relies heavily on its belief that Chevron deference places the continuation and claims rules beyond reproach (Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)).
By asserting that it is entitled to such deference, the Patent Office is attempting to shift the focus of the appeal towards the language of 35 U.S.C. § 2 and away from the likely effects of the continuation and claims rules. In the Office's view of Chevron deference, the important question in the appeal is not whether the continuation and claims rules are procedural or substantive, but instead whether the rules fall within a permissible interpretation of the Patent Act. Further, the PTO's brief does not stop at the notion that the Office is entitled to deference in the promulgation of the continuation and claims rules themselves. Rather, the Patent Office argues that its own, expansive interpretation of the scope of its rulemaking authority, and its determination that the continuation and claims rules do not violate other provisions of the Patent Act, are both entitled to deference. As such, the PTO's primary argument essentially asserts that the Office can decide that it has the authority to promulgate a set of rules, put those rules into effect, and declare the rules commensurate with any potentially adverse limitation imposed by statutes while remaining largely unchecked by the judiciary.
Apparently not content to use Chevron deference as a shield, the Patent Office also uses deference-based arguments to attack Judge Cacheris' opinion. The Patent Office rejects outright Judge Cacheris' ruling that the continuation and claims rules fall outside the scope of the Office's rulemaking authority, asserting that the rules fit "comfortably within the terms of Section 2(b)(2)," because they merely govern the conduct of proceedings in the Office and facilitate the processing of patent applications. Beyond simply challenging Judge Cacheris' view of the PTO's rulemaking authority, the Office asserts that Judge Cacheris erred by refusing to adopt the Office's own, conveniently broad view of its rulemaking authority.
For information regarding this topic, please see:
• "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
• "No April Fool's Joke -- Tafas and GSK Win on Summary Judgment," April 1, 2008
• "Judge Cacheris Takes GSK Case under Advisement," February 8, 2008
• "GSK Summary Judgment Hearing Set for Friday Morning," February 7, 2008
• "New Briefing Deadline Set In PTO Rules Case," December 18, 2007
• "Court Sets Summary Judgment Schedule in New Rules Case," December 3, 2007
• "No Discovery in New Rules Case," November 27, 2007
• "Tafas v. Dudas; SmithKline Beecham Corp. v. Dudas (E.D. Va. 2007)," October 31, 2007
• "USPTO Late to Its Own Party," October 31, 2007
• "GSK Secures Injunction," October 31, 2007 (includes links to Court's Order and Opinion)
• "GSK TRO/Preliminary Injunction Hearing," October 29, 2007
• "GSK Brings Out the Big Guns Opposing the New Continuation and Claims Rules," October 24, 2007
• "Hooray! - (Finally) the Big Dogs Have Joined the Hunt," October 11, 2007
• "Rules Challenger Amends Complaint and Withdraws PI Motion," September 11, 2007
• "Inventor Sues PTO to Prevent New Continuation and Claims Rules from Taking Effect," August 30, 2007
Comments