GSK's Sherry Knowles Responds to Post on BIO Session

    By Donald Zuhn --

On Wednesday, we posted a report on a BIO Super Session entitled "A Model Patent Office for the Future -- Promoting and Protecting Investments in Innovation" (see "Docs at BIO: Panel Offers Suggestions for Fixing the USPTO").  At that session, a panel consisting of Sherry Knowles (at right), Vice President of Corporate Intellectual Property at GlaxoSmithKline Biopharmaceuticals, Inc.; Q. Todd Dickinson, Executive Director for the American Intellectual Property Law Association (AIPLA); John Duffy, Professor of Law at George Washington University Law School; and Jeff Kushan, a Partner at Sidley Austin LLP, provided a long range view of what the model patent office of the future can and should look like to drive innovation and economic growth, and promote investment in IP-intensive industries.  Today, Ms. Knowles sent us a message to let us know that she believed the report did not accurately represent the gist of her comments at the BIO session.  The text of Ms. Knowles' message is provided below:

Don:

Your article inaccurately represented the gist of my comments at BIO.  To be accurate, my position is that the success of the pharmaceutical and biotech industries are directly linked to the success of the US Patent Office.  I said it is not just up to Congress, the courts or the new Commissioner to fix the Patent Office issues, it is up to all of us as stakeholders to play an active role to make sure the PTO's problems are solved.  I concluded the session by saying we should all put the past frustrations and rhetoric behind us and fully support the new PTO Commissioner with a new spirit of cooperation.

Gene Quinn's articles in IPwatchdog.com on the new attitude of Dep. Commissioner Focarino are refreshing and show the PTO is trying to go in the right direction.  We want to work closely with the new administration to accomplish these goals.

The comment about the potential "train wreck" referred to the statistics showing a decreasing allowance rate and decreasing filing rate (which leads to a smaller PTO budget) in combination with an increasing backlog of applications.  This is a matter all of us must proactively propose solutions for.

I am of the opinion that the PTO fee sheet can be used to incentivize behavior and is a better means to regulate filings, submissions and claim presentation than absolute restrictions.  A structure can be implemented that provides relief for small entities and patent applicants for whom this presents a hardship.

I would appreciate it if you post this response.

Sherry Knowles

Our goal in reporting on the BIO session was to provide a fair summary of all of the panelists' comments for Patent Docs readers unable to attend the session.  To the extent that the report did not accomplish this goal, the publication of Ms. Knowles' e-mail should help clarify her intended message.  In addition, as regular readers are well aware, we have previously expressed the opinion that the patent community owes a debt of gratitude to GSK for leading the challenge (along with Dr. Tafas) against the continuation and claims rules (and, as a result, for perhaps playing a role in the USPTO's decision to put the IDS, Markush, and appeals rules packages on hold).  Thus, in publishing our prior report, there was no intent to diminish these important efforts (see links below).

• "Federal Circuit Hears Oral Argument on Tafas Appeal," December 8, 2008
• "GSK Files Brief in Tafas v. Dudas Appeal," September 25, 2008
• "USPTO Posts Comments on New Rules for Alternative Claiming," April 23, 2008
• "No April Fool's Joke -- Tafas and GSK Win on Summary Judgment," April 1, 2008
• "Managing Intellectual Property Releases MIP 50," July 28, 2008
• "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill," January 18, 2008
• "Enjoined New Rules and Patent Reform Finally Appearing on Biotech Industry's Radar," December 20, 2007
• "Tafas v. Dudas; SmithKline Beecham Corp. v. Dudas (E.D. Va. 2007)," October 31, 2007
• "AIPLA Supports GSK's Lawsuit Against the Patent Office's New Rules," October 25, 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

Comments

[6]

Yes Ms Knowles we regulars of the blawgosphere understood what you were talking about from their reporting. Some newbies might have been left out, but that is of little consequence, as newbies will always be left out.

The problem with your suggestions is that we do not have fee setting authority. If you want to solve the pto's problems then lobby for the PTO to get fee setting authority. This has been on the table as the solution since I started working here 3 years ago. Our lobbying did not prove successful, you guys need to join the fight with the same gusto which you have approached leveling baseless charges against the new rules.

Speaking of which, as regular readers are no doubt aware, the authors of the blog have indeed sent out a heartfelt thanks to Tafas et al. many times for their efforts in leveling baseless charges against the new rules. Why they would continue to do so, even in the face of those that know telling them that they don't have the legal basis needed to sink the rules (at least in so far as the issues on appeal are concerned) is anyone's guess.

[Les]

Dear Ms. Knowles -

Please forgive the fact that this comment is quite far off point. This is the only opportunity I've seen to contact anyone on the GSK / Tafas team.

This is to suggest/beg that as you continue fighting the "Final Rules" you somehow work into your arguments the absurtity of (working from memory now) rule 75 (or 175?).

That rule would prevent one from amending an application to have more than 5 independent claims if an ESD wasn't filed before the first office action.

That means that in an application with only 3 independent claims and only 20 claims total (say 6, 6, and 5 directly dependent claims from each of the independents) (well withing 5/25), if the examiner finally rejects the independent claims but finds allowable subject matter in each of the dependent claims, the applicant is prevented from accepting the allowed claims because she is precluded from amending the application to have 17 independent claims.

This even though the claims have already been examined and found to be allowable.

I think this goes a long way to show how arbitrary the "final rules" are. However, I have had to squint very tightly to find any reference to it in any of the papers filed in the case so far.

Thanks for fighting the good fight.

LL&P

[Kevin E. Noonan]

Dear 6:

Saying it doesn't make it so. The fact is that whether the rules are procedural or substantive, and whether the Office is entitled to Chevron deference, and whether the continuation rules contravene the provisions of Sec. 120 are all pretty valid questions. The law provides a way to challenge agency action, which is what Tafas and GSK did. The fact that the Federal Circuit found that the rules were procedural, and that the continuation rules contravened Sec. 120 and were thus not entitled to Chevron deference, is completely consistent with how administrative agencies and their challengers act lawfully. Professor Duffy's comments merely reflected the fact that, due to their backgrounds, the current Supreme Court justices might be more comfortable with administrative law than patent law, and based on their experience be more likely to find in the Office's favor.

However, you may note that even in Professor Duffy's comment is the implication that IF the Supreme Court had a better understanding of patent law (and specifically, the inequities that would be imposed on applicants if the rules were implemented), they might not come to a conclusion favorable to the Office.

So, insofar as commentary goes, calling the Tafas/GSK actions "baseless" is itself not based in law or reality.

We disagree, but no one is doing anything baseless (see our earlier posts on the basis for the rules in the first place).

[6]

Les, in my applications (at least) there very often nearly infinite allowable subject matter depending on what the applicant is willing to accept, and pay for in terms of extra claim fees. Are you proposing that since this is the case no claim restrictions could ever be leveled without being "arbitrary and capricious"? It seems to me that there is a link between the underlying facts and the decision to make the rule as it is, thus it would not be arbitrary or capricious. Specifically, besides the fact that there might be tons of completely different limitations which might render a nearly infinite amount of different claim patentable in a given app, you could always take any claim you get allowed, look at the reasons for allowance, and easily draft a nearly infinite amount of claims incorporating that specific allowable subject matter. Those facts stomp all over the arbitrary and capricious charges you would level, and the Tafas team would be fine leaving out those baseless assertions of arbitrary and capriciousness since they are plainly not, and there is plainly a connection between the facts adn the decision taken. Remember, just because there is something you don't like about the rules, or that is mean, or that is needlessly mean, that doesn't change them into arbitrary and capricious. There doesn't have to be a link between the meanness of them and the facts, there has only to be a link between the facts and the decision made.

"Saying it doesn't make it so. The fact is that whether the rules are procedural or substantive, and whether the Office is entitled to Chevron deference, and whether the continuation rules contravene the provisions of Sec. 120 are all pretty valid questions. "

I've already argued this subject with you before so I'm not going to rehash the whole thing again. Even after you've seen the way those knowledgeable about the subject have ruled, you still prattle on about having some sort of base for your assertions. You never had one, your supposed "base" was irrelevant or a plain fabrication of "facts" that never existed from the outset, and you got lucky that the Fed Circ. understood the nuances of the rules so well as to catch one small issue in them which I don't believe even the office saw. An issue which is readily correctable.

As to the USSC, they'd have to simultaneously become ignorant of both patent law, and admin law, and probably law in general, to rule in your favor. Duffy's comment is immaterial except in so far as it is funny and true. As you surmise, it is blatant that there are other issues with the rules, besides the ones on appeal, which include inequities etc. Those issues have nothing to do with the issues on appeal, which are specifically the ones which I can only see as baseless.

I'm through discussing the matter, my position is well documented already, and I tire of the subject as the repetition becomes boring.

[Fej]

Well, Ms. Knowles ... judging by the comments above it looks like your statements at BIO, whether properly or improperly represented in this blog, are overshadowed by your employer v. PTO.

This is a shame, because I think that you are making a great point. Let's drop the fighting (the us being patenting entities v. PTO) and find a solution that works for all. Yet, our comments gravitate back towards the fight. This is the problem with lawyers and how we complicate things. We like polarize everything when what we must learn to do is seek mutually beneficial solutions.

I commend you for bucking the trend, I appreciate your statements at BIO, I thank you for taking time to become involved and I support the solution you have proposed.

[Les]

Fej -

How do you propose one :"play an active role to make sure the PTO's problems are solved" without addressing the rules the PTO is presently seeking to impose?

By the way, have you received your bill for $175 in discipline fees yet? Are you going to send in anything extra?

[Hooray]

Hear, hear! Thank you to Ms. Knowles and GSK for fighting for the benefit of all. We will always owe you our gratitude for taking on this necessary battle.
I hope that the efforts for openness and transparency by the new administration will result in a return to sensible and courteous behavior by the PTO and that the long nightmare of the rules saga will finally end, but in any event if that happens it will be in large part because of GSK. Thank you, thank you, thank you.

[Les]

I now see that the Rule 75(b) issue mentioned above has been raised in a petition filed yesterday by Tafas. Thanks!