Federal Circuit Grants En Banc Review in Tafas v. Doll

    By Kevin E. Noonan --

The Federal Circuit today ordered en banc review of Tafas v. Doll, vacating the panel decision of March 20, 2009.  The Court's decision was reported per curiam and Judge Lourie did not participate in the decision to rehear the appeal en banc.

The Court in its order noted that plaintiff-appellees Tafas and Glaxo SmithKline had requested rehearing by the original panel and rehearing en banc (see Patent Docs reports on Tafas Petition and GSK Petition), and that the Court had invited briefing from the U.S. Patent and Trademark Office as appellant and amici.  The Court said that the en banc panel will consider the briefs filed by the parties to date as well as additional amicus briefs, and that the parties could file additional briefs, setting a deadline for appellants' (the USPTO) briefs 30 days from today's order, or August 5, 2009, with appellees Tafas and Glaxo SmithKline's briefs being due 20 days thereafter, on August 26th.

Amici having filed briefs to date include the American Association of Retired Persons (AARP), the Computer and Communications Industry Association, Consumer Watchdog, Essential Action, the Initiative for Medicines, Access and Knowledge, Prescription Access Litigation, Public Knowledge, the Public Patent Foundation, Research on Innovation, and the Software Freedom Law Center (all represented by Dan Ravicher; see "Public Interest Groups Back USPTO in Tafas v. Dudas Appeal"), Amber Wave Systems Corp., the AIPLA, BIO, Dolby Labs, Elan Pharmaceuticals, Inc., Fallbrook Technologies, Inc., General Electric Co., IPO, Intellectual Ventures, Interdigital Communications, LLC, Monsanto Co., Nano-Terra, Inc., the N.Y. IPLA, Pax Streamline, Inc., PhRMA, Ruckus Wireless, Inc., Seven Networks, Inc., Sonic Wall, Inc., Tessera, Inc., the Washington Legal Foundation, the William Mitchell College of Law Intellectual Property Institute (represented by R. Carl Moy), and Arthur Klein, Arti Rai, Craig Nail, John R. Thomas, Katherine Strandburg, Mark Lemley, Mark McKenna, Marshall Leaffer, Michael Risch, Peter Menell, Robin Feldman, Stuart Benjamin, and the Intellectual Property and Administrative Law Professors (all represented by Mark Lemley; see "Law Professors Back USPTO in Tafas v. Dudas Appeal").  Additional briefs, from these or other amici, will be due no later than 7 days after the filing date of the brief for a party whose position the amicus is supporting, or 7 days after the appellant's brief is filed if the amicus is supporting no party, pursuant to Fed. R. App. Pro. 29 and Federal Circuit Rule 32.

What follows constitutes crystal ball-gazing, since the Court's order contained no inkling of the circumstances or rationale that occasioned the Court's decision to rehear the appeal en banc.  The original panel decision (by Judge Prost and joined by Judge Bryson, with Judge Rader dissenting), readers will recall, determined that all of the rules Tafas and GSK objected to were procedural and thus fell within the ambit of the Office's rulemaking authority (see Patent Docs report).  On the other hand, the panel found that proposed Rule 78, which limited the number of continuation applications that could be filed, was contrary to the plain language and meaning of 35 U.S.C. § 120, and thus was void under 35 U.S.C. § 2(b)(2), which required any Patent Office rulemaking not to be "contrary to law."  The effect of the panel's decision was to uphold the District Court's injunction as to Rule 78, which effectively vitiated the other rules.  Indeed, implementing these rules would exacerbate rather than ameliorate the problem that purportedly motivated the rules in the first place, the overwhelming backlog of unexamined applications.

The rehearing en banc could (and probably should) be directed towards establishing firm parameters on the scope of the Patent Office rulemaking authority.  It could also merely reverse the one portion of the decision that went in Tafas/GSK's favor.  What is important to keep in mind is that a rehearing en banc could moot the remaining grounds for objecting to the rules not ruled-upon by the District Court, thus giving a green light for the Office to implement the rules.  There has been no indication that the Obama administration is in favor of these rules (although the presence of Arti Rai as an Obama advisor has given many pause), nor what Director-designate David J. Kappos thinks about the rules.  (In this regard, it may be important to remember that Mr. Kappos filed an affidavit in support of the AIPLA's amicus brief to the district court supporting the Tafas/GSK challenge to the "new rules"; see "AIPLA Supports GSK's Lawsuit Against the Patent Office's New Rules.")  For now, the best strategy for those who oppose the rules would appear to be filing amicus briefs with the Court.

For additional information regarding this topic please see:
• "GSK Files Petition for Rehearing in Tafas v. Doll," June 4, 2009
• "Tafas Files Petition for Rehearing in Tafas v. Doll," June 3, 2009
• "Tafas v. Doll (Fed. Cir. 2009)," March 22, 2009
• "Law Professors Back USPTO in Tafas v. Dudas Appeal," October 23, 2008
• "Public Interest Groups Back USPTO in Tafas v. Dudas Appeal," August 5, 2008
• "AIPLA Supports GSK's Lawsuit Against the Patent Office's New Rules," October 25, 2007

Comments

[EG]

Kevin,

That the Federal Circuit granted rehearing en banc suggests these nefarious (and oxymoronic) claim-continuation limitation rules are in trouble. The interesting question is whether the PTO will withdraw this rules package before the Federal Circuit ax falls. I doubt the PTO wants a ruling by the en banc Federal Circuit that the PTO has no authority to enact this rules package as it would also undermine their authority on the other pending rule packages on IDSs, appeals and Markush Groups.

[Noise above Law]

EG,

If the Office withdraws at this point, keeping in mind that the CAFC Panel decision has been vacated, wouldn't the Office be in a "no authority" state, as standing ruling is that of the District Court, which held that the rules were not allowed?

If for no other reason, the Office seems locked into fighting this particular fight here and now.

[EG]

Noise above Law,

You bring up a valid point, but as it stands now, the PTO is in a crap shoot which could easily come up snake eyes. By pulling the rule package now, the PTO could still argue that, without a final Federal Circuit decision, their authority to enact a properly drafted set of claim-continuation rules hasn't been fully adjudicated. I suspect this wouldn't be the first time a federal agency pulled a rules package that was in trouble so that it could be refined to address the challenges and perhaps survive a court test. If the PTO continues on with what has been, so far, a "damn the torpedoes, full speed ahead" approach, that could get them a decision from the en banc Federal Circuit that provides no wiggle room for the PTO at all. Conversely, if they pull the rules package now, and address the noted "weak spots," including the APA/RFA/OMB infirmities pointed out by Dave Boundy et al., they might be able to undermine the opposition to these rules a subsequent court fight develops.

[Joe Miller]

Is there an on-line copy of the PTO's response to the en banc petitions?

[Kevin E. Noonan]

With what's at stake (rulemaking authority), it is unlikely that the Office will back down, including petitioning for certiorari if the en banc panel does anything other than reverse on Rule 78. Particularly if the court speaks to PTO rulemaking authority broadly, there will be serious pressure to get the Supreme Court to reverse any restrictions on the Office's rulemaking authority. In some ways the present administrative situation is the worst, since presumptive Director Kappos will not have had time to work through the various issues with the Office by the time the need for a cert petition becomes evident. None of the incoming administration wants their hands tied, and the "old guard" has 3-4 years invested in the rulemaking process and these rules (as well as the IDS, Markush and appeals rules).

The thing to remember is something Professor Duffy said at BIO - the Supreme Court is much more comfortable with administrative law than they are with patent law. Since the issues are almost all questions of administrative law, the Federal Circuit should expect even less deference from any Supreme Court review than they may occasionally get from the Court on patent law issues. So the real question is whether the en banc panel comes to a decision that passes muster with the administrative law mavens in the Obama administration (such as Arti Rai), who may then counsel against (or at least not advocate for) Supreme Court review. Remember, over the past 10 years the Solicitor General recommended the Court review most of the CAFC decisions that were struck down, so this aspect may be crucial.

Thanks, EG and Noise, for the comments.

[6]

"With what's at stake (rulemaking authority), it is unlikely that the Office will back down, including petitioning for certiorari if the en banc panel does anything other than reverse on Rule 78."

That is what will happen if they lose. The very best outcome that people could hope for if they don't like the rules is a win at the CAFC and the SC to not take the case.

It is unlikely the SC wouldn't take the case, as this is an important case for a whole lot of agencies, not just the office even though the office has special rulemaking authority.

Kev, over at PO someone brought up that IBM was strongly in favor of the continuation limits I do believe.

mavin is a cool new word for me.

With Arti on your side how can you lose?

[Donald Zuhn]

6:

As Kevin pointed out back in October of 2007 (and again yesterday), Mr. Kappos filed an affidavit in support of the AIPLA's amicus brief to the district court supporting the Tafas/GSK challenge to the claims and continuation rules. So it's hard to believe that IBM would have been strongly in favor of the continuation limits in the new rules (although I guess it's possible that he took a position that was at odds with his employer).

Also, Prof. Rai has pointed out on several occasions that while she supported the PTO on the administrative law issues in Tafas, she did not think the claims and continuation rules were a good way to address the backlog.

Don

[6]

My understanding is that Kappos is strongly in favor of the Continuation limits. I would expect him to push them.

As Mark Nowotarski posted earlier in a comment to the June 18 article on Kappos's appointment:

"IBM strongly supports the concept of limits on continuation applications." http://bit.ly/IVcrY

Posted by: broje | Jul 07, 2009 at 11:13 AM

That link says it all.

[Donald Zuhn]

6:

It's hard to argue with the sentence "IBM strongly supports the concept of limits on continuation applications." A reading of the letter shows that IBM was "not recommend[ing] per se limits on the number of continuation application filings, [but] that there should be a practical method of controlling how many continuation applications can be filed." Also, while IBM "in principle" supported a rule requiring a showing to get a second CON (remember that the proposed rule was more restrictive than the final rule), its support was conditioned on the resolution of three issues, including "how this standard [i.e., requiring a showing] is to be applied." Nevertheless, if IBM's position has remained unchanged since it submitted its letter in May 2006, we should be thankful that President Obama didn't appoint IBM as the new Director.

Don

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[EG]

"Since the issues are almost all questions of administrative law, the Federal Circuit should expect even less deference from any Supreme Court review than they may occasionally get from the Court on patent law issues."

Kevin,

A very astute observation. My thinking on the possibility of the PTO pulling this rules package now is that it is currently burdened with many other issues, including retroactivity, how the rules were enacted, etc. The PTO might be better off repackaging these claim-continuation rules that's much easier defend. If the Federal Circuit en banc takes a broad stance that this particular rules package is beyond the PTO's authority to enact, that might poison any subsequent efforts by the PTO to present a more defendable package (which the current one is not).

On the other hand, if the PTO loses before the Federal Circuit en banc, and petitions for cert to SCOTUS, look out. Currently, the only constraining force on PTO rule making is the Federal Circuit. If SCOTUS removes that brake in Tafas v Doll, we might as well torch the APA, at least in the patent area, as meaningless verbiage. Frankly, the whole doctrine of Chevron deference is, in my view, an abrogation by the judiciary of its role and an abomination in our jurisprudence.

[Noise above Law]

EG,

If the Office does pull out now (for any reason, be it to repackage or not), don't they leave in place a hurdle that would be very difficult to overcome?

Granted the standing judgment is only at the District Court level, but it is a standing judgment. And Office "rule-making" will have been adjudicated.

Even if they dress up the rules package and try again, the judgement as delivered by the District Court will get in the way of their next (best?) effort, regardless of how pretty the effort.

The battle lines are set - there is no retreat without complete defeat. With whatever the en banc group decides, I see this going the distance.

[EG]

Noise above Law,

You could well be correct that this might go the distance, including up to SCOTUS. I do stand by my view that, if this does go up to SCOTUS and they uphold the authority of the PTO to enact rules like these, we might as well torch the APA as meaningless verbiage in the patent area.

[Noise above Law]

EG,

It appears that my comment from yesterday has been snagged in a filter.

Briefly, I believe that we concur.

I am interested in whether the Supremes, more apt in administrative than patent law, would allow the opening of such a Pandora's box as the Office so wishes. "Doll deference" would replace "Chevron deference".

I think that the torch would singe much more than merely the patent area, and I am hopeful that the power grab will be recognized as what it is.

[Donald Zuhn]

Noise:

Your recent comment gives me an opportunity to explain how comments get posted on Patent Docs.

I receive a copy of almost every submitted comment at the time it is submitted from the online service (TypePad) that I use to maintain the blog. I say "almost every" submitted comment because a handful of spammers have recently figured out how to post comments without prompting such notifications. As a result, I have reset the preferences for the blog such that I must publish each comment before it will appear (thus effectively locking out the spammers). Depending on when the comment is submitted, this can sometimes take a little time. When TypePad resolves the issue with these spammers, I will return to our previous settings.

Notwithstanding the above process, I reviewed our database of comments, and we have no record of a comment being submitted on July 9th. However, in view of the problems TypePad is experiencing with comment management, it is entirely possible that they "lost" your comment.

Thanks for reading Patent Docs and thanks for taking the time to comment on our content.

Don