On March 20, 2009, the Federal Circuit issued a decision captioned Tafas and SmithKline Beecham Corp. v. Doll, addressing new rules promulgated by the U.S. Patent & Trademark Office ("PTO") governing patent application requirements. In a split decision, the Federal Circuit determined that the PTO had rulemaking authority for three of the four rules reviewed. Because the case was remanded for further proceedings, the three rules the majority found to be within the scope of the PTO's authority have yet to take effect.
The majority opinion, authored by Judge Prost, found that the PTO had authority to issue all of the new rules because they were "procedural" rather than "substantive." The PTO had alleged that the controversial rules were necessary to address the "large and growing backlog of unexamined patent applications." The court majority also upheld Final Rule 114 (limiting the number of requests for continued examination ("RCE")) and Final Rules 75 and 265 (requiring submission of a new "examination support document" ("ESD") when filing a certain number of claims), but rejected Final Rule 78, which sought to limit the number of continuation applications.
In striking down Final Rule 78, the majority found that it was inconsistent with 35 U.S.C. § 120, which states that any continuation or continuation-in-part application "shall" be granted priority to the patent application upon satisfaction of certain requirements. Judge Bryson's concurrence agreed that Final Rule 78 was invalid because it was drafted broadly enough to include continuation applications co-pending with the first-filed application, but held open the possibility that a redrafted rule which limited applicants to two continuation applications might not be inconsistent with 35 U.S.C. § 120.
The majority emphasized that its decision was limited to the specific challenges raised by Tafas, and remanded the case to the district court to address: "whether any of the Final Rules, either on their face or as applied in any specific circumstances, are arbitrary and capricious; whether any of the Final Rules conflict with the Patent Act in ways not specifically addressed in this opinion; whether all USPTO rulemaking is subject to notice and comment rulemaking under 5 U.S.C. § 553; whether any of the Final Rules are impermissibly vague; and whether the Final Rules are impermissibly retroactive."
Judge Rader filed an opinion in which he argued that the Final Rules are substantive (rather than procedural) because they "affect individual rights and obligations, and mark a startling change in existing law and patent policy." He therefore concurred with the majority in striking down Final Rule 78, but dissented with respect to Final Rules 75, 114 and 265, which he considers to be invalid. Judge Rader also suggested that the Final Rules would discourage inventors from publicly disclosing their inventions in patent filings, stating: "[w]ith less ability to claim myriad methods of making, methods of use, species and intermediates, and more, an inventor will have less incentive to disclose the full dimension of the technological advance. Final Rule 75 frustrates the quid pro quo contemplated by the Patent Act."
If Final Rules 75, 114 and 265 are ultimately upheld and implemented in their current form, applicants may face new challenges in submitting applications to the PTO. Under Final Rule 114, an applicant may file only one RCE as a matter of right and, for each additional RCE, must file a petition "showing that the amendment, argument, or evidence sought to be entered could not have been submitted prior to the close of prosecution in the application." Moreover, this limitation is applied to families of related applications rather than to individual applications. Final Rule 75 requires an ESD for applications containing at least 5 independent claims or 25 total claims. The ESD requirements are set forth in Final Rule 265, and mandate the submission of a preexamination prior art search, a list of the most relevant references found, identification of which claim limitations are disclosed in each reference, an explanation of how each independent claim is patentable over the references, and a showing where the specification discloses each limitation in accordance with 35 U.S.C. § 112.
Although it is unclear if, when, or in what form the Final Rules will become effective, prudence suggests reviewing patent portfolios and pending applications to determine: (1) whether additional RCEs need to be filed or more claims should be added; and (2) whether multiple continuation applications need to be filed. Doing so now may limit the impact the imposition of the Final Rules will have on patent portfolios and pending applications.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
