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On March 20, 2009, the U.S. Court of Appeals for the Federal Circuit (Fed. Circuit) issued its long-awaited decision in Tafas v. Doll. A divided Fed. Circuit panel found that the U.S. Patent and Trademark Office (USPTO) did not exceed the scope of its rulemaking authority when it issued a set of New Rules limiting claims and RCEs, but also found that a rule limiting the number of continuation applications was invalid. The case has been remanded to the district court to determine additional facts, so the New Rules remain enjoined. Moreover, the USPTO has decided not to implement the Rules at this time.
Background
In August 2007, the USPTO issued the new rules in an attempt to reduce the backlog of pending patent applications. Rules 78 and 114 limit an applicant to two continuation applications and one request for continued examination (RCE), respectively. To file additional continuation applications or RCEs, the Rules require the applicant to file a petition “showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application” or “prior to the close of prosecution in the application,” respectively.
Rule 75 requires an applicant who submits more than either five independent claims or twenty-five total claims to provide an examination support document (ESD) pursuant to Rule 265 including a list of the most relevant references produced by the search, identifying which claim limitations are disclosed in each reference, explaining the patentability of each independent claim over the references, and showing support for each claim limitation in the specification.
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In October 2007, the Eastern District of Virginia enjoined the USPTO from implementing the Rules, finding on summary judgment that the USPTO exceeded the scope of its rulemaking authority because the Rules were “substantive rules that change existing law and alter the rights of applicants.” The USPTO appealed the district court decision to the Fed. Circuit.
The Fed. Circuit panel decision held the Rules to be procedural and thus within the scope of the USPTO’s rulemaking authority. However, the Fed. Circuit panel also found Rule 78 to be inconsistent with the Patent Act and, therefore, invalid. The Fed. Circuit affirmed the district court’s grant of summary judgment that invalidated Rule 78 and vacated the district court’s grant of summary judgment with respect to Rules 75, 114, and 265. The Fed. Circuit panel did not address several factual issues, and therefore remanded the case for further proceedings in the lower court.
Implications
The New Rules have the potential to substantially change the landscape of patent prosecution. As acknowledged by the Fed. Circuit panel, however, the degree of impact will ultimately depend on the USPTO’s implementation of the New Rules. It is still too early to predict the final outcome of this case and when the New Rules might take effect. The case could take any number of different paths including an en banc hearing by the Fed. Circuit, and a hearing by the U.S. Supreme Court.
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