By James G. McEwen
Under prior rules, an applicant was entitled to file as many continuation applications as needed to ensure that the invention was properly claimed and to prevent inadvertently narrow limitations from precluding literal infringement. The only limitation on the number of continuations was generally set by matters of equity or where an applicant was not attempting to advance prosecution by amending the claims. The applicant could also attempt to ensure such coverage using a single application which included as many claims as needed. The limitation on the number of claims in a single application was set by the Examiner, who could issue a restriction if the number of claims being examined was deemed too burdensome for a single application.
Likewise, applicants were strongly encouraged, through court decisions, to submit, in an Information Disclosure Statement, any information which could be deemed material. Due to the influence of cases such as McKesson Information Solutions v. Bridge Medical, Inc., 487 F3d 897; 82 USPQ2d 1865 (Fed. Cir. 2007) and Nilssen, et al. v. Osram Sylvania, Inc., et al., 504 F.3d 1223; 84 USPQ2d 1811 (Fed. Cir. 2007), the standard for when documents and arguments need to be presented has been greatly expanded. As such, practitioners have generally been highly inclusive in determining what documents need to be submitted in order to ensure that, during enforcement proceedings, a court does not find the resulting patent unenforceable for failure to submit material prior art.
In an effort to reduce the number of outstanding applications, application pendency, and the claims for each application, the United States Patent and Trademark Office (USPTO) attempted to institute a new rule package to be effective on November 1, 2007. As previously reported in Volume 3, Issue 3, of the Stein McEwen Newsletter, the new rule package was designed to change existing patent prosecution strategies by effectively limiting the number of continuations and claims.
Similarly, on July 10, 2006, the USPTO proposed changing the Information Disclosure Statement requirements in order to reduce the burden on the Examiner due to large submissions. As previously reported in Volume 2, Issue 3 of the Stein McEwen Newsletter, the USPTO proposed these rule changes as part of the USPTO’s Focus the Patent Process in the 21st Century plan, and are designed to “encourage patent applicants to provide the USPTO the most relevant information related to their inventions in the early stages of the review process.” In order to achieve this goal, the USPTO is proposing applicants submit additional information about the submitted documents which varies dependent on the timing of the submission, as well as the number of submissions.
Status of Changes to Claim and Continuation Rules
As previously reported in Volume 3, Issue 4 of the Stein McEwen Newsletter, in order to prevent the new continuation and claims rules from becoming effective, a suit was brought under the Administrative Procedures Act to enjoin their enactment. The suit was brought in the Eastern District of Virginia first by an individual inventor, Triantafyllos Tafas. This suit was later joined by Glaxo Smithkline. On October 31, 2007, the District Court issued a preliminary injunction preventing the USPTO from implementing the rules as planned on November 1, 2007. While not permanent, the preliminary injunction indicates that the rules may be reversed in at least certain areas.
Recently, the Federal Circuit reversed the District Court, finding that the USPTO the rules were within the powers delegated to the USPTO under 35 U.S.C. §2(b). Specifically, in Tafas et al. v. Dudas, Civ. Case No. 2008-1352 (Fed. Cir. March 20, 2009), the Federal Circuit found that, while the USPTO cannot enact substantive rules which preclude a change in substantive standards by which an applicant’s application is judged, it can enact procedural rules which do not “foreclose effective opportunity to make one’s case on the merits.” Quoting JEM Broad. Co. v. FCC, 22 F.3d 320, 327-28 (D.C. Cir. 1994) quoting Lamoille Valley R.R. Co. v. Interstate Commerce Comm’n, 711 F.2d 295, 328 (D.C. Cir. 1983)). By this standard, the Federal Circuit found that the new continuation rules do not effectively preclude all opportunities for filing continuations and RCEs since applicants can still comply with the procedures set forth in proposed Rules 78 and 114 to ensure that additional continuations and RCEs are filed. Moreover, the filing of an ESD is similarly procedural such that proposed Rules 75 and 265 provide a remedy to allow more than 25 patentably indistinct claims in a family of applications.
While the Federal Circuit did note that the USPTO had threatened to make the rules so draconian as to effectively preclude an applicant’s ability to claim an invention or otherwise obtain coverage using RCEs and continuation applications in excess of the proposed rule limits, the Federal Circuit held that such interpretations are purely speculative. However, should such interpretations come to realization, applicants would be entitled to have such interpretations reviewed under the APA.
Next, even though the Federal Circuit found that the USPTO had the power to enact these sorts of rules, the Federal Circuit noted that such rules must not be arbitrary and capricious or contrary to law. On review under this standard, the Federal Circuit found that the continuation rules in proposed Rule 78 were contrary to law. Specifically, the Federal Circuit found that 35 U.S.C. §120 allows for unlimited continuation applications, and the proposed Rule 78 would have added a substantive requirement not required by statute. As such, the Federal Circuit found that proposed Rule 78 was contrary to law, and cannot be enacted in its present form.
In contrast, the Federal Circuit found that proposed Rule 114, which required a specific petition for an additional RCE per patent family, was not in conflict with 35 U.S.C. §132. Specifically, while 35 U.S.C. §132 created RCEs, it does not unambiguously require the USPTO to grant unlimited RCEs. Therefore, the USPTO’s interpretation of the statute for the purposes of limiting RCEs in proposed Rule 114 was entitled to deference and is thus not in conflict with the law.
Similarly, the Federal Circuit also held that, while 35 U.S.C. §112 ¶ 2 does allow an applicant to claim unlimited numbers of claims, the proposed Rules 75 and 265 do not actually limit the numbers of claims an applicant can have. Instead, the proposed Rules 75 and 265 merely trigger an additional submission of information via an ESD, and therefore do not provide a limit on the number of claims per se.
As such, the Federal Circuit held that only the continuation rules were contrary to the Patent Act, and the remaining proposed rules were within the rule-making authority of the USPTO. However, for purposes of remand, the Federal Circuit noted that the decision did not address many issues remaining and directed that the District Court further evaluate the rules for the following issues:
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.
As such, the Federal Circuit acknowledged that merely indicating that the rules are procedural in nature does not represent an end of the discussion, but merely a beginning of the more substantive conflicts between the APA and the remaining proposed Rules. Since there is ongoing litigation over whether the remaining rules are compliant with the APA, it remains unclear as to when such remaining rules on the RCEs and claim number limitations will be effective, and in what form. For instance, it is conceivable that only certain remaining rules will be enjoined, while others remain compliant with the Administrative Procedures Act. As a result, any implementation will be subject to the District Court’s final decision on whether to permanently enjoin the rules. As such, applicants cannot anticipate, with reasonable certainty, which portions of the rules will be implemented (if any) and when.
Status of Changes to Information Disclosure Statement Rules
Since the close of the comment period for the information disclosure statement rule changes, the rules have been submitted to the Office of Management and Budget (OMB) for final review, which is required by Executive Order 12866 for all new rules. While an effort was made to have the rules revised or rejected while under review at the OMB, OMB approved the information disclosure statement rule changes on December 12, 2007. However, in view of the Federal Circuit’s opinion in Tafas, it is uncertain as to when or if these rules would be issued, and in what form.
As the final form of each rule change is uncertain, any suggestions in order to address the rule changes would be speculative at best. However, it would seem advisable to assume, as a worst case scenario, that some form of the claims or RCEs rule changes will be implemented. Thus, it would be generally advisable to file any new RCEs or applications with large numbers of claims prior to the final decision by the Eastern District of Virginia. Moreover, in view of the impending changes to the rules for information disclosure statements and to the extent possible, any such information disclosure statements should be filed in an expedited fashion in case the final rules otherwise require the detailed explanations and updating originally proposed by the USPTO. The changes to the information disclosure statement, RCE and claims practices represent one of the largest attempts to change patent prosecution practice in the past ten years. These changes present specific challenges to the way in which patents have been prosecuted in the past, and the interlocking features of the potential rules make it especially challenging to formulate an effective strategy without substantial study of the policies and the language of the rules. However, once such a review is done and after the final versions of the rules are implemented, it is apparent that applicants can still protect their inventions through aggressive combinations of restrictions, petitions, appeals, and possible accelerated examinations. Thus, while the changes are substantial, applicants still have the ability to strategically protect their patentable inventions by adapting to the rule changes and taking advantage of the potential workarounds reported in previous articles of the Stein McEwen Newsletter or to be developed.
 The opinions in this article do not represent the official positions of Stein McEwen, LLP.