Tafas v. Doll: Continuation Limits Invalid; Limits on Claims and RCEs are OK

Tafas v. Doll (Fed. Cir. 2009)

The PTO has attempted to implement new rules that limit both the number of continuation applications that may be filed and the number of claims that may be included within each application. The district court issued a summary judgment ruling that blocked implementation of the rules. On appeal, the Federal Circuit has vacated-in-part – finding that some of the limitations on continuations improperly conflict with 35 U.S.C. § 120, but that the remaining limits are "within the scope of the USPTO's rulemaking authority." The case is not finally decided. Rather, the lower court must now decided whether any of the rules are "arbitrary and capricious;" conflict with the Patent Act in ways not already addressed; violated proper rulemaking procedure; are impermissibly vague; or impermissibly retroactive.

Final Rule 78 (Continuations): The PTO's Final Rule 78 would have required that any applicant wanting to pursue more than two continuation applications 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." According to the court, that rule is in conflict with Section 120 of the Patent Act, which entitles the application to the filing date of a prior-filed application. In a concurring opinion, Judge Bryson noted that the conflict arises only because the limit is on the "number of continuations co-pending with the first-filed application."

Final Rule 114 (RCEs): The PTO's Final Rule 114 operated in the same way as Rule 78 except that it applied to Requests for Continued Examination (RCEs) rather than continuation applications. Because RCEs are not implicated by Section 120, the Federal Circuit found no conflict there.

Final Rules 75 and 265 (Claims): These rules would require an examination support document (ESD) for any application that includes more than five independent claims or twenty-five total claims. The ESD includes a preexamination prior art search, a list of the most relevant references and limitations disclosed by each reference, an explanation of how each independent claim is patentable over the submitted references, and an analysis of how each limitation of the claims is disclosed and enabled by the specification. The Federal Circuit found that the lower court was wrong in finding that the PTO exceeded its authority in implementing these rules.

Rulemaking Authority: The initial focus of the court's analysis is on the Rulemaking Authority of the USPTO. 35 U.S.C. § 2(b) gives the PTO authority to "establish regulations, not inconsistent with the law, which . . . (A) shall govern the conduct of proceedings in the office; . . . (C) shall facilitate and expedite the processing of patent applications, particularly those which can be filed, stored, processed, searched, and retrieved electronically . . . (D) may govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office . . . ." The PTO is also required – under Section 132(b) – to "prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant." Although, these rules do not provide any "general substantive rulemaking power" to the PTO, the court will still grant Chevron deference to the PTO's interpretation of "statutory provisions that relate to the exercise of delegated authority."

Substantive v. Procedural: Without substantive rulemaking authority, the case turns on whether the limits are procedural or substantive. This is a difficult question to answer, and the Federal Circuit chose to follow the 1994 JEM case decided by the DC Circuit. In that case, the court found new rules procedural because they did not "foreclose effective opportunity to make one's case on the merits." With that rule as the framework, the conclusion is somewhat easy. The new rules do not "foreclose effective opportunity" – they only require justification for additional continuations and an ESD filing for additional claims.

"[A]pplicants who diligently present all of their amendments, arguments, and evidence as soon as possible during prosecution will be granted as many RCEs as they require. Thus, applications that are submitted in compliance with these timing requirements will be fully examined and given all of the benefits provided by the Patent Act. We do not believe that requiring applicants to raise all then-available amendments, arguments, and evidence by the second continuation application or the first RCE is so significant a burden that applicants will be effectively foreclosed from obtaining the patent rights to which they are entitled."

The Federal Circuit admits that the rules puts a large amount of authority in the hands of the PTO – to grant or reject petitions. However, the court took a wait and see approach: "[The courts] will be free to entertain challenges to the USPTO's application of the Final Rules." Oddly, the Court refused to hold the PTO to any of its official or unofficial public statements regarding how it will interpret the rules. "[T]hese comments do not bind the USPTO."

No Inequitable Conduct Problem: Relying on Kingsdown, the Federal Circuit noted that the ESD requirement is unlikely to cause any inequitable conduct problem for applicants. "[D]oubt about the judiciary's ability to apply its own doctrine in a way that yields fair results and discourages frivolous allegations should not preclude the USPTO from promulgating rules that are within its statutory authority."

Dissent by Rader: Judge Rader would have affirmed "[b]ecause the Final Rules drastically change the existing law and alter an inventor's rights and obligations under the Patent Act, they are substantive and the PTO exceeded its statutory rulemaking authority under 35 U.S.C. § 2(b)(2)."

Notes:

• This case was formerly captioned Tafas v. Dudas.
• In response to the decision, the PTO released the following statement: "The United States Patent and Trademark Office is pleased that the United States Court of Appeals for the Federal Circuit confirmed that the Final Rules are within the agency's rulemaking authority and that the rules regarding requests for continued examination, claims, and examination support documents are consistent with the law. We are further considering other aspects of the opinion, including the Federal Circuit's conclusion that the rule regarding continuations conflicts with the Patent Act."

  

Comments

[hmm]

Gotta love this line in the dissent: "[b]y analogy, this rule has a similar effect to imposing a five-page limit on applications."

[Malcolm Mooney]

"The case is not finally decided. Rather, the lower court must now decided whether any of the rules are "arbitrary and capricious;" conflict with the Patent Act in ways not already addressed; violated proper rulemaking procedure; are impermissibly vague; or impermissibly retroactive."

What an incredible waste of time and money has been spent on these poorly conceived and even more poorly drafted rules.

[metoo]

This case will, of course, be taken up en banc. And in my opinion Rader will be in the majority for the en banc decision.

[anon]

From Rader's concurrence in part and dissent in part:

"This court today forgets that an inventor’s incentive to disclose is commensurate with the protection available. With 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."

[smashmouth football]

At this stage, does it make more sense to petition for en banc review, or go back to district court and see what happens, presumably retaining the right to appeal from that final judgment? It seems to me the PTO doesn't give a sh-t how much money it costs to litigate this, and furthermore, to me this was an unexpected win for them. So if I were in Tafas's shoes, I would try to get this to the en banc court NOW.

Judge Rader demolishes the logic of the majority opinion (and the PTO), but so far to no avail.

[me]

Here is the roadmap for Cacheris to invalidate the rest of the rules:

"Because of the complexity of this case and the numerous arguments presented on appeal and before the district court, we think it is important to expressly summarize what we believe remains for the district court on remand. This opinion does not decide any of 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."

[metoo]

I think this case goes en banc now, regardless of whether or not Tafas asks for it.

[Malcolm Mooney]

Rader: "This court today forgets that an inventor’s incentive to disclose is commensurate with the protection available. With 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."

Every PTO rule arguably conflicts with the inventor's "ability" to claim the world. Rader has to do better than this, I'm afraid, if he wants to convince a majority of his peers.

[Tyrone Slothrop]

"These responses are not binding on the courts, which will be free to entertain challenges to the USPTO’s application of the Final Rules, including its view of when amendments, arguments, and evidence could not have been submitted earlier, under the standard set forth in 5 U.S.C. § 706."

Relax, the lawyers always win!

Seriously though, it's not hard to imagine every procedural step of every patent application having to be appealed through the courts. Can you say "Kafkaesque"?

[Joe Miller]

The en banc question:
The court's internal operating procedures entail circulating a draft opinion, before it issues to the public, to the full court. At that time, a judge could initiate a poll of the judges to take the case en banc. (IOP #10(5).)
There's no sign that such a poll happened here.
In any event, it seems clear that (a) the other judges of the court are not learning about this decision today (along with the rest of us), and (b) a majority of them already could have stopped it from happening if they had wanted to.

[Night Writer Patent Attorney]

1 For a discussion of the problems created by continuation applications, see Mark A. Lemley & Kimberly A. Moore, Ending Abuse of Patent Continuations, 84 B.U. L. Rev. 63, 71-83 (2004).

Any opinion that cites to an article written by Lemley regarding patents is per se wrong.

[Sn@ke]

The continuation limits were the real purpose of this rule set. The PTO lost.

For the features that were identified as ok by the court, a road map was given to effectively kill those or tie them up in court for the forseeable future. I wouldn't be shocked if the PTO pulled the plug on the battle with the crown jewel lost.

[smashmouth football]

At p. 10 of Judge Rader's dissent:
"Final Rule 75 limits an application to five independent claims or twenty-five claims total. Placing an arbitrary limit on the number of claims in an application drastically affects an applicant’s rights and obligations under the Patent Act."

Compare with 35 U.S.C. 112 para. 2:
"The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention."

A plain reading of section 112 is clearly in conflict with Final Rule 75.

Likewise, Final Rule 78 directly conflicts with 35 U.S.C. 120.

[metoo]

Joe,
You are indeed correct. However, the IOP's also allow for a sua sponte petition for rehearing en banc after an opinion has been issued.

[West Coast Guy]

Unless the Obama administration discontinues the pursuit for the new rules, these rules will never see the light of day until the next presidential election given (1) the limited issues decided, (2) the new issues that can be addressed in the future by the CAFC that they punted on here, (3) the passage of time between the different levels of appeals, (4) the possibility of one or more en banc reviews, and (5) future petitions for cert.

This will last a good long while before the PTO could ever hope to enforce them.

[BigGuy]

"The continuation limits were the real purpose of this rule set. The PTO lost."

You get the gold star, sn@ke. The rest of this rule package was to enforce the claim/continuation limits. Without the continuation limits, the package is toothless. At best, the PTO has to start over.

[anonymously yours]

Dudas
Rolla
Love
Bozo
Pol Pot

Gone, but not forgotten!

[smashmouth football]

Joe Miller said:
"There's no sign that such a poll happened here.
In any event, it seems clear that (a) the other judges of the court are not learning about this decision today (along with the rest of us), and (b) a majority of them already could have stopped it from happening if they had wanted to."

Why would that poll be publicly known?
Are your assertions "clear"?

Not trying to be flippant, but it's pretty unclear to me. Unless I'm way wrong about the internal workings of the Fed. Cir., I don't see how a poll of the judges whether to take a case en banc would be released to the public before either party petitions for it. I suppose the judges themselves have such authority, but I'm not aware they exercise it very often.

Although in a case of this magnitude, maybe your (apparent) inference is dead on. It does stretch belief that the rest of the Fed. Cir. hasn't paid any attention to this case. In fact, if today's opinion stands, it wouldn't shock me to see the Supremes ultimately take the case.

[broje]

If I recall correctly, the USPTO proposed claim limits are across the entire family, including continuations.

It is not clear to me how the Court's decision affects these limits across Continuations, if at all.

[anon]

"Any opinion that cites to an article written by Lemley regarding patents is per se wrong."

More to the point, if you actually read the article, it doesn't support much at all.

"While abolishing continuation practice would address many of the concerns we have
about abuse of the patent system, our empirical research convinces us that such a solution is
likely overkill. There are a few inventors who are severely abusing continuation practice. Those
abuses are spotlighted because the inventors who abuse the system are more likely to litigate
their patents. We determine, however, that the abuse, while severe, is narrow in scope. As Table
1 demonstrates, only a few patents issued with particularly lengthy prosecutions based upon
numerous continuations."

(note that the severe abusers were Lemelson-types, who have been pre-empted by the term limit change).

[patent leather]

I wonder if the USPTO might now consider issuing a new rule simply limiting each family to 1 RCE. Since continuations typically take years to get examined, such a rule would effectively kill the continuation practice the PTO wanted to kill.

Doll would love to do it, but he knows he is on the way out. I'm also not sure he likes being the most hated USPTO commissioner/director in history.

[EG]

After reading Prost's and Bryson's opinions, may be I should believe now that the "moon is made of green cheese." Their opinions are astonishing, distressing and naive in the extreme. How these 2 judges can rationally believe that these God-forsaken Rules are anything other than "substantive" and beyond the authority of the PTO enact is incredible, as well as ignore the gameship (and procedural abuse) engaged in by the PTO in enacting these Rules which is well-documented by David Boundy, Ron Katzelson, and others.

Judge Rader is the only one on this panel who realistically understands why these Rules are "substantive" and beyond the authority of the PTO to enact. We can only hope and pray that the Federal Circuit grants an en banc hearing, and affirms Judge Cacheris' careful and well-reasoned opinion. Prost's and Bryson's opinions have badly shaken my faith in the the ability of the Federal Circuit to keep the PTO from misapplying and misusing its Rule-making authority. We may be heading for the "Dark Ages" in patent examination before the PTO.

[Steve M]

So does implementation of the remaining new rules remain blocked?

[EG]

"So does implementation of the remaining new rules remain blocked?"

Steve M,

You raise an interesting and extremely scary question.

[Examiner X]

HAHAHA!!

[metoo]

I believe the new rules are still subject to the district court's preliminary injunction. I don't think the CAFC decision lifts that injunction, as it was not appealed by the PTO.

[Joe Miller]

Smashmouth: "Unless I'm way wrong about the internal workings of the Fed. Cir., I don't see how a poll of the judges whether to take a case en banc would be released to the public before either party petitions for it."

The Court's Internal Operating Procedures are posted at the Court's website, http://www.cafc.uscourts.gov/pdf/IOPs122006.pdf

IOP #14 looks like the most pertinent, to me. It appears that a failed en banc poll of the judges results in a public order to that effect when rehearing is requested by a party after an opinion issues (IOP #14(2)(f)) or initiated by a court member sua sponte after the opinion issues (IOP #14(4)(c)). Interestingly, the portion of IOP #14 that addresses a sua sponte en banc poll after a panel has heard a case but before it issues an opinion - part (3) - does *not* indicate that a failed en banc poll should result in a public order.

So, in my comment above, I said the two narrow things that I think are clear (other members of the court saw the opinion; and they could have started an en banc poll if they wanted), and another inconclusive thing - there's no sign the court took an en banc poll pursuant to IOP #14(3). (And, of course, there's no sign the court *didn't* take one either.)

Just trying to share more information.

[metoo]

OK, please ignore my last post...that's not correct. But, I still do not believe that the trial court's injunction was dissolved by the CAFC. So the rules are still on hold for now.

[Malcolm Mooney]

"We can only hope and pray that the Federal Circuit grants an en banc hearing....We may be heading for the "Dark Ages" in patent examination before the PTO."

Dude, get a freaking grip.

[nobody asked but]

The new rules will probably not be applied until the lower court (or en banc court) fully decides or revises the decision.

If however the en banc court decides that 35 U.S.C. 120 cannot be changed in limiting the number of applications filed, the ESD and RCE limitations are pretty much procedural B.S.

If you have reached the end of the line of RCEs, file a continuation.

[BigGuy]

"If you have reached the end of the line of RCEs, file a continuation."

And if you want 26 or more claims, don't wait: file as many continuations as you like, immediately. The rules are pointless without the continuation limits. So perhaps we should all take a deep breath, relax, and enjoy our weekends?

[fisher ames]

"Examiner HAHAHA!! X"
A rather odd response to the decommissioning of the RCE gravy train.

[anonymously yours]

Yes nobody, but what about the claim number tied to an ESD. These things would stink up things. That is, would all the continuation tracking still be required if the claim #'s hold and are enforced?

[curious]

Rader's "dissent" makes a lot of sense to me.

[6]

HAHAHAHAHHHAHAHAHAHAHAHAHHAHAHAHAHAHHHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAAHAAHAAHAHHHAHAHAHAHAHAHAHAHAHAH

Wait wait,

HAHAHAHAHAHAHHAHAHAHAHAHAHHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHHAHAHAHA

This one's for you JD

HAHAHHAHAHAHAHAHAHAHHHAHAHHAHAHAHAHAHAAHAHHAHAHAHAHAHHAHAHAAH

And one for PDS, cause I know you're lurkin

HAHAHAHAHAHAHAHHAHAAHAHAAHAHAHAHHAHAHAHAHAHAHAHAHHAHAHHAHAHAHHA

What a loser argument!

What a loser argument!

LOL

It's the law, learn it!

Man that just made my day.

I've got to go to lunch but more on this later.

[6]

"A rather odd response to the decommissioning of the RCE gravy train. "

One last thing though, you don't seem to understand. What not having infinite RCE's available does is makes app want to have AT LEAST SOME allowable subject matter in there asap. That means allowances. Allowances = better even than the RCE gravy train.

[Loki]

Don't all three rule sets have to be valid for the PTO's work-reduction scheme to work? If continuations are OK, then you can circumvent the RCE and ESD rules by just filing continuations as needed.

[Jules]

I'll be glad to have 25 claims maximum per application. Filing large numbers of claims is so sketchy, even if you were allowed to pay extra for them. File them in a continuation, or a divisional, then fine. What would be horrible now is page-long dependent claims that say absolutely nothing substantial.

[fisher ames]

"One last thing though, you don't seem to understand." I understand plenty. Virtually nil new filings, allowable subject matter packed or otherwise, means ... guess what comes after a hiring freeze? better keep those #'s up.

[W]

Any of you who believe the continuation rule was the Crown Jewel of the package are ignoramuses. The rules were written intertwined on purpose - so that, if any one of the fails, the overall goal of the package can still be achieved. If anything was the Crown Jewel, it was the RCE rule.

[Ho hum]

Despite certain individual's enthusiasm, this decision won't change anything anytime son.

An RCE is a "short-form" continuation application. Anything that can be done with an RCE can be done with a continuation. As such, limiting RCEs isn't going to change much.

As far as the ESD, that'll get killed at the lower court for being vague. Without the ESD, the claim limitations won't survive. Also, it is very likely that this will be heard en banc. Basically, these rules were set up to be implemented together. The byzantine nature of these rules were designed to prevent "design arounds" by applicants. If some of the "design arounds" are permitted, then the rules won't have their desired effect of choking off the issuance of new patents.

Actually, it is too bad that these rules didn't go into effect. In today's current economic environment, a drastic reduction in the number of patents being issued easily attributable to the USPTO's rules would cause Congress to slap the USPTO upside the head so fast that we wouldn't have to worry about another one of these rules packages for a decade. Now, however, the USPTO gets to quietly nibble at the edges.

[anonymously yours]

I don't claim to be an expert on these rules. In fact, I've forgotten much about them since last year. I'm only asking. Can someone help me out?

Question: Wasn't the 25 claim rule(s) tied to one invention? And if you tried to file more than 25 claims for one invention, you had to file an ESD? This really sucks if so! Please tell me I am wrong and explain. Thanks in advance.

[Jules]

"Anything that can be done with an RCE can be done with a continuation."

Oh, so you can make a claim more broad by amending with an RCE? I thought that goes against the rules of compact prosecution. Am I wrong?

[W]

um...Ho hum - how can the lower court consider the ESD vague when there is already an accelerated examination program that uses them? The majority of AE petitions are being granted - so, apparently, applicant's are able to do them. See http://www.uspto.gov/web/patents/accelerated/ae_stat_charts.pdf

[anonymously yours]

Oh, and the 25 claim rule(s) did not concern just one application. Rather, the number of applications did not matter and that is why there was the worry about tracking all the related cases.

[Jules]

My bad, I guess I read that backwards. That statement does make sense.

[Now all patent lawyers are Examiners too ;) !]

We are now required to submit an ESD in applicants with more than 5/25 claims effectively MAKING ALL LAWYERS PATENT EXAMINERS:

-page 19-"Examiner is not permitted to substantially reject claims on the grounds that the ESD did not prove the claims are patentable." NO really! Thanks for pointing out that YOU HAVE COMPLETELY SWITCHED THE BURDEN IN PATENTS WITH GREATER THAN 5/25 CLAIMS. Since the examiner must "set forth HIS own prima facie case of unpatentability." Well, I will be sure, in MY REJECTION of the Examiner's argument (yep, thats what I said)... Something is off about my sending the Examiner a rejection - but that is apparently the rule thanks to PTO gameship, wow!

-"A procedural rule does not become substantive because it requires more effort to apply, only when foreclosed possibility of compliance" - Yes, the PTO has foreclosed possibility of compliance with ESD's because some patents with 100's of compounds in a drug for example, will not able to filed without SUBSTANTIALLY DEVALUING the patent with an ESD (inequitable conduct below). But the opinion goes on...

-"USPTO in some cases attempt to apply the rules in a way that makes compliance essentially impossible and deprives the applicant of rights then judicial review available under 5 USC 706." Yes, this 5/25 ESD deprives applicant of rights as was argued IN THIS CASE ACTUALLY, so the court is recommending I SEEK JUDICIAL REVIEW AGAIN?

[EG]

"Dude, get a freaking grip."

MM,

I do have a grip, but Judges Prost and Bryson don't on the reality here. Using their naive logic, the PTO could just as easily turn the ESDs into mandatory Applicant Quality Submissions (AQSs) (the "Documents of Doom") that would be required for all patent applications filed. What's to stop the PTO from doing that, and turning the PTO into "patent prosecution hell"?

[Bob the Builder]

W,don't know if you are an Examiner. If so, too bad for you.

There is a reason why Examiners from other patent offices consider US examiners to be the most incompetent. They wonder why US practitioners have to lead them by the hand, and the US examiners still do a pathetic job. The need for ESDs for them to get it right, when the rest of the world doesn't even require applicants to submit known, relevant prior art, makes the US examiner seem all the more sad.

[TJ]

Joe, everything you said about the Federal Circuit's IOP is correct. The full court looks at every precedential opinion before it issues, a judge can call for an en banc poll before the opinion issues, and no order issues even if such a pre-issue en banc poll fails.

But two things. First, the inference that an en banc petition is necessarily futile because the full court has already had the chance to look at the case is empirically false. Most en banc grants come after a petition for rehearing. Second, a pre-issuance en banc poll delays the issuance of the opinion. This opinion issued three months after argument, on a fairly complex case. Based on this speed, I am doubtful that an en banc poll was requested.

[Jmac]

it seems to me that they (USPTO) would have been smarter to just increase the fees for subsequent RCE's/Continuations and additional claims to amounts that are grossly higher than current rates rather than go with their current route. This would accomplish all of the USPTO's goals without the need for this litigation, plus give them added revenue if some did decide to pay for the additional claims/RCE's/Continuations.

Just seems like economics 101 to me.

[BigGuy]

"Oh, and the 25 claim rule(s) did not concern just one application. Rather, the number of applications did not matter and that is why there was the worry about tracking all the related cases."

Relax. From the PTO's powerpoint summary of the rules, compared to the original proposal (emphasis added):

"Changed claims threshold from 10 representative claims per invention to 5 independent claims and 25 total (5/25) claims PER APPLICATION.
Permits up to 15/75 claims per invention without justification or examination support document (ESD)."

Note that the 15/75 "claims per invention" is based on the 3 apps/family limitation. Without the continuation limits, the claims per invention limitation is also. "W" is right that the rules are carefully intertwined, but the result is the opposite of what he suggests. Rather than providing redundancy, the intertwining means that if a single rule falls, the entire scheme falls.

The PTO loses. Even 6 will figure this out eventually.

[Look Ma, I am an Examiner]

Inequitable conduct and pros. history estoppel
----------------
-Inequitable conduct is "too speculative" and has "not yet [been] applied to the context of an ESD." Its very simple. If a reference is not found in an 5/25 ESD and it later is used against the patent SUE YOUR PATENT LAWYER. Omniscience of all art is now our duty as attorneys.
-Pros. History Estoppel - "We do not believe applicants have right to remain silent through prosecution", then they state responsibilities of candor and the requirement of 112, first and second paragraph. Actually, applicants are not silent, we submit IDS's and make arguments for our client. If we said anything more it would be time to SUE YOUR PATENT LAWYER.

CONGRATS TO THE PTO for gaming the system! Increase the price of indep. and depend. claims if you must but do not muc up the system even more with a flip burden of proof for 5/25 claims.

[nobody asked but]

Anonymously yours,

You do bring up a good point about the limitation of 25 claims per invention. My guess is that the patent office is free to set a limit to the number of claims per application with the appropriate ESD statement, but the patent office cannot probably not enforce such rules across the continuations filed. The rules for continuations allows a party to claim different inventions from a common application.

To count the amount of claims across continuations for different inventions would probably run counter to the application of 35 U.S.C. 120, if the ESD rule survives analysis under the APA stuff.

So, at worst, one would be required to submit an ESD if you file more than 25 claims (5 independent claims) in one application, but I would not think that the ESD requirement would apply to an application and its child where the total number of claims from such applications exceeds 25 claims.

[Jules]

To some companies, increased costs mean nothing except now its employees get paid less. That excludes the higher ups who still get bonuses.

[Patent and Trademark Attorney]

This is far from over. What a waste of government money fighting this and even making these rules. An applicant has 20 years from his filing date. If it takes longer due to continuations, he loses part of this term and he pays a fee for the continuations. Likewise, if an applicant has more than 25 claims (actually more than 20), he pays for each additional claim. The USPTO has structured it in such a way that their examiners don't get more time to review the claims when there are more, but they charge the applicant for these claims. This is already an inequity and they are solving it by harming the applicant further rather than making USPTO procedures fair, e.g. get what you pay for.

[anonymously yours]

Thanks for the review BigGuy. I'm getting old and frail. It's hard to keep track of all this BS anymore :).

[W]

BigGuy - the 15/75 only applies if the continuations are serially filed. They cannot exist in parallel. Sometimes, you have to go beyond mere Powerpoint slides. And, I'm flattered you presumed I was male.

[6]

PDS: it shifters tha burden!

"Thus, while the rule may put a burden of production on the applicant, the examiner maintains the burden of persuasion."

No, like I said, it creates a whole new burden for the applicant. The court didn't go so far as to remind us that the examiner also has his traditional burden of production of substantial evidence even as he retains his burden of persuasion.

[6]

Even though the court appears to have refused to consider the PTO's position on rule 78 that it was referring to a single application rather than any number of applications I will concede that perhaps the court did not ere on the matter of rule 78 as a whole.

If the case does go en banc I hope the PTO re-presents that argument and forces the en banc court to address it on the merits as I don't believe the PTO even takes issue with what the court said on rule 78 other than that. If it applies to any number of applications then surely the pto cannot add in the additional requirements. Nobody disputes that I don't believe.

[6]

Plus it seems to me like they should have just made the PTO change rule 78 to where it would only affect a serial chain of cons instead of simply striking the rule.

[Just Visiting]

"Note that the 15/75 "claims per invention" is based on the 3 apps/family limitation. Without the continuation limits..."

You've forgotten the rules about patentably indistinct claim sets in applications. If the claims are not completely patentably distinct, then you get 5/25 applied accross two or more applications regarless of whether they are continuations or just separately co-pending appliations.

[6]

"Cf. Henriksen, 399 F.2d at 258 (“So read, ‘an application’ does not necessarily refer only to a single application.”); 1 U.S.C. § 1 (“[W]ords importing the singular include and apply to several persons, parties, or things . . . .”)."

Hmm, well it looks like that entire argument is foreclosed by the first section of the USC. Ok then I guess that's settled. Looks like you won on that one, except on terms far removed from your arguments. Shout out to Sunny since I'm sure he's lurking too.

[BigGuy]

W, you might be right on the 5/25, 15/75 issue. So, if the rules go into effect as amended by the court, you can have as many claims as you want, presuming you're willing to wait for them, or presuming you can convince the PTO that the claims are "patentably" distinct. That's one in the win column for the PTO. But I still don't expect these rules to go into effect any time soon.

[anonymously yours]

6, what are you crowing about? You are an examiner, right? Nothing here is good for you, except maybe you won't have to do as many restrictions (which you got time for anyway). The applicants will bear the brunt of this nonsense and eventually you and other examiners will be scrambling for work. I'll reserve my hahahahaha for that time.

[Ho hum]

"Oh, so you can make a claim more broad by amending with an RCE? I thought that goes against the rules of compact prosecution. Am I wrong?"

The rules of compact prosecution? You mean the unwritten rules that the USPTO flaunts hundreds of times a day?

Regardless, once you've filed your RCE, you can do just about anything you want. I don't believe you can prosecute a non-elected set of claims, but that doesn't matter in the context of the discussion. With a continuation, you can do anything you can do with an RCE.

[Ho hum]

"Ho hum - how can the lower court consider the ESD vague when there is already an accelerated examination program that uses them? The majority of AE petitions are being granted - so, apparently, applicant's are able to do them."

There are better people here that no the requirements for being "vague," but I highly doubt that a 50% AE grant rate qualfies.

[Mad]

6k, you crack me up. Only a government employee can be thrilled about a decision that will directly adversely affect his job.

[Just an ordinary inventor(TM)]

The Great Judge Rader wins the "Judge of the Year" award in my book:

“RADER, Circuit Judge, concurring in part and dissenting in part.

I concur with this court’s conclusion that the PTO is not entitled to Chevron deference with respect to its own rulemaking authority. However, in my view, the Final Rules are substantive, not procedural. Thus, I would affirm the district court’s conclusion that the PTO exceeded its statutory rulemaking authority in promulgating these rules.”

[6]

I would agree with RADER except for the fact that rules issue routinely that are "substantive" under his definition of the term. Is it his position that our regulatory frames under which nearly every administrative agency in the gov function are replete with invalid rules? I doubt so, but I don't see how he can square his interpretation with that. And I doubt he could, if ever he put his mind to it. In that respect you see an instance where, should this case go en banc and hold to his liking, he would just be begging the SC to clarify their position in Chrysler.

In essence, he relies far too heavily on a sound byte to the neglect of the rest of the Chrysler decision.

[W]

Ho Hum - accelerated examination has a 63% pass rate so far, not that anyone's counting. Not counted in this are ones that are still pending - so, this does not mean that 37% have been denied - many are still in prosecution.

[greasey]

"We may be heading for the 'Dark Ages' in patent examination before the PTO."

Heading for? The lights went out long before they got to Carlyle.

[6]

Also, it appears that RADER believes that the substantive/procedural inquiry is one of degree. I believe his colleagues agree with him even though he believes they do not. They simply believe that the degree in the present case merits only judgment as procedural. Which frankly has been an enunciation of my feelings on the matter since the beginning.

I agree with his analysis of the chamber of commerce case, but in that instance the degree for a finding of substantiveness is low. The whole case turned on practical trivialities. And, they are determining substantiveness in reference for the notice and comment making bs, as opposed to whether or not the regulation can be enacted ever. A "different kind" determination of substantiveness where the difference between such determinations had been brought up already in the decision previously.

I do agree with him that perhaps they should have had to go through the notice and comment. However, as I personally regard all this notice and comment ridiculousness as ridiculousness on its face, I wouldn't bother with upholding such nonsense, although, if others feel differently about the matter, and wish to qq, they are within their right to. This being because the congress of today caters to qqers from all over, rather than only merit filled qq.

"By way of example, consider the following scenario: An applicant receives a Notice of Allowance for application A. Before paying the issue fee, the applicant discovers a material prior art reference in a foreign application. Mindful of the duty to disclose material information to the Office, that applicant would file an RCE, an IDS citing the reference, and an amendment to account for the newly discovered prior art. So far so good, but what if the reference is not only material to application A, but also material to continuation applications B and C, members of the same application family that have also received Notices of Allowance?"

That would probably be a situation where the PTO grants additional RCE's as the applicant didn't know he would have to disclose the foreign reference. I have to give him credit though, he finally found a situation where extra RCE's would be likely to be granted.

"For example, in a pharmaceutical application, an applicant may claim not only the genus compound, but also a number of species, intermediates, methods of making, and methods of use."

So submit an application for the genus compound, an application for the species compounds (or maybe toss them in with the genus app), an application for the intermediates, an applications for the methods of making, and applications for the methods of use. Instead of submitting one huge application and declaring it to all be one big invention when it is in fact hugely differing subject matter. Why is this so hard to comprehend?

"Final Rule 75 frustrates the quid pro quo contemplated by the Patent Act."

I disagree, it merely addresses one of the myriad of loopholes allowed by the Patent Act that it to this day fails to take care of and which is regularly taken advantage of by applicants.

So much of today's legal jurisprudence is a relic from the days of yore. Much of it is still relevant, but much of it leaves much still yet to be desired, and attempts to rectify the grossest aspects should not be so addressed. The majority can see this. Rader is still lost in the 1950's.

"the ESD requirement improperly shifts the burden of proving patentability onto the applicant — a direct conflict with this court’s interpretation of section 102."

I, and the majority have to disagree, simply because that is something you can never "prove", you can, at the most, suggest that something appears to be patentable at a certain point in time. And it isn't in conflict with the patent laws to have applicants say that. The in fact implicitly say that everytime they submit a claim that submitted under U.S.C 112. That's an unconvenient little fact nobody likes to talk about when they are discussion these rules. Applicant ROUTINELY tell me that their claims are patentable over the prior art for x reason in responses already, it hardly seems a horrible burden to have them do that at the beginning.

"This shift of the burden of proof (or production, for that matter) onto the applicant significantly alters practice before the PTO and represents “a change in existing law or policy.”"

The problem is, as I've noted, and your buddies noted, that there was no shift, there was creation.

"Satisfaction of the ESD requirement
2008-1352 13
2008-1352 14
requires “more than adherence to existing law” and amounts to “more than the incidental inconveniences of complying with an enforcement scheme.” See Chamber of Commerce, 174 F.3d at 211-12"

I agree, however the case you are citing is, once again, a case where the standard for substantiality was 1. Low and 2. in regards to the notice and comment provisions which may very well be a distinguishable matter of substantiality which should be adjudged at a low degree every time. Thus having pointed a finger at an improper citation and rational to base your position off of, it necessarily fails to make your overall case, which is namely whether the current substantiality is sufficient to invalidate the rules in total forevermore, by shifting them from procedural to substantial when they clearly start off as being on their face procedural.

That is why the dissent will lose if this goes en banc. Overall, it looks like the perfect setup. The rules will either be invalidated for a valid reason this go around, or rule 78 will be changed to talk about serial cons and the whole thing goes through sometime.

[6]

"6k, you crack me up. Only a government employee can be thrilled about a decision that will directly adversely affect his job."

I will trade never having to do a 100 claim long app without substantial IDS/ESD references and support and a greater allowance rate for the once in a blue moon case that gives me 2+ RCE's. Most of my cases are turning out to have pleaded their way into an allowance by 3rd amendment, or would be very close on the AF amendment on that last RCE such that I might give it to them if they had a good and convincing conference. In short, I think it is nearly neutral towards my job, although that balance shifts every day as the want for more claims goes up and up and up every day.

Personally I believe people using ESD's will be encouraged to get to allowance much faster because they will have some idea of what is out there.

[greasey]

"... when it is in fact hugely differing subject matter. Why is this so hard to comprehend?"

Like I said....

[Government isn't just inefficient, it mandates inefficiency]

"Personally I believe people using ESD's will be encouraged to get to allowance much faster because they will have some idea of what is out there."

Shouldn't that already happen after the 1st OA? Why pay to do the same work twice?

Also, who is going to do the better search -- the Examiner whose job is to know the particular slice of technology being examined or some random searcher who is searching semiconductors one day and massage devices the next day?

[6]

"I do have a grip, but Judges Prost and Bryson don't on the reality here. Using their naive logic, the PTO could just as easily turn the ESDs into mandatory Applicant Quality Submissions (AQSs) (the "Documents of Doom") that would be required for all patent applications filed. What's to stop the PTO from doing that, and turning the PTO into "patent prosecution hell"?"

Nothing. Nothing at all. Be glad that we didn't.

[Malcolm Mooney]

"some random searcher who is searching semiconductors one day and massage devices the next day"

Most modern massage devices comprise a semiconducting material.

[No One in Particular]

Can I get a patent in China?

If I can, I don't need U.S. Patents and the USPTO can go frak itself.

[Malcolm Mooney]

"Nothing. Nothing at all. Be glad that we didn't."

No need to be nasty, 6. Why not simply enjoy a celebratory beer?

[Jules]

No One, another battlestar galactica fan I see. You have chosen wisely.

[me]

Read the conclusion - all the rules are going down, it will just be under different holdings.

[Bruce Hayden]

What was not addressed, and was central to my problems with the rules, was the imputation of having the same invention if you had the same inventor within a certain time period. I not infrequently run into a situation where large software projects are filed as multiple patents with multiple distinct inventions at approximately the same time. I had one about two years ago where it was several million lines of code and ended up as maybe 20 patent applications, each with very distinct claims sets. There is very little chance that there would be any double patenting rejections given those claim sets. And yet, they would be considered a single invention for EDS, RCE, etc. purposes.

And what makes this all worse is that the RCE limit would be applied to the entire family, in an environment where at least one RCE per application is now fairly common. And, yes, the solution now, assuming that this stands, would be to use continuations instead of RCEs (remember, RCEs are essentially streamlined file wrapper continuations, which in turn were streamlined continuations).

[Just an ordinary inventor(TM)]

By George, I think Mr. me is right -- here is the Cnclusion:

"Because of the complexity of this case and the numerous arguments presented on appeal and before the district court, we think it is important to expressly summarize what we believe remains for the district court on remand. This opinion does not decide any of 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."

[Bob]

Re the 5/25 claim limit for triggering an ESD--no, it does *not* apply to all applications across a patent family. Rule 75(b)(4) reads:

"If a nonprovisional application contains at least one claim that is patentably indistinct from at least one claim in one or more other pending nonprovisional applications . . . the Office will treat the claims (whether in independent or dependent form) in the first nonprovisional application and in each of such other pending nonprovisional applications as present in each of the nonprovisional applications for purposes of paragraph (b) of this section."

The key word there is "pending." If you file a string of continuations, allowing earlier cases to issue or go abandoned, then the claim limits will not reach across sequential cases. So it could still be a hindrance, though not a show stopper.

[Bob]

Of course, the above comment assumes that a limit on serially filed continuations would likewise be held inconsistent with section 120.

[curious]

Patent Hawk on the patent prospector website says:

"If Judge Newman had been on the panel rather than Prost, a different ruling entirely"

Patent Hawk is probably correct.

[Abe Hershkovitz]

The PTO will have to re-think this. (1) If too many roadblocks are set up by way of claim limitations and ESD requirements, filings of continuing applications will greatly increase, which is what the PTO tried to reduce; (2) Examiners like continuations, especially if they will have limits on the number of claims in a single application; Examiners prefer two applications with 25 claims each, over one application with 50 claims because of the productivity count system in place; management prefers one application with 50 claims because that requires higher productivity by examiners; this creates an internal tension within the Agency; (3) the increased filings that are likely to result from the PTO rule package as it now stands, will persuade the PTO that it's no longer in the PTO's interest to move ahead with their proposals. While Judge Rader got it right, I don't see the Agency moving ahead with any portion of its package, it no longer makes sense.

Perhaps the PTO can consider some concepts as suggested below, subject to further refinements, and which might get congressional support to avoid the ever increasing backlog. How about three classes of utility patents? Class 3 patents will be examined for compliance with 101, 112, and 102 relative to prior art introduced by applicants, with no further search required by the Examiner, except as the Examiner deems necessary. Class 2 patents would be examined largely as they are today. Class 1 patents would be examined under an opposition/reexamination type scheme with input from patent opposers. Compared to the current fees, the search and examination fees charged by the PTO would be in the range of $200 for class 3 examination and $5,000 for class 1 examination (compared to the current approx. $800 for a large entity). Anyone would be permitted to request examination of an issued patent under a higher class at any time during the life of the patent. Thus, a class 3 patent could be subjected to a class 2 examination or a class 1 examination and a class 2 patent could be subjected to a class 1 examination upon request by the patentee or a patent opposer. Patents which were issued as of the date of enactment of this new law and which are still in force, would be deemed to have acquired class 2 status and could therefore undergo class 1 examination upon anyone's request.

Under this scheme, if 70% of applications were filed under class 1 examination, the PTO backlog could be signficantly reduced because Examiners would be able to examine 2-4 applications in the time it now takes them to examine a single application. An expanded Central Reexamination Unit would be handling all class 3 examinations.

If it is still true that only 1% of all issued patents will become commercially viable, does it really make sense to give all applications the same examination effort (or lack of effort)?

[CB]

Both Prost's opinion and Bryson's concurrence hint that the PTO could limit the number of serial continuations because of some alleged ambiguity in 35 USC 132. If the PTO latches onto that and issues a new rule limiting serial continuations, then the PTO would have won the war - at least until we can get Congress to rectify the situation, but how many years has Patent Reform been stuck on The Hill?

The Federal Circuit vacated and remanded on the 5/25 and ESD rules, so more court proceedings have to run their course before the rules can take effect.

[NIght Writer Patent Attorney]

>>The Great Judge Rader wins the "Judge of the >>Year" award in my book:
>>“RADER, Circuit Judge, concurring in part and >>dissenting in part.

Just Ordinary: I agree with you. Rader understands patents. He understands that the reason our country has been the source of innovation is the patent system. Unfortunately, there is so much smoke being blown that few people get that what Dudas was doing to patents is the same as what Bush did with Wall Street. Bush put people in charge of the regulatory agencies to destroy the regulatory agencies. Burn it down from the inside.

These rules are an offense to our civilization. Judges such as Moore are just like Dudas that were put in to burn the system down from the inside. They believe that their goals justify their means.

If anyone has any real statistics that patents are really causing problems, I would like to read them. All the statistics I've read say that patents have been a boon to our economy. The papers I've read on software patents--real papers that actually look at real software patents--show that they are pretty good patents.

The problem in my opinion has been the PTO itself. And rather than fixing it, we had someone attempt to burn the PTO down.

And I practice patent law. I've been an inventor. I've done litigation where companies have been sued with software patents. I've worked with start-ups. I've worked with large corporations. Patents cause problems, but the benefits far outweigh the problems from my personal experience. I've read many papers and have yet to see a single paper that supported the proposition that patents are causing any great harm. I've yet in my practice to see a company that has been harmed to any great degree by this so called "patent thicket."

What I see is a bunch of sychophants making up marketing terms to try and get that fed. cir. appointment or money from big corporations, or to sell a book. No real statistics. No real evidence. And from people that have never written a patent application and have never worked with inventors to build a company (which has been the engine of growth).

What sickens me is the lack of real dialogue.

If patents are so bad, put up the evidence. Even anecdotal evidence of several companies and what happened to them. Or how some start-up was prevented from doing x because of patents. At least something other than this bizarre abstract notion that patents are bad--evil patents. Let's try to get past Bush/Dudas/Moore/Cheney/Lemley and the like.

[At least I never slept with Lumbergh]

"Most modern massage devices comprise a semiconducting material."

And, apparently, along with everything else, Mooney knows "modern massage devices"

[Znutar]

NWPA - exactly.

I thought this was a good read:

http://www.paulgraham.com/softwarepatents.html

[Ms. Culpability]

Prost's faith that inequitable conduct considerations have a negligible impact is astonishing. What planet do these people live on?

Anyway, the economic downturn has made PTO's dream come true: applicants don't bother them so much with work. Next time they should should be careful what they wish for.

[Just an ordinary inventor(TM)]

Dear Night Writer Patent Attorney,

Your comment was thoroughly enjoyed.
I'll drink to you.
Thanks.

[Mad]

"Most of my cases are turning out to have pleaded their way into an allowance by 3rd amendment"

I thought all you saw were "inventionlols?"

[curious]

"If patents are so bad, put up the evidence. Even anecdotal evidence of several companies and what happened to them. Or how some start-up was prevented from doing x because of patents. At least something other than this bizarre abstract notion that patents are bad--evil patents."

interesting comment, Night Writer

[Zak]

I rarely post, but this opinion has me worried. Of course I am worried about the negative effect the surviving rules may have if they go into effect. This, however, is not me biggest concern with this opinion. I am more worried about the blind eye Prost turned towards the stated intent of the PTO in implementing the new rules; especially rule 1.114.

At face value rule 1.114 can be seen as strictly a procedural rule, as the Prost and Bryson held. If fairly and evenly implemented it should not deny an inventor any of her substantive rights granted under 35 USC 132. The PTO in their responses to questions published with the rule packaged, however, clearly indicated an intent to apply 1.114 arbitrary, capricious, with an abuse of discretion, and otherwise not in accordance with law to deny inventors of their right to have continued examination of their applications under 132. Accordingly, the PTO has clearly stated that it will implement procedural rule 1.114 such that it has a substantive effect.

As did the District Court and Rader, I cannot see the difference between an agency directing its employees to implement a procedure rule such that it has a substantive effect and the straight out issuance of a substantive rule. In both instances a government agency has taken clear steps to deny substantive rights. The Courts should not allow such action.

To be fair, Prost did indicate that if the PTO implemented the rules as they said they would then an applicant denied his substantive right would have recourse under 5 USC 706. While true, the problem with this approach is that the implementation of the rule directed by the agency has to be challenged on a case by case basis. When, as here, the agency has drafted a guidance document, training material, or otherwise indicated an intent to implement a global implementation of the rule by its agents to deny substantive rights this case by case approach will clog the court system. Furthermore, it may take years for the agency to be put in its place and have its impermissible enforcement of a procedural rule struck down. Several will suffer during such a delay.

I think the public is better protected from abusive acts of an agency if the courts are allowed to strike down any stated planned implementation of a procedural rule that will have a clear substantive effect. This does not mean that rule so enforced should be struck down, unless it cannot be enforced in a permissible manner.

The problem here is that the District Court upset with the substantive consequences of the PTO’s stated intention of enforcing Rule 1.114 struck down the rule. Ignoring the intent of the PTO Prost resurrected the rule 1.114. Perhaps things would have been different if the District Court held that it would not lift its injunction on Rule 1.114 until the PTO changed its implementation of the rule such that it would no longer be implemented with an impermissible substantive intent. In other words, instead of striking down the rule maybe the district court should have just struck down the PTO’s planned enforcement of rule 1.114.

[anonymously yours]

What I dislike immensely is how these PTO guys seem to find employment from the very guys they serve after destroying the agency and system.

[carnac]

Zak, I have the some concerns re rule 1.114. Good posting

[carnac]

"same"not "some"