While the law is tied to tradition, it is
an ever-changing body of rules and
knowledge. Recently, changes were made in the United States Patent and
Trademark Office’s (PTO) rules that may
be detrimental.
Smart Business asked William A. Munck,
chairman of the Intellectual Property section at the Dallas law firm of Munck Butrus
Carter, P.C., to update us on PTO’s latest
changes and why they may hurt patent
applicants.
Why does it seem as though the U.S. PTO is
amending its rules all the time?
The PTO continually proposes initiatives
that the PTO believes will make its operations more efficient, will ensure that the
patent application process promotes innovation and will improve the quality of
issued patents.
As with any government entity, sometimes those changes are more effective
than other times. One of the most controversial proposed rule changes occurred in
August 2007 when the PTO published a
‘final rule notice’ in the Federal Register.
This final rule revises the PTO’s rules of
practice in patent applications relating to
continuing applications and requests for
continued examination practices and for
the examination of claims in patent applications. Substantially all patent practitioners believe that the proposed final rules, if
implemented, will both severely and negatively alter traditional patent prosecution
practice.
How can the application of the new rules
result in so much damage to the patent applicant?
Under the new rules, the restrictions on
patent claim drafting and on continuation
practice are both retroactive and fairly
capricious. Implementing the final rules
will, as a practical matter, cause patent
applicants to strongly consider abandoning
pending patent claims or, worse, entire
patent applications.
The proposed rules include limitations
that effectively limit the patent applicant to
two continuation patent applications and one request for continued examination per
patent family, whereas the current rules
have no such limitations. Another fairly
oppressive modification limits the patent
applicant to five independent claims and 25
total patent claims per patent family,
whereas applicants previously have had no
such limitations.
If these rules are implemented ultimately,
and in substantial part, retroactively,
patent applicants will be forced to surrender the existing claim scope without first
having adequate opportunity or consideration before the PTO. This is a violation of
the patent applicant’s rights.
By way of example, David Kappos, chief
patent counsel for IBM, went on record to
state that in order for IBM to comply with
the retroactive requirements of new rules
more than 30,000 issued patents and patent
applications would have to be reviewed.
Kappos stated that, in addition to the time,
IBM would incur over $10 million in legal
fees and internal expenses — exclusive of
any loss of intellectual property rights.
Several parties filed suit against the
Commissioner of Patents, is that correct?
Yes. The proposed new rules were
opposed in separate lawsuits filed by
GlaxoSmithKline (Glaxo) and earlier by Triantafyllos Tafas, a sole inventor, and
supported by amicus curiae briefs from the
American Intellectual Property Lawyers
Association; Elan Pharmaceutical Corp.;
HEXAS LLC, The Roskamp Institute, and
Tikvah Therapeutics, Inc.; the pharmaceutical manufacturer’s trade organization; the
Biotechnology Industry Organization; as
well as a letter from Senator Charles
Schumer of New York. Each of these parties uniformly opposed the proposed new
rules.
On Nov. 1, 2007, Judge James Cacheris of
the Eastern District of Virginia issued what
is perhaps the most important ruling in
U.S. patent law this year. Judge Cacheris
granted Glaxo’s motion for a temporary
restraining order and preliminary injunction against the Commissioner of Patents
to prevent the PTO from implementing its
new continuation and claims rules.
The court found preliminarily that the
PTO was not granted substantive rule-making authority under the law. The court
voiced ‘serious concerns’ that the new
rules are contrary to the Patent Act, citing
authority holding that the PTO did not have
the power to restrict an applicant from filing a continuation application.
At the end of the day, do you believe that the
new rules will be implemented?
The proposed new rules exceed the
Commissioner’s and the PTO’s statutory
authority, and the rules are contrary to the
Patent Act. We feel that retroactive application of the new rules to pending applications is prohibited under the law to retroactive application of agency regulations.
Fundamentally, irreparable harm will be in
the uncertainty that the proposed new
rules create and in the negative impact on
investment that would follow from such
uncertainty.
WILLIAM A. MUNCK is chairman of the Intellectual Property
section at Munck Butrus Carter, P.C. where he concentrates his
practice on domestic and foreign intellectual property procurement, exploitation, enforcement and counseling. He emphasizes
long-range corporate strategies for private financing, public offerings, mergers, acquisitions and establishing market leadership.
Reach him at [email protected].