On Friday, March 20, 2009, the Court of Appeals of the Federal Circuit ("CAFC") handed down its decision in Tafas et al. v. Doll, (Fed. Cir. 2009 – hereinafter "Tafas"). The Court affirmed in part, vacated-in-part and remanded a decision by the Eastern District Court of Virginia that four new rules promulgated by the United States Patent and Trademark Office ("USPTO") exceeded the scope of the USPTO's rulemaking authority. In general, the CAFC held that the rules were procedural and, therefore, not outside of the bounds of the USPTO's authority. While the CAFC held that one of the rules, which limited the number of continuation applications that an applicant could file, was inconsistent with the Patent Act, the Court remanded the remaining rules to the district court for further review consistent with this opinion. Depending upon the district court’s holdings, the decision by the CAFC may result in limitations on the number of claims that an applicant can file for a single invention unless an examination support document (ESD), which requires an applicant-conducted search and arguments distinguishing the claimed invention over the prior art found in the search, is filed. The decision may also result in a limit on the number of Requests for Continued Examination (RCEs) that an applicant can file in a family of related applications. 

In August 2007, the USPTO issued four new rules that would go into effect on November 1, 2007.  The four rules (the New Rules) were 37 C.F.R. §§ 1.75, 1.78, 1.114 and 1.265.  For more details on the New Rules, click here.

On the eve of implementation, the district court preliminarily enjoined enforcement of the New Rules.  (511 F. Supp. 2d 652 (E.D. Va. 2007)). The appellees then moved for a permanent injunction against enforcement of the rules based on the New Rules being substantive, rather than procedural, and as such in violation of the USPTO's rulemaking authority. The district court granted the appellees' motion for summary judgment that the New Rules were invalid.  (541 F. Supp. 2d 805 (E.D. Va. 2008)).

The USPTO appealed the district court's decision primarily arguing that the New Rules are procedural rather than substantive, and thus within the scope of the USPTO’s rulemaking authority.

Succinctly, relying heavily on the decision in JEM Broad. Co. v. FCC, 22 F.3d 320 (D.C. Cir. 1994), which held that "hard look" rules imposed by the FCC did not change the substantive standards by which license applications were evaluated, the CAFC determined that the New Rules are procedural in nature, rather than substantive. The Court held that the New Rules "govern the time of and materials that must be submitted with patent applications.  The Final Rules may 'alter the manner in which the parties present . . . their viewpoints' to the USPTO, but they do not, on their face, 'foreclose effective opportunity' to present patent applications for examination. JEM, 22 F.3d at 326, 328." (Tafas at pg. 14). However, while all the New Rules were held to be procedural rather than substantive, New Rule 78 was held to be invalid on other grounds.  For more details on the Court's decision, click here.

In conclusion, the CAFC "affirm[ed] the district court's grant of summary judgment that Final Rule 78 is invalid, vacate[d] its grant of summary judgment with respect to Final Rules 75, 114, and 265, and remand[ed] for further proceedings consistent with this opinion."  (Tafas at pg. 31). On remand, the Court provided the district court with the following specific instructions:

"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."


As this case is not finally decided, but has been remanded to the district court level for further review, it is unclear whether and when the USPTO’s New Rules will take effect.  However, it does appear likely that at least some form of New Rules 75, 114 and 265 will be held enforceable.  Enforcement of these rules may limit the number of claims that can be filed toward a particular invention in a family of related applications without filing an ESD. These rules may also limit the continued prosecution of a family of related applications by use of RCEs.

Please contact D. Brian Shortell, Ph.D., or any member of Ballard Spahr Andrew & Ingersoll's Patents Group should you wish to discuss the impact of the USPTO's proposed rules on patent prosecution strategy in general or on your patent portfolio specifically.

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