By Donald Zuhn —
Last week, the U.S. Patent and Trademark Office and USPTO Director Jon Dudas filed their reply brief in the Tafas v. Dudas appeal. On the same day that the Patent Office filed its reply brief, Patently-O provided links to the fifteen amicus briefs filed in the appeal, thirteen of which support Plaintiffs-Appellees Dr. Triantafyllos Tafas, SmithKline Beecham Corp., SmithKline Beecham plc, and Glaxo Group Ltd., and two of which support Defendants-Appellants the USPTO and Director Dudas. In August, Patent Docs reported on one of the amicus briefs filed in support of Defendants-Appellants by the Public Patent Foundation (PUBPAT), AARP, the Computer & Communications Industry Association (CCIA), Consumer Watchdog, Essential Action, Initiative for Medicines, Access & Knowledge (I-MAK), Prescription Access Litigation (PAL), Public Knowledge (PK), Research on Innovation (ROI), and the Software Freedom Law Center (SFLC) (see "Public Interest Groups Back USPTO in Tafas v. Dudas Appeal"). With oral argument scheduled for December 5, 2008, Patent Docs will be reporting on a number of the other amicus briefs filed in the Tafas appeal in the coming weeks. Today, we will be addressing the other brief filed in support of Defendants-Appellants.
The Brief Amici Curiae of Intellectual Property and Administrative Law Professors in Support of Appellants was signed by Stanford Law School Professor Mark Lemley (at left) on behalf of Prof. Stuart Benjamin (Duke Law School), Prof. Robin Feldman (U.C. Hastings College of the Law), Prof. Marshall Leaffer (Indiana University School of Law, Bloomington), Prof. Mark McKenna (Notre Dame Law School), Prof. Peter Menell (University of California at Berkeley School of Law), Prof. Joseph Miller (Lewis & Clark Law School), Prof. Craig Nard (Case Western Reserve University School of Law), Prof. Arti Rai (Duke Law School), Prof. Michael Risch (West Virginia University College of Law), Prof. Katherine Strandburg (DePaul University College of Law), and Prof. John Thomas (Georgetown University Law Center). The Law Professors' brief argues that the Patent Office's continuation and claims rules (Final Rules), which District Judge James C. Cacheris of the Eastern District of Virginia enjoined on April 1st, should be evaluated under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984); are a reasonable interpretation of the statute; and are not arbitrary and capricious.
The Law Professors begin by arguing that the Supreme Court's decision in Dickinson v. Zurko, 527 U.S. 150 (1999), establishes that standard administrative law principles developed in Chevron and its progeny govern judicial review of the USPTO. With respect to the Tafas appeal, the brief contends that the Federal Circuit should first decide whether Chevron is applicable. Not surprisingly, the Law Professors believe that the Patent Office is owed Chevron deference with respect to the Final Rules. According to the brief, "[t]he rules at issue are unquestionably directed at the control of PTO procedures — under what circumstances applicants can file continuation applications, and what information applicants must disclose along with those applications that are particularly large," and the Patent Office acted using notice and comment rulemaking. As a result of the procedural nature of the Final Rules, and the PTO's use of notice and comment rulemaking, the Law Professors argue that the Final Rules must be analyzed in accordance with Chevron.
The brief takes the District Court to task for determining that the Final Rules must be substantive because they "constitute a drastic departure from the terms of the Patent Act as they are presently understood." The Law Professors argue that Judge Cacheris "wrongly assumes that the rules in fact represent a drastic departure," contending that "the PTO already uses the doctrine of prosecution laches to limit continuation applications" (as a result of the Federal Circuit's decision in In re Bogese, 303 F.3d 1362 (Fed. Cir. 2002)), and that the Patent Office used "its procedural rulemaking authority to promulgate Rule 105, which authorizes examiners to require additional information from applicants not simply in cases of large applications but in all cases" (emphasis in brief).
Tackling the Final Rules limit on continuations, the Law Professors contend that 35 U.S.C. § 120 "does not compel the PTO to give applicants an unlimited number[] of bites at the apple," but rather merely "allow[s] applicants that file continuation applications to benefit from the priority date of the first application." With respect to Rule 265, which would require applicants to submit an Examination Support Document (ESD) in order to prosecute more than five independent claims or 25 total claims in a single application (the 5/25 rule), the Law Professors draw an analogy to "the PTO's promulgation of Rule 105, which allows an examiner to require the submission of 'such information as may be reasonably necessary to properly examine or treat the matter,'" and which was "explicitly approved" in Star Fruits S.N.C. v. United States, 393 F.3d 1277 (Fed. Cir. 2005).
The brief next argues that the Final Rules — at least the rules limiting continuations and requiring ESDs — "clearly meet the extremely deferential 'reasonableness' standard enunciated in Chevron step 2" (i.e., an agency’s reasonable interpretation of a statute should be upheld so long as Congress has not "directly spoken to the precise question at issue"). In particular, the Law Professors contend that:
This case is hardly the rare exception that fails under step 2. It is perfectly reasonable for the PTO to attempt to manage its ever-burgeoning case load by preventing the repeated filing of applications directed at the same subject matter. It is also reasonable for the PTO, which has only a small amount of time to review any given application, to seek additional information on applications with large numbers of claims.
The Law Professors conclude their brief by arguing that the Final Rules are not arbitrary and capricious, stating that "[e]ven if the PTO's solution to the problem it faces is not necessarily the optimal one, it is satisfactory." The Law Professors note that in crafting the Final Rules, the Patent Office collected more than 500 comments and spent more than a year analyzing them. The brief points out that in response to these comments, the Patent Office "changed its proposal from one that would have automatically allowed only one continuation, continuation-in-part, or request for continued examination to a proposal that automatically allows two continuations or continuations-in-part as well as one request for continued examination," and "[f]ollowing the recommenation of various commentators, . . . changed its original proposal for 'representative claims' designation into the current '5/25' rule." The brief also states that the Final Rules "permit applicants to seek additional continuations beyond the three allowed automatically on a showing of good cause" (although the brief conveniently omits any discussion about the impossibly high standard the USPTO set forth for showing "good cause").
According to the brief, the "serious problems" caused by the U.S. patent practice of permitting "unlimited" continuations also support the argument that the Final Rules are not arbitrary and capricious. The Law Professors argue that the practice of allowing unlimited continuations "affect[s] the way examiners approach patent applications," since "[a]n examiner who knows that the applicant can always come back and ask for more may be unwilling to stand by a rejection she believes to have merit, simply because it is easier in the long run to allow a patent than to continue fighting against a determined applicant." The brief also criticizes the use of continuations "to gain advantages over competitors by waiting to see what product the competitor will make, and then drafting patent claims specifically designed to cover that product," and as a way to carry out the strategy of "submarine patenting." While the Law Professors acknowledge that there are "legitimate reasons" to use continuations — "[t]he two most plausible are to correct errors . . . and to obtain a narrow patent quickly while fighting over broader claims in a continuation" — the brief notes that U.S. Patent Law provides a number of mechanisms for correcting errors and that patentees can use to the doctrine of equivalents "to argue for broader protection than the claims provide." With respect to conflicting concerns regarding the use of multiple continuations, the Law Professors assert that:
[T]he PTO has accommodated these conflicting concerns, in fact bending over backwards in its final rulemaking to ensure that applicants have abundant opportunity to use continuations for these legitimate purposes while still trying to impose some limits on abuse of the continuation process. The final rules permit applicants an original application, two continuation applications, an RCE, and an unlimited number of divisionals. Those who have already exhausted all those applications can seek additional continuations; they simply need to come up with a reason why they need a fifth (or more) bite at the apple.
For additional information regarding the appeal, please see:
• "PTO Files Reply Brief in Tafas v. Dudas Appeal," October 15, 2008
• "Dr. Tafas Files Brief in New Rules Appeal," September 30, 2008
• "GSK Files Brief in Tafas v. Dudas Appeal," September 25, 2008
• "Tafas v. Dudas Update," September 2, 2008
• "Public Interest Groups Back USPTO in Tafas v. Dudas Appeal," August 5, 2008
• "USPTO Files Opening Brief in Tafas v. Dudas Appeal," July 22, 2008
• "Save the Date — Initial Scheduling of the Tafas/GSK v. Dudas Appeal," May 21, 2008
• "USPTO to Appeal Tafas/GSK v. Dudas," May 7, 2008
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