By Kevin E. Noonan —

It has been quite some time since most in the patent community have given much thought to the ill-advised "claims and continuation" rules promulgated by the Patent and Trademark Office on August 21, 2007 that were preliminarily enjoined on Halloween, 2007 (one day before they were to go into effect) and permanently enjoyed on April Fool's Day, 2008.  But with the Federal Circuit's decision last Friday overturning the bases for enjoining three of the four rules at issue, it is a good time to be reminded of what was (and now once again is) at stake.  A few caveats, however, are in order.

First, the injunction was imposed on summary judgment, so District Court Judge Cacheris has not heard the merits of the parties' arguments.  Second, Judge Cacheris based his ruling on only one of the grounds asserted by Dr. Tafas and GlaxoSmithKline, leaving several others that the Court never ruled upon.  Third, as pointed out on Patent Docs last week, Judge Prost, writing for the fractured majority, set forth a roadmap of issues for the District Court to consider, any one of which could be further grounds for invalidating and enjoining anew the "new rules."  Fourth, the delay in President Obama's appointment of a Commerce Secretary has also delayed the appointment of a new Director for the Patent Office, and there is no indication of who that individual might be or what that person's views on changing any of these rules might be.  Finally, the rules package was an interconnected whole, intended to block any "loopholes" that would permit an applicant (albeit at increased cost) from filing additional claims and continuations.  Thus, even if the Federal Circuit's determination that one of the proposed new rules (Rule 78) is contrary to statute (35 U.S.C. § 120) and thus outside the scope of the Office's rulemaking authority under 35 U.S.C. § 2(b)(2)(A) is the only aspect of the decision that survives the expected impending continued litigation, failure to implement this aspect of the rule might doom the entire endeavor.

The Federal Circuit considered four of the "new rules" in the continuation and claims package:  Rules 75, 78, 114, and 265.  Prior posts in this space have reviewed the metes and bounds of these rules extensively in the past, and this post is meant merely as a refresher; in-depth treatment can be found in those prior posts.

Rule 75(b):

The prior (and still current) version of Rule 75(b) merely requires that claims "differ substantially from each other and are not unduly multiplied."  The proposed changes to Rule 75(b), which increased the rule by 522 words and added 5 new subparts, embodied the limitation to 5 independent claims and 25 total claims in any application (Rule 75(b)(1)), unless the applicant supplied an examination support document (ESD) pursuant to proposed new Rule 265 (see below).  Rule 75(b)(2)(A) defined as an independent claim any claim that referenced another claim but did not incorporate by reference all the limitations of the referenced claim, or that was directed to a different statutory class ("a method of using the subject matter of claim x" would thus not be considered a dependent claim).  Proposed rule 75(b)(3) provided a notice provision to permit an applicant to amend an application to be in compliance with the rule (and thus bypass the need to submit an ESD).

Proposed Rule 75(b)(4) prohibited an applicant from avoiding the strictures of the claims limitations by filing more than one application; the rule provided that the Office would consider together the claims in commonly-owned applications that contained "patentably-indistinct" claims, and would then add together all the claims of the two applications to determine whether the applications were in compliance with the claims limitations.  The intent was explicit in the Final Rule Notice, where the Office stated that Rule 75(b)(4) is intended "to preclude an applicant from submitting multiple applications to the same subject matter (with claims that are patentably indistinct), each with five or fewer independent claims or twenty-five or fewer total claims, for the purpose of avoiding the requirement to submit an examination support document."

Rule 78:

This rule, which the Federal Circuit held was inconsistent with 35 U.S.C. § 120, embodies the limitations on continuation applications, and was even more expressly directed towards preventing applicants from avoiding the effects of the rules package.  It was also the most extensive of the rules, having the following relevant provisions:

Rule 78(d):  there are several subparts to this portion of the proposed rules, but the most important provision precludes an applicant from filing more than two continuation applications in any application family (wherein the definition of an "application family" includes continuation and continuation-in-part applications but excludes divisional applications). 

Rule 78(f) required an applicant prosecuting an application to identify all other commonly-owned applications having (a) a common inventor and (b) a filing or priority date within 2 months of the filing or priority date of the application in question.  This section of the proposed rule also created a rebuttable presumption that such commonly-owned applications sharing a common inventor and "substantial overlapping disclosure" contained at least one patentably-indistinct claim.  The Office under these circumstances could then require that the patentably-indistinct claims be cancelled in all but one of the related applications.

Rule 114:

This proposed rule would permit an applicant to file only a single request for continued examination (RCE) without a petition and showing, and this limitation would apply to an entire application family (i.e., an application and all continuation and continuation-in-part applications claiming priority thereto).  While divisional applications are not part of an application "family" for the purposes of this proposed rule, each such divisional application is also entitled to a single RCE.  This was the "+1" part of the "2+1" rule imposed in combination with proposed Rule 78.  The petition required for filing a second RCE would require a showing that an amendment, argument, or evidence sought to be entered with the RCE could not have been submitted earlier in prosecution.  Importantly, the requirement for a showing would not be satisfied by submitting an IDS containing art not known to anyone with Rule 56 duty prior to 3 months before the RCE is requested (including art identified, inter alia, by a foreign patent office in a counterpart application).

Rule 265:

This proposed rule describes the examination support document (ESD) required when an applicant files more than 5 independent claims and 25 total claims in an application.  The provisions are simple, and in view of the inequitable conduct implications, frightening; an ESD must contain:

• A preexamination search statement;
• Listing of references deemed most closely related to the subject matter of each claim;
• Identification of claim limitations disclosed by each reference;
• Detailed explanation of patentability; and
• Showing of support under 35 U.S.C. § 112, ¶ 1.

The preexamination search statement must contain:

• A statement that a preexamination search in compliance with 37 C.F.R. § 1.265(b) was conducted.
• An identification of:

Unlike current Information Disclosure Statements, an ESD requires that the content of the references be disclosed with particularity, especially with regard to the relevance of each reference to the claimed invention.  "The ESD must include a de
tailed explanation that particularly points out how each of the independent claims is patentable over the references cited in the listing of references," as well as explaining why the claims are novel and non-obvious with regard to the references, as well as evidence of support in the specification in compliance with 35 U.S.C. § 112, ¶ 1.

These are, in brief, the "new rules" given new life by the Federal Circuit's decision.  There is no reason to believe that the current Office administration does not remain committed to them.  Although that administration has indicated that the rules would not be imposed retroactively to pending applications (this was one of the grounds for GSK's opposition to the rules), any failure to impose any version of these "new rules" will do precisely what the Office was trying to avoid:  provoke a deluge of new filings intended to avoid the effects of the rules.  This is what happened immediately before the changes occasioned by implementation of the GATT provisions on June 7, 1995, and before the publication rules of the American Inventor Protection Act (AIPA) on November 28, 2000.  Two years ago we would have assumed that exacerbating the examination backlog was an important Office goal.  Today, in view of falling allowance rates (and maintenance fees) and falling application rates (down 5% in absolute terms and 10% less than Office expectations), these considerations may be less pressing for the Office.  They are no less important, however, for American innovation, especially because the Office has also stopped hiring new examiners due to budget shortfalls.  It would be ironic indeed if the Office eventually imposed some version of these rules in an effort to increase revenues by making worse the problem that provided the ostensible motivation for the rules in the first place.