By Donald Zuhn —
Earlier today, counsel for Dr. Triantafyllos Tafas filed a petition for a panel rehearing or rehearing en banc of the decision issued by the Federal Circuit in Tafas v. Doll. In that decision, issued on March 20, a split panel determined that Rules 75, 78, 114, and 265 are procedural, but that Rule 78 is inconsistent with 35 U.S.C. § 120 (see Patent Docs report).
Dr. Tafas' request for rehearing or rehearing en banc is based on the grounds that the panel majority:
(1) misapplied significant binding Supreme Court and Federal Circuit precedent concerning the correct standard for classifying administrative rules as "substantive" versus "non-substantive"; (2) failed, contrary to Supreme Court and Federal Circuit precedent, to fully consider evidence that the Final Rules significantly and adversely affect individual rights and obligations under the law; (3) failed to correctly address, as required by Supreme Court precedent, the threshold question of whether the PTO has the jurisdictional authority under 35 U.S.C. § 2(b)(2) to enact the Final Rules; and (4) misapplied Chevron deference to its improper determination that Final Rules 75, 265 and 114 were not "inconsistent with existing law".
With respect to the first two grounds, the petition states that:
Instead of conducting the required analysis of the Final Rules' effect on existing patent law, policy and individual rights and obligations, the majority, relying on out-of-context statements from JEM Broadcasting Co.[] v. Federal Communications Commission, 22 F.3d 320 (D.C. Cir. 1994), and a misconstruction of Lamoille Valley Railroad Co. v. Interstate Commerce Commission, 711 F.2d 295 (D.C. Cir. 1983), simply asserted that the RCE, ESD and 5/25 rules are "procedural" on the ground that while each may "alter the manner in which the parties present their viewpoints to the USPTO," each "do[es] not, on [its] face, foreclose effective opportunity to present patent applications for examination" or "effectively foreclose[] [applicants] from obtaining the patent rights to which they are entitled." Tafas, 559 F.3d at 1356. With these statements, the majority opinion created a new standard at odds with existing Federal Circuit precedents. This standard suggests that a PTO rule with any procedural aspect cannot be struck down as "substantive" unless it eviscerates applicants' ability to successfully prosecute patent applications or utterly forecloses applicants' ability to obtain the patent rights to which they are entitled.
On the third ground, the petition argues that "the majority inappropriately equated a 'consistency with the law' analysis [under 35 U.S.C. § 2(b)(2)] with an analysis of whether certain select patent statutes relied upon by the District Court are ambiguous so as to allow agency discretion in their interpretation." Section 2(b)(2) of Title 35 specifies that the Patent Office "may establish regulations, not inconsistent with law" that "govern the conduct of proceedings in the Office" and "facilitate and expedite the processing of patent applications." Thus, the petition contends that:
[A]s part of its "Chevron Step Zero" analysis, the Court was required to consider whether or not the Final Rules were consistent with law and, therefore, within the PTO's jurisdiction. This analysis should have been done before granting Chevron deference to the PTO's interpretation of the Patent Act, not after, as in the majority opinion.
Finally, with respect to its fourth ground, the petition argues that the majority incorrectly concluded that Final Rules 75, 265 and 114 were not inconsistent with applicable law. For example, according to the petition:
Final Rule 75(b)(1) grants the PTO the right to withhold a patent on allowed claims in certain circumstances. Where no ESD was filed before the first Office Action on the merits, but six or more claims depending on a single independent claim are allowed by the Examiner if the applicant agrees to cancel the independent claim and rewrite each of the dependent claims in independent form, the applicant cannot receive patent protection on at least one of the allowed embodiments under Final Rule 75. This is contrary to 35 U.S.C. § 131.
Section 131 states that "[t]he Director shall cause an examination to be made of the application and the alleged new invention; and if on such examination it appears that the applicant is entitled to a patent under the law, the Director shall issue a patent therefor." The petition also contends that Final Rule 75 is inconsistent with 35 U.S.C. § 112, Final Rule 265 is inconsistent with 35 U.S.C. § 102, and Final Rule 114 is inconsistent with 35 U.S.C. § 132.
Patent Docs thanks James Nealon of Kelley Drye & Warren LLP for kindly providing us with a copy of Dr. Tafas' Combined Petition for Panel Rehearing and Rehearing En Banc.
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