The District Court has voided the Final Rules that the USPTO had attempted to put into force on November 1, 2007, and that had been subject to a temporary restraining order entered on October 31, 2007, by making the injunction permanent. The Court's reasoning followed the most cogent point made by the Plaintiffs Tafas and GlaxoSmithKline plc.—the USPTO has overstepped its rule-making authority and the Final Rules cannot be implemented without a change in the US patent law by the US Congress. The district court defined a "substantive rule" as any rule that "affect[s] individual rights and obligations;" and at least the prohibition in the now-void rules of more than two continuations and one Request for Continued Examination as well as the limitation placed on the number of claims were found to be substantive changes. The court did not address any other grounds or issues raised in the litigation, relying on the substantive point only for its decision.
The Injunction Order is broad in its reach: "Defendants Jon W. Dudas and the United States Patent and Trademark Office and their agents, servants, and employees are permanently enjoined from implementing the Final Rules." In the opinion explaining the Order rendered on April 1, 2008, formally a ruling on the Plaintiffs' Motion for Summary Judgment, U.S. District Court Judge Plato Cacheris stated: "Because the USPTO's rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because the Final Rules are substantive in nature, the Court finds that the Final Rules are void as ‘otherwise not in accordance with law' and ‘in excess of statutory jurisdiction [and] authority.' 5 U.S.C. § 706(2)."
The Patent Office has two ways to overcome the Injunction Order, and it is considering each of them. The first is the judicial route, and General Counsel for the USPTO James Toupin announced that the USPTO is considering an appeal to the Court of Appeals for the Federal Circuit (CAFC), hoping to at least partially overturn the broad injunction. Such an appeal, even if treated as an expedited matter, cannot be heard by the CAFC before the November election and more than likely the CAFC cannot decide the appeal sooner than a year from now, when a new administration will have taken over the reins of the USPTO. A second, legislative, avenue is the patent reform bill now pending in the US Congress, in which the USPTO may seek inclusion of a provision granting the substantive rulemaking authority denied it by the district court. That bill is considered by some Washington insiders as not likely to be put to a vote before the full Congress in this session, and substantive patent reform will most likely have to wait for a new administration that will want to influence the USPTO position in a new direction.
Vol. 53, June 2010