On Monday, July 6, 2009, the United States Court of Appeals for the Federal Circuit (CAFC), the sole appellate-level court having jurisdiction over patent appeals in the U.S., granted an en banc rehearing to the parties and has vacated a March 20 decision of a CAFC panel comprising Judges Rader, Bryson and Prost in Tafas and GlaxoSmithKline v. Doll (Commissioner for Patents). The earlier CAFC decision had provided mixed guidance as regards the challenge to the rule changes restricting claims and continuations practice before USPTO which met with wide disapproval of the patent community. In accordance with its procedures, the CAFC had vacated the original decision in order to rehear and possibly overturn or modify that decision by a rehearing before the whole court. The date for oral arguments before the full Federal Circuit court is set for October 7, 2009.
The CAFC panel had crafted a compromise resolution to the issue of whether the USPTO had the power to "enact" by regulatory fiat rules that change substantive rights of prospective applicants as well as those whose applications are already on file with the USPTO. That is, the original decision provided a mixed ruling that could have significantly changed the way most practitioners practice and prosecute patent applications before the USPTO. The prior CAFC decision had remanded the case to the lower District Court for a determination of whether the rules were to be applied retroactively.
From comments posted on blogs and other media, most patent practitioners consider the rule changes as more properly being within the province of the legislative branch, as was held by the District Court below with respect to at least some of the rule changes.
At rehearing, all of the judges of the CAFC, sitting as a single judicial body, will hear the case and decide it anew based on the briefs already submitted by the parties and numerous amici curiae, as well as on limited additional briefs. Appellant's (USPTO) additional brief is due within 30 days (August 5), followed by a 20-day period within which the Appellees (Tafas and GSK) may file a subsequent brief (August 25), followed by a 7-day period within which the Appellant may file a reply (September 1). Additional briefs are limited to 7,000 words and any reply brief is limited to 3,500 words. In a late breaking development, both the USPTO and Appellants have consented to postponement of the briefing schedule until 60 days after the new Undersecretary of Commerce for Patients and Trademarks (David Kappos) is confirmed by the US Senate. This delay is sought to permit the new head of the USPTO a period of time in which to review and perhaps withdraw the new USPTO rules, which are the subject of the litigation.
The issues that the CAFC will decide include the validity of the onerous rule changes that were announced in January 2006, implemented in November 2007, and stayed before they took effect by the lower court pending litigation. The lower court struck down the more egregious rules, but made a determination that some of the proposed rule changes be permitted to take effect as being within the purview of the USPTO regulatory authority. The original CAFC three-judge panel made its own determination, which is now open to further review by the full court.
Several points need be made about the proposed rules. First, the CAFC decision to grant en banc review is considered by some as indicative that the CAFC may overturn all the rules, simply because the court would not have granted the review if only to affirm the three-judge-panel decision. Second, even the en banc decision is open to further review by the US Supreme Court. Finally, even if the USPTO were to prevail on all counts, there is some question whether the USPTO will implement these—or any—rules changes, in view of the pending appointment of a new USPTO head.
The advancement of the arts and sciences is a major concern of the new administration and any decision of the CAFC may be mooted by the new management at the USPTO reexamining the backlog and perceived patent quality problems. Any proposed solutions must formulate a new strategy with the possible cooperation of the broader patent community. The indications are trending toward the new rules not being implemented, and the previous experience of Mr. Kappos as head of the IBM Patent Department should provide some measure of clear thinking about the USPTO's dual concerns, i.e., the severe backlog and the need for more quality patents to be issued by the USPTO.
Vol. 53, June 2010