Tafas v. Doll

• Decision Date: 20 March 2009
• Docket Number: No. 2008-1352.,2008-1352.
• Citation: 559 F.3d 1345
• Parties: Triantafyllos TAFAS, Plaintiff-Appellee, and Smithkline Beecham Corporation (doing business as GlaxoSmithKline), Smithkline Beecham PLC, and Glaxo Group Limited (doing business as GlaxoSmithKline), Plaintiffs-Appellees, v. John J. DOLL, Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the United States Patent and Trademark Office, and United States Patent and Trademark Office, Defendants-Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

559 F.3d 1345

Triantafyllos TAFAS, Plaintiff-Appellee, and Smithkline Beecham Corporation (doing business as GlaxoSmithKline), Smithkline Beecham PLC, and Glaxo Group Limited (doing business as GlaxoSmithKline), Plaintiffs-Appellees, v. John J. DOLL, Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the United States Patent and Trademark Office, and United States Patent and Trademark Office, Defendants-Appellants.

No. 2008-1352.

United States Court of Appeals, Federal Circuit.

March 20, 2009.

Steven J. Moore, Kelley Drye & Warren LLP, of Stamford, CT, argued for plaintiff-appellee Triantafyllos Tafas. With him on the brief was James E. Nealon.

John M. Desmarais, Kirkland & Ellis LLP, of New York, NY, argued for plaintiffs-appellees SmithKline Beecham Corporation (doing business as GlaxoSmithKline), et al. With him on the brief were F. Christopher Mizzo, Jeffrey Bossert Clark, D. Sean Trainor, and Scott M. Abeles, of Washington, DC; and Peter J. Armenio, of New York, NY. Of counsel on the brief was Sherry M. Knowles, GlaxoSmithKline, of King of Prussia, PA. Of counsel was William Bestani, Kirkland & Ellis LLP, of Washington, DC.

James A. Toupin, General Counsel, Office of the Solicitors, United States Patent and Trademark Office, of Arlington, VA, argued for defendants-appellants. With him on the brief were Janet A. Gongola, William G. Jenks, Nathan K. Kelley, William LaMarca, and Jennifer M. McDowell, Associate Solicitors. Also on the brief were Carl J. Nichols, Acting Assistant Attorney General; Chuck Rosenberg, United States Attorney; and Scott R. McIntosh and Joshua Waldman, Attorneys, Appellate Staff, Civil Division, United States Department of Justice, of Washington, DC. Of counsel was Raymond T. Chen, Acting Solicitor, Office of the Solicitors, United States Patent and Trademark Office, of Arlington, VA.

Daniel B. Ravicher, Public Patent Foundation, of New York, NY, for amici curiae Public Patent Foundation, et al.

Mark A. Lemley, Stanford Law School, of Stanford, CA, for amici curiae Intellectual Property and Administrative Law Professors, et al.

Kevin T. Kramer, Pillsbury Winthrop Shaw Pittman LLP, of Washington, DC, for amicus curiae Elan Pharmaceuticals, Inc. With him on the brief were Vincent J. Napoleon and Stephanie F. Goeller, of Washington, DC; and Scott J. Pivnick, of McLean, VA.

Randolph D. Moss, Wilmer Cutler Pickering Hale and Dorr LLP, of Washington, DC, for amicus curiae Pharmaceutical Research and Manufacturers of America. With him on the brief were David W. Ogden and Brian M. Boynton, of Washington, DC; Donald R. Steinberg, of Boston, MA; and Anne K. Small, of New York, NY.

Colby B. Springer, Carr & Ferrell LLP, of Palo Alto, CA, for amici curiae SonicWall, Inc., et al. With him on the brief was Tam Thanh Pham.

Charles E. Miller, Dickstein Shapiro LLP, of New York, NY, for amicus curiae New York Intellectual Property Law Association. Of counsel on the brief were Anthony Giaccio, New York Intellectual Property Law Association, of New York, NY; Charles A. Weiss, Kenyon & Kenyon LLP, of New York, NY; and Bridgette Y. Ahn, Orrick, Herrington & Sutcliffe LLP, of New York, NY.

John M. Neukom, Susman Godfrey LLP, of Seattle, WA, for amicus curiae Intellectual Ventures, LLC. Of counsel on the brief were Matthew C. Rainey; De Wolf, General Electric Company, of Fairfield, CT, for amicus curiae General Electric Company, and Heath W. Hoglund, Dolby Laboratories, Inc., of San Francisco, CA, for amicus curiae Dolby Laboratories, Inc.

Paul H. Berghoff, McDonnell Boehnen Hulbert & Berghoff LLP, of Chicago, IL, for amicus curiae Intellectual Property Owners Association. With him on the brief was Jeffrey A. Steck. Of counsel on the brief were Steven W. Miller and Robert P. Hayter, Intellectual Property Owners Association, of Washington, DC.

Robert Greene Sterne, of Sterne, Kessler, Goldstein & Fox P.L.L.C., of Washington, DC, for amici curiae Amberwave Systems Corp., et al. With him on the brief were Jon E. Wright and Kenneth C. Bass, III.

Jerry R. Selinger, Morgan, Lewis & Bockius LLP, of Dallas, TX, for amicus curiae American Intellectual Property Law Association.

Ronald A. Schechter, Arnold & Porter LLP, of Washington, DC, for amicus curiae Monsanto Company. With him on the brief were David R. Marsh, Matthew M. Schultz, and Kristan Lynn Lansbery.

Ronald A. Schechter, Arnold & Porter LLP, of Washington, DC, for amicus curiae Biotechnology Industry Organization. With him on the brief were David R. Marsh, Matthew M. Schultz, and Kristan Lynn Lansbery.

R. Carl Moy, William Mitchell College of Law, of St. Paul, MN, for amicus curiae William Mitchell College of Law Intellectual Property Institute. With him on the brief was Jay A. Erstling. Of counsel on the brief was Charles Gorenstein, Birch Stewart Kolasch Birch LLP, of Falls Church, VA.

Before RADER, BRYSON and PROST, Circuit Judges.

Opinion for the court filed by Circuit Judge PROST. Concurring opinion filed by Circuit Judge BRYSON. Opinion concurring in part and dissenting in part filed by Circuit Judge RADER.

PROST, Circuit Judge.

The United States Patent and Trademark Office ("USPTO") appeals the April 1, 2008 decision of the United States District Court for the Eastern District of Virginia granting summary judgment that four recently promulgated rules exceed the scope of the USPTO's rulemaking authority. Because we conclude that the four rules are procedural, but that Rule 78 is inconsistent with 35 U.S.C. § 120, we affirm-in-part, vacate-in-part, and remand.

I. BACKGROUND

In January 2006, the USPTO initiated two related notice and comment rulemaking proceedings. After receiving and considering the public comments, the USPTO issued the new rules on August 21, 2007, with an effective date of November 1, 2007. Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications, 72 Fed.Reg. 46,716 (Aug. 21, 2007). Four of the new rules (collectively, the "Final Rules") are at issue in this appeal.

Two of the new rules, Final Rule 78 and Final Rule 114, pertain to continuation applications and requests for continued examination ("RCEs") and were issued to address the "large and growing backlog of unexamined patent applications." Id. at 46,717. Final Rule 78 governs the availability of continuation and continuation-in-part applications.¹ Under the rule, an applicant is entitled to file two continuation applications as a matter of right. 37 C.F.R. § 1.78(d)(1)(i). If an applicant wishes to pursue more than two continuation applications, he must file a petition "showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application." Id. § 1.78(d)(1)(vi). If the applicant cannot make the requisite showing, the USPTO will accept the application for examination but will "refuse to enter, or will delete if present, any specific reference to a prior-filed application." Id. § 1.78(d)(1). The effect of this is to remove the application from the scope of 35 U.S.C. § 120, which would otherwise entitle the application to the filing date of the prior-filed application. Final Rule 114 provides for similar treatment of RCEs. Under the rule, an applicant is allowed one RCE as a matter of right. Id. § 1.114(f). For each additional RCE, the applicant must file a petition "showing that the amendment, argument, or evidence sought to be entered could not have been submitted prior to the close of prosecution in the application." Id. § 1.114(g). The limitation on RCEs is applied on the basis of application families, rather than individual applications. Id. § 1.114(f).

The two other rules, Final Rule 75 and Final Rule 265, are intended to address the USPTO's difficulty in examining applications that contain a large number of claims. 72 Fed.Reg. at 46,721. Final Rule 75 requires an applicant who submits either more than five independent claims or twenty-five total claims to provide the examiner with information in an examination support document ("ESD"). 37 C.F.R. § 1.75(b)(1). The requirements for ESDs are set forth in Final Rule 265. To comply with Final Rule 265, an applicant must conduct a preexamination prior art search, provide a list of the most relevant references, identify which limitations are disclosed by each reference, explain how each independent claim is patentable over the references, and show where in the specification each limitation is disclosed in accordance with 35 U.S.C. § 112, ¶ 1. Id. § 1.265(a).

Shortly after the Final Rules were published in the Federal Register, Triantafyllos Tafas, SmithKline Beecham Corporation, and Glaxo Group Limited (collectively, "Appellees") filed suit against the USPTO. On October 31, 2007, the district court preliminarily enjoined enforcement of the Final Rules. Tafas v. Dudas, 511 F.Supp.2d 652 (E.D.Va.2007) ("Tafas I"). Appellees then moved for summary judgment that the Final Rules are invalid and sought a permanent injunction against their enforcement. Appellees' summary judgment motions alleged that the Final Rules were impermissibly substantive, inconsistent with law, arbitrary and capricious, incomprehensibly vague, impermissibly retroactive, and procedurally defective.

The district court agreed with Appellees that the Final Rules were "substantive rules that change existing law and alter the rights of applicants such as [Appellees] under the Patent Act." Tafas v. Dudas, 541 F.Supp.2d 805, 814 (E.D.Va.2008) ("Tafas II"). Specifically, the district court found that the Final Rules created limits on continuation applications, RCEs, and claims that were inconsistent with several sections of the Patent Act, as well as precedent from this court and its predecessor, the Court of Customs and Patent Appeals. The district court concluded that because the USPTO lacks substantive...