Tafas v. Dudas

• Court: U.S. District Court — Eastern District of Virginia
• Writing for the Court: James C. Cacheris
• Citation: Tafas v. Dudas, 541 F.Supp.2d 805 (E.D. Va. 2008)
• Decision Date: 01 April 2008
• Docket Number: Civil No. 1:07cv1008 (JCC).,No. 1:07cv846 (JCC).,1:07cv846 (JCC).
• Parties: Triantafyllos TAFAS, Plaintiff, v. Jon W. DUDAS, et al., Defendants. Smithkline Beecham Corporation, et al., Plaintiffs v. Jon W. Dudas, et al., Defendants.

541 F.Supp.2d 805

Triantafyllos TAFAS, Plaintiff, v. Jon W. DUDAS, et al., Defendants.

Smithkline Beecham Corporation, et al., Plaintiffs v. Jon W. Dudas, et al., Defendants.

No. 1:07cv846 (JCC).

Civil No. 1:07cv1008 (JCC).

United States District Court, E.D. Virginia, Alexandria Division.

April 1, 2008.

COPYRIGHT MATERIAL OMITTED

James E. Nealon, Steven J. Moore, Joseph Dale Wilson, III, Joanna Elizabeth Baden-Mayer, Kelley Drye & Warren LLP, Daniel Sean Trainor, Elizabeth Marie Locke, Kirkland & Ellis LLP, Washington, DC, Craig Crandall Reilly, Richard McGettigan Reilly & West PC, Alexandria, VA, for Plaintiffs.

Lauren A. Wetzler, United States Attorney's Office, Alexandria, VA, Defendants.

MEMORANDUM OPINION

JAMES C. CACHERIS, District Judge.

At issue are the United States Patent and Trademark Office's changes to the rules governing the examination of patents. This case presents itself by virtue of cross-motions for summary judgment by Plaintiffs Smithkline Beecham Corporation d/b/a GlaxoSmithKline, et al., Plaintiff Triantafyllos Tafas, and Defendants Jon W. Dudas and the United States Patent and Trademark Office. Defendants also move to strike several exhibits filed by Tafas and certain amici curiae. For the reasons stated below, the Court will grant Plaintiffs' Motions for Summary Judgment, deny Defendants' Motion for Summary Judgment, and deny as moot Defendants' Motion to Strike.¹

I. Background

Plaintiffs Smithkline Beecham Corporation d/b/a GlaxoSmithKline, et al. (collectively "GSK") and Triantafyllos Tafas ("Tafas") bring this lawsuit pursuant to the Administrative Procedure Act (the "APA") to permanently enjoin Defendants Jon W. Dudas and the United States Patent and Trademark Office (collectively, the "USPTO") from enacting the "Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications," 72 Fed. Reg. 46,716-843 (Aug. 21, 2007) (to be codified at 37 C.F.R. pt. 1) (the "Final Rules").² GSK and Tafas claim that the Final Rules, which change the patent system by modifying several long-established rules governing patent examination by the USPTO, are unlawful agency action under Section 706(2) of the APA and should be declared null and void. The USPTO argues that the Final Rules are entirely lawful and that it should be permitted to go forward and implement these much needed changes.

Because this case involves the legality of the Final Rules, a determination of their validity does not turn on facts unique to a particular plaintiff or on any disputes regarding such facts. Thus, it is unnecessary to provide a lengthy factual background specific to the parties. The Court will, however, lay out the existing statutory framework that governs the examination of patents by the USPTO and the manner in which the Final Rules alter the current system.

Patent examination is governed by the Patent Act. See 35 U.S.C. §§ 1 et seq. To obtain patent protection on an invention, an applicant first files a written patent application with the USPTO. Id. § 111. The first application filed for a given invention is a "parent" or "initial" application. A parent application contains two primary parts: a "specification," which describes the invention and how to make and use it, and one or more "claims," which identify the scope of the legal protection that the invention should receive. Id. § 112. A claim may be in either "independent," "dependent," or "multiple dependent" form. Id.

Once the application is filed, a patent examiner determines whether the claimed invention meets certain statutory requirements such as novelty, nonobviousness, and definiteness, among others. See id. §§ 102, 103, 112. If an application fails to meet these demands, the examiner will issue an "Office Action" containing the grounds for rejection. Id. §§ 131, 132(a). Upon receiving an Office Action, an applicant may amend his claims, argue against the rejection, or present evidence showing why the invention is patentable. 37 C.F.R. § 1.111 (2006). The patent examiner must then respond by either allowing some or all of the claims or by issuing another rejection. 35 U.S.C. § 151. This back-and-forth exchange between an applicant and an examiner is commonly referred to as the "prosecution" of an application.

After receiving a final rejection, an applicant may: (1) appeal to the Board of Patent Appeals and Interferences and from there to the United States Court of Appeals for the Federal Circuit; (2) file a "request for continued examination" ("RCE") of the application; or (3) file a "continuation" or "continuation-in-part" application. Id. §§ 120, 132(b), 134, 141, 145; 37 C.F.R. § 1.114 (2006). Continuation and continuation-in-part applications use the same specification as the pending parent application and enjoy the benefit of the filing date of the parent application (the "priority date"), while amending claims or offering further evidence or arguments as to the patentability of the claimed invention. See 35 U.S.C. § 120. Although an applicant may wait until a final rejection to file a continuation or continuation-in-part application, they are not required to do so.

In situations where an applicant claims more than one independent and distinct invention in an initial application, the examiner may impose a "restriction requirement" that forces an applicant to separate their multiple independent inventions into "divisional" applications that claim a single invention. Id. § 121. The applicant must choose one of the inventions to prosecute in their initial application, and can prosecute the remaining inventions in their divisional applications, which also claim the priority date of the parent application. Id.

On January 3, 2006, the USPTO issued two separate notices of proposed rulemaking in the Federal Register: "Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications Containing Patentably Indistinct Claims," 71 Fed.Reg. 48 (Jan. 3, 2006), and "Changes to Practice for the Examination of Claims in Patent Applications," 71 Fed.Reg. 61 (Jan. 3, 2006) (collectively, the "Proposed Rules"). The Proposed Rules delineated changes to the examination process that would limit the number of continuing applications, RCEs, and claims that an applicant could make as a matter of right. The USPTO justified the proposed changes on the ground that the growing number of continuation applications and increasing number and complexity of claims in applications had crippled the USPTO's ability to examine newly-filed applications. See 72 Fed. Reg. at 46716-21. After a four-month public comment period where the USPTO received hundreds of written comments, many of which expressed disapproval of the Proposed Rules, see 72 Fed.Reg. at 46744-830, the USPTO published the Final Rules on August 21, 2007.

Under the old system, an applicant could file an unlimited number of continuation or continuation-in-part applications, RCEs, and claims. The Final Rules modify that system in several ways. First, Final Rules 78 and 114 (collectively, the "2 + 1 Rule") permit an applicant as a matter of right to file two continuation or continuation-in-part applications, plus a single RCE, after an initial application. 72 Fed.Reg. at 46838, 46841; 37 C.F.R. §§ 1.78(d)(1)(i)(iii), 1.114(f). If the applicant wants to engage in further prosecution, a third continuation or continuation-in-part application or a second RCE can be filed with a "petition and showing" that explains why the amendment, argument, or evidence could not have been presented previously. 72 Fed.Reg. at 46839, 46841; 37 C.F.R. §§ 1.78(d)(1)(vi), 1.114(g). In extraordinary situations, if an applicant believes that the petition and showing requirement would work an injustice, it may petition for a waiver of the rule. 37 C.F.R. § 1.183 (2006). The 2 + 1 Rule also applies retroactively to patent applications already filed before the effective date of the Final Rules. See 72 Fed.Reg. at 46716-17.

Second, Final Rule 75 (the "5/25 Rule") permits an applicant to present a total of five independent claims or twenty-five total claims for examination without providing any further information about those claims. 72 Fed.Reg. at 46836; 37 C.F.R. § 1.75(b)(1). An applicant who wants to exceed either limitation must provide an "examination support document" ("ESD") containing information about the claims that may assist the examiner in determining the patentability of the claimed invention. 72 Fed.Reg. at 46836; 37 C.F.R. § 1.75(b)(1). Final Rule 265, as well as certain supplemental guidance issued by the USPTO, establishes the requirements for an ESD. See 72 Fed.Reg. at 46842-43; 37 C.F.R. § 1.265. In addition, both the 5/25 Rule and the ESD requirement apply retroactively to pending applications for which a first Office Action on the merits was not mailed before the effective date of the Final Rules. See 72 Fed.Reg. at 46716.

Final Rules 75 and 78 also alter the existing examination process in other ways. Final Rule 75 defines how claims referring to different statutory classes of invention will be treated and how multiple dependent claims will be counted for purposes of the 5/25 Rule. 72 Fed.Reg. at 46836-37; 37 C.F.R. §§ 1.75(b)(2) & (b)(5)(c). Final Rule 78 defines the terms "divisional," "continuation," and "continuing application" to eliminate any confusion over how the 2 + 1 Rule applies, and clarifies that a "voluntary divisional" application does not exist under Section 121 of the Patent Act and that a continuation-in-part application cannot be filed off of a divisional. 72 Fed.Reg. at 46837-38; 37 C.F.R. §§ 1.78(a) & (d). Finally, Final Rule 78 requires patent applicants to identify related patent applications and sets forth a rebuttable presumption that applications meeting certain conditions contain patentably indistinct claims, thereby preventing applicants from...