Well, oral arguments were held yesterday at the U.S. Court of Appeals for the Federal Circuit to hear the matter of the Tafas v. Dudas and the US Patent Office, an appeal of the claims and continuations rules promulgated by the USPTO which were preliminarily enjoined and ultimately permanently enjoined by the District Court effect (Final Rules; 72 Federal Register 161 at 46716).  See Tafas v. Dudas and the United States Patent and Trademark Office.

The court heard oral arguments from the GlaxoSmithKline representative, Attorney John M. Desmarais and the representative of the USPTO, James Toupin, who is also the General Counsel for the USPTO.  You can hear the complete oral arguments yourself here: http://oralarguments.cafc.uscourts.gov/mp3/2008-1352.mp3

One critical piece here is whether Congress provided the USPTO the rule making authority explicitly for the purpose of expediting patent applications.  Judge Rader asked whether the real issue in this case is whether the PTO is entitled to Chevron deference and whether the rules were procedural or substantive.

 That is, the rules of statutory construction dictate that “the agency’s interpretation as long as it is based on a permissible construction of the statute’” would control the case.  Chevron U.S.A. v. Natural Resources Def. Council, 467 U.S. 837, 843 (1984). However, “not all statutory interpretations by agencies qualify for the level of deference afforded by that step.” United States v. Mead Corp., 533  U.S. 218, 227-31 (2001)(deference to the agency’s interpretation is appropriate only where Congress has  ‘delegated authority to the agency generally to make rules carrying the force of law, and … the agency interpretation claiming deference was promulgated in the  exercise of that authority’”).

If the Patent Office were entitled to deference under the Supreme Court’s decision in Chevron, the Patent Office rules would most likely be allowed.  The Court will need to determine whether the Patent Office acted within the authority given by Congress.

Gene Quinn of IPWatchdog attended the hearing and offered this insight:

Judge Rader also was interested in the text of 35 USC 112, which requires that the specification of an application “shall conclude with one or more claims.”  Judge Rader simply asked “how many is ‘or more’?”  To which the gallery erupted in laughter for the first time.  In my experience when the judges are being comedians and the gallery is laughing without any scolding from the bench it is not a good thing for whoever is standing at the podium, and repeatedly that person was Attorney Toupin.

We think the Patent Office may have an uphill battle with this panel.  You could almost sense a collective chuckle when Mr. Toupin explained that the proposed rules would not act retroactively since applicants of any currently pending applications would be given an opportunity to comply with the new rules by merely filing an Examination Support Document (ESD) for patent applications containing 5 or more independent claims, or 25 or more total claims.

From Hal Wegner’s account:

The [PTO] General Counsel was asked whether – if he were counsel to a pharmaceutical client – he could recommend the ESD: He answered unequivocally in the affirmative. To this answer, and accompanied by laughter from the packed courtroom, the presiding judge advised the General Counsel to seek employment in the electronics or other industries.  [Ouch!]

We’ll keep you posted on updates as they happen.  If you want to see the firestorm of comments already generated by these arguments, see the comments at Dennis Crouch’s Patently-O (what Hal Wegner has dubbed the Crouch Army).  More commentary at Peter Zura’s 271 Patent Blog and Intellectual Property Watch.

More here:
Briefs Flying In Patent Office Appeal of Continuation Rules
Is the USPTO Trying to Put Itself In A Better Light On Appeal?
Tafas v. Dudas: The Continuation Wars

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