Friday, February 08, 2008

No ruling in Tafas v. Dudas on Feb. 8

The PLI website noted:

According to John White, Judge Cacheris said that "there is a lot of paper to consider" and that he would render his decision as soon as possible, schedule permitting.


Bob Spar was also in the courtroom along side John White and Bob agrees with John that the main issue seems to be whether the PTO has substantive rulemaking authority. Bob said that GSK argued that if the court finds the rules to be substantive then they are void and no deference should be given to the Office. GSK did apparently acknowledge, however, that Chevron deference would be appropriate if the rules are procedural.

IPBiz notes that in Chevron v. NRDC, 467 US 837, the issue was: what standard of review should be applied by a court to a government agency's own reading of a statute that gives that agency its authority to act.

As one would learn from Cass Sunstein at the University of Chicago School of Law (or from Wikipedia), the Chevron case gave rise to the "Chevron two-step":

(1) Whether the statute is ambiguous or there is a gap that Congress intended the agency to fill. If the intent of Congress is clear, that is the end of the matter.

(2) If the statute is ambiguous, whether the agency's interpretation of a statute is reasonable or permissible. If an agency's interpretation is reasonable, then the court will defer to the agency's reading of the statute.

One certainly can believe that Congress, in 35 USC 120, expressed no limitation on the number of continuing applications. There being no limit expressed, one also can easily believe that there is no gap that Congress intended the USPTO to fill. That would be the end of the case (at the first Chevron step), and the USPTO loses.

The issue of substantive rulemaking authority has come up in ADA/ADEA cases. It's simply unclear how one can assert a grant of substantive rulemaking for the USPTO.

See also:

administrative law outline

See also text by LBE.

Of the matter of substantive rule-making authority, patentbaristas had brought up the case of Animal Legal Defense Fund v. Quigg, (932 F.2d 920 (Fed. Cir. 1991)) which notes:

Courts interpreting section 553 generally speak in terms of “substantive” or “legislative” rules requiring notice and comment in contrast to the exempt “interpretative” rules of section 553(b) which do not. []A rule is “substantive” when it “effects a change in existing law or policy” which “affects individual rights and obligations.” see also Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979) (”affecting individuals’ existing rights and obligations”); Gosman, 573 F.2d at 39 (change existing law or policy). To be “substantive”, a rule must also be promulgated pursuant “‘to statutory authority . . . and implement the statute.’” Cubanski v. Heckler, 781 F.2d at 1426; see also Chrysler Corp., 441 U.S. at 302-03. In contrast, a rule which merely clarifies or explains existing law or regulations is “interpretative.” See American Hosp. Ass’n, 834 F.2d at 1045.

The Fire of Genius blog had written of arguments against the USPTO rules on continuing applications:

(2) The regulatory / Patent Office power arguments aren’t as silly, but they’re close. In my view, here’s what anyone who wants to knock out the new regulations on the ground that they’re beyond the Patent Office’s longstanding, sweeping power to “establish regulations, not inconsistent with law, which shall govern the conduct of proceedings in the Office,” 35 U.S.C. section 2(b)(2)(A), needs to be able to explain: As a matter of regulatory power, how are the continuation rules any different from, e.g., the rule that the application be presented in English (37 C.F.R. section 1.52(b)(1)(ii))? Or, for that matter, that it be presented on a particular type of paper (37 C.F.R. section 1.52(a)(1))? And it’s not enough to shout, as the complainers typically do, that section 120 provides for continuation applications. A continuation application filed in Finnish, or in white print on black paper, won’t be accepted. Why should the third, or fourth, or fifth continuation application be accepted, without any explanation from the applicant about why the claim amendments and/or supporting arguments couldn’t have been presented earlier? How are the new rules different, given that — like the rule requiring an English-language disclosure — these rules are reasonably (if not perfectly) designed to help the Patent Office do its job of evaluating whether a given claim passes muster under the Act (including the written description requirement of section 112!)? Unless someone has a cogent answer to this question (and I haven’t heard one yet), the Patent Office rules strike me as an eminently reasonable, lawful exercise of the Office’s regulatory power to create an effective examination process at the Office.

IPBiz finds the Fire of Genius arguments silly.

First, limiting the NUMBER of continuing applications “effects a change in existing law or policy” which “affects individual rights and obligations” in a way far different from limiting applications filed in Finnish. Second, in terms of an underlying rationale, as a fraction of ALL applications, "third, fourth, and fifth continuation applications" are miniscule in number and limiting them would have no significant impact on the application backlog problem OR help the Patent Office do its job of evaluating whether a given claim passes muster. IPBiz predicts the Fire of Genius arguments will not fly with Judge Cacheris (or with the CAFC).


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