Friday, April 04, 2008

Patent reform 2008 unlikely to grant USPTO substantive rulemaking authority

William New (Dugie Standeford) at Intellectual Property Watch notes:

The current version of S 1145 does not contain language granting the USPTO rulemaking authority for continuation and other rules, but the text of the House-passed HR 1908 does, said Banner & Witcoff attorney Allen Hoover. Whether Leahy’s compromise package will include the House provisions is anyone’s guess, he said.

What the USPTO wants is “very unpopular” with all but a few companies embroiled in patent litigation, Hoover said. Any Senate measure specifically authorising the USPTO to adopt such rules is likely to fail, he said.

Furthermore, the likelihood of having substantive rulemaking authority in any compromise is NOT high. The IPW article

“I doubt that S 1145 will include substantive rulemaking, said Stephen Kunin, Oblon, Spivak partner and patent attorney, and former USPTO Deputy Commissioner for Patent Examination Policy. It could, however, allow the agency to promulgate applicant quality submission (AQS) rules permitting it to require applicants to conduct prior art searches and submit search results, he said.

IPBiz notes that especially in an election year, politicians "follow the money," and they will avoid offending constituencies that
matter to them. The basic argument of labor unions that "patent reform" correlates with "U.S. job loss" is something some politicians do not want to deal with. See IPBiz post
Patent reform politics: who donates most to the Democrats?

Furthermore, in a simple model linking "rulemaking authority" to "restrictions on number of continuations and claims," one notes the irony that many of the IT companies (whose real beef is about litigation and damages) are absolutely the biggest
offenders in burdening the USPTO with trivial patent applications. The allusion of Director Dudas in his Hollywood speech to
the IBM toilet queue patent (without actually mentioning IBM by name) signals that the USPTO is not unmindful of "who is to blame" for the plethora of marginal, incrementalist patent applications. The problem with his proposed (Hollywood) resolution
is that it would burden the biggest offenders the least.

See post at xconomy.

The addo vere blog had a comment which included:

As a small inventor I might concur that our patent system is in need of some reform, but I am very concerned that the bill in its present form picks winners and losers among industries with different business models in a way that has never before been attempted in patent law or practice.

IPBiz notes: remember Donald Chisum's law review article in 2005 about neutral principles?


Blogger Keeley Vega said...

Note that H.R. 1908 does not necessarily “grant [new] rulemaking authority for continuations and other rules.” Part (b) of section 14 of the bill states that the language about continuations is a clarification of the power that the PTO already has. That is, procedural rulemaking authority.

If this is true, the PTO already has the authority to specify “circumstances under which an application for patent may claim the benefit under sections 120, 121, and 365(c) of the filing date of a prior filed application for patent.” Since it can’t be a grant of substantive rulemaking, the “circumstances” must be limited to procedural requirements in that they govern the conduct of proceedings in the Office.

It’s not clear, though, that this language wouldn’t affect the recent Tafas v. Dudas decision. If it really is a clarification, it should not. The same standard would be applied and the 2+1 Final Rule would be found to create circumstances that directly affect the rights and obligations of the parties and therefore exceed the PTO’s authority.

Interestingly, while testifying last June, Dudas said: “The USPTO has long believed that rulemaking authority is beneficial to the patent system, and welcomes authority that is necessary to promulgate regulations to ensure an efficient and quality-based patent examination process. We have concerns about unbounded discretion, and therefore want to be certain that any grant is not overbroad.”

9:43 PM  

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