BUSINESS NEWS
On October 31, the U.S. District Court of Eastern Virginia issued a preliminary injunction preventing the U.S. Patent and Trademark Office (PTO) from implementing its new rules on the patent-application process, which were scheduled to go into effect November 1.
The motion for injunction was filed by GlaxoSmithKline (GSK; Greenford, Middlesex, UK), which is suing PTO over the issue. GlaxoSmithKline claims that promulgation of the rules exceeds PTO's authority and violates U.S. patent laws. The American Intellectual Property Law Association supports the position.
The main provisions of the new rules would limit patent applicants to two continuing patent applications and one request for continued examination without the applicant demonstrating that additional applications are needed. Applicants would also be limited to 25 claims per application, of which no more than five could be independent claims, unless they could show why additional claims are required.
Under existing rules, patent applicants can file a long series of continuation applications, all claiming priority back to the filing date of an original application. This practice provides medtech manufacturers with time to develop claims and new descriptions to fully cover inventive devices. Further, as competitors bring new products to market years after the original filing, patent applicants can tailor their continuation applications and claims to cover the competing products. The new rules would limit this practice.
"The injunction will stay in place at least until the court can rule on a summary judgment motion that, if granted, would block some or all of the rule changes permanently," says Doug Limbach, an attorney with Shay Glenn LLP (San Mateo, CA). "That decision is not expected until some time early next year. The court's decision might be appealed by PTO. We do not yet have any idea how long implementation of the rules will be blocked or whether they will ever be implemented at all in their current form."
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Rawlins
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Earlier in October, PTO issued a memo clarifying the new rules—a move that may ultimately hurt its case. "When GlaxoSmithKline argued that the new rules should not be implemented because they are unconstitutionally vague, it contended that by issuing additional guidance documents, PTO essentially admitted that the new rules are too vague," says Andrew Rawlins, a partner with Foley & Lardner LLP (Washington, DC). "The district court considered this factor as part of its decision that GlaxoSmithKline was likely to succeed on its argument that the rules are unconstitutionally vague. Though not addressed in the district court's opinion, these guidance documents, to the extent that they introduce changes to the rules that were published and commented upon, also raise questions about whether PTO followed proper procedure."
Rawlins also notes that it is unusual for a court to enjoin the implementation of rules issued by a federal agency. Thus, the judge's injunction may foreshadow a final ruling against PTO.
Currently, PTO is allowed to issue procedural rules, not substantive rules—a power reserved to Congress. "If GSK ultimately prevails on this argument, PTO should not be able to reissue substantive rule changes," Rawlins says. "Congress might decide to do so, but congressional lawmaking often takes much longer than PTO action."
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Rawlins
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However, the issue has already received some congressional attention. "There is indeed a section in the House patent reform bill that would retroactively authorize part of the new rules," says Michael Siekman, a shareholder with Wolf, Greenfield & Sacks PC (Boston). "Identical patent reform bills were introduced in the House and Senate in the spring. Both had a section giving PTO the authority to make substantive rules in general."
Siekman says both bills were altered in committee late this past summer. The Senate bill dropped the substantive rule-making authority provision altogether. The House bill dropped the general substantive rule-making authority provision in favor of one specifically giving PTO the authority to limit continuation applications, subject to congressional review. This bill passed the House in September.
"For now, medtech manufacturers should not continue full-scale preparation for the implementation of the new rules, but instead should return to the same state of readiness as earlier this fall," Rawlins says. "They should ensure that they will be able to efficiently comply with the new rules if they are implemented under a tight schedule—though such a scenario is unlikely. It would be prudent for medtech manufacturers to keep the new rules in mind when preparing new patent applications, but they should not unduly limit or restrict their potential rights."
Limbach says that medtech companies need to keep in close contact with their patent attorneys. "Patent strategies are now changing on a daily rather than weekly basis, and vary depending on each company's situation," he says.
