01 Nov GlaxoSmithKline prevails: Patent rule changes temporarily enjoined
On Aug. 21, 2007, the United States Patent and Trademark Office issued final administrative rule changes affecting the patent application process, which were set to take effect on Nov. 1, 2007.
Yesterday, one day before the rules changes were to take effect, an Eastern District of Virginia Federal Court judge ruled to preliminarily enjoin the USPTO from implementing these changes.
Rule changes
The proposed rule changes would have limited the number of claims permitted within each patent application as well as capped the total number of related patent applications that can be filed. The USPTO referred to this as the “5/25” rule, allowing five independent claims and 25 total claims in each application.
As the rules currently stand, a patent applicant can file as many claims as the applicant is willing to pay for within each patent application. The USPTO charges a significant fee for every claim in excess of 20, which has the natural effect of limiting the total number of claims. However, complexities in technology and a company’s patent strategy may require a significantly larger number of claims to adequately protect an invention. A patent applicant’s right to adequately protect an invention may have been hindered by the 5/25 rule.
An original patent application is often referred to as a “Parent” if there are additional patent applications (“Child” or “Continuation”) filed after and claiming priority to the parent application. Child patent applications are often filed to affect a defined patent strategy and protect an invention through broad and varied claim coverage.
The proposed rule changes set a limit of two continuations and one request for continuing examination (RCE) for an existing patent application. Under the current rules, the filing fees for each child application and RCE is essentially the same as a new patent application. Therefore, the filing of continuation applications is cost prohibitive unless driven by a defined patent strategy.
The proposed rule changes include a significant number of complexities and changes that have not been addressed. The proposed rules changes can be viewed at: FINAL RULES CHANGES
GSK vs. USPTO
Glaxo Smith Kline filed a lawsuit on Tuesday, Oct. 9, 2007, in the United Stated Federal District Court for the Eastern District of Virginia, seeking to temporarily enjoin implementation of the USPTO rules changes based upon its nearly 2,000 currently pending patent applications.
Among other causes of action, GSK alleged the USPTO lacks the authority to issue substantive final rules concerning continuation applications, that the final rules are beyond the USPTO’s power since they retroactively change the legal effect of continuations that have already been filed, and that the USPTO lacks the authority to restrict the number of claims that can be presented in a patent application.
GSK’s complaint (see paragraph 34) very simply and accurately describes an inventor’s right to obtain a patent. “An inventor has a statutory entitlement to a patent unless the invention that is the subject of the application for the patent is not new or obvious (35 U.S.C. 102-103). To obtain a patent, an inventor must file a written application that contains a specification, an oath and “one or more” claims.” (35 U.S.C. 111-112)
The USPTO claims that the changes enhance “administrative efficiency” and they “govern the conduct of proceedings in the [USPTO]” and “do not affect the truly substantive rights of the patent applicant.” Surprisingly and inaccurately, the patent office asserted that the “filing of an initial application does not create any rights.” By the USPTO’s own admission, the changes would only reduce the backlog of patent applications by 2.7 percent and would not reduce the backlog to a reasonable level.
The court found that based upon “the likelihood of GSK’s success on the merits, the possibility of irreparable harm to GSK if the injunction is not granted, the balance of hardships between the parties, and the public interest,” the USPTO should be temporarily enjoined from implementing the proposed rules changes.
Victory for innovators
Although the injunction is only temporary, it is widely believed to be a victory for innovators and U.S. companies competing in the global marketplace. The proposed rules would significantly constrain the ability to obtain substantive patent protection. Since continuations and claims are limited unless you file a costly examination support document, the proposed rules could lower the value of patent portfolios, make it easier for infringers to encroach upon patented technologies, and make it easier to challenge patents. The submission of an ESD would significantly undermine a patent holder’s ability to enforce the claims against an infringer, as it is statement by the patent holder that would be used by an infringer to limit the scope of the claims.
Now what?
Since the Eastern District of Virginia is a “Rocket Docket,” similar to the Western District of Wisconsin, the case will likely proceed to a quick trial and the possibility of a permanent injunction or denial of any injunction within the next year. Until then, the status quo remains. However, the USPTO has proposed additional rules changes affecting the submission of related prior art and the limitation of certain types of claims in all patent applications. One thing is certain, the laws and regulations governing U.S. patents will continue to undergo significant changes.
Other articles by Jonathan Fritz
• Jeffrey McIntyre and Jonathan Fritz: Patent applicants beware of KSR’s impact on patent prosecution
• Joe Goode and Jonathan Fritz: eBay decision changes balance of power in patent disputes
• Court bars patent protection for certain gene fragments
• Jonathan Fritz: Describe your invention, or your biotech patent may be worthless
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