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January 28, 2008

Fighting Criminal Action

Last week, Triantafyllos Tafas filed an opposition brief to the USPTO's summary judgment motion in the matter of stopping implementation of the agency's proposed rules limiting patent filings and examination. Tafas backed with evidence alleged lies and cover-up by PTO management in its totalitarian approach to rulemaking.

The agency asserted its bases for decision as undisputed facts. Tafas disputed that.

In particular, Tafas notes no factual support in the USPTO’s administrative record for the entire purported raison d’etre of the Final Rules – the USPTO’s assertion that such rules are necessary to ameliorate the USPTO’s backlog.

Rather, Tafas notes that applications with more than 25 claims, and continuation applications filed pursuant to 35 U.S.C. § 120, carry substantial extra filing fees, at a level that the USPTO itself requested from Congress.3 Therefore, any resources absorbed may not logically be asserted to be “inordinate,” as they are already bought and paid for by patent applicants. For RCE continuations, the USPTO has both the authority and obligation to set fee levels at a cost-recovery level. The only evidence in the record on this point is that continuation and multi-claim applications tend to keep the PTO financially afloat, because of the larger fees paid relative to a relatively small amount of examining effort. This issue and incongruity was raised in a number of public comment letters. In response, the USPTO stated “revenue” was outside the agency’s “view” in the rulemaking (see 72 Fed. Reg. 46757, Comment 39). Thus, the USPTO admitted that it had not and would not develop any contrary evidence that would have undercut the rationale for the Final Rules by demonstrating that there were ample financial resources available to the USPTO for the express purpose of adequately dealing with an extra “burden” imposed on the office by continuation or multiple claim filings.

Tafas analogized to spotlight the emperor without clothes in attempting to limit filings.

In short, the USPTO is saying that it intends to reduce its backlog by restricting and/or denying patent applicants the ability to make filings (e.g., continuations and multiple claims) expressly contemplated by various provisions of the Patent Act. It is only a small exaggeration to say the USPTO’s approach would be akin to the manager of an amusement park seeking to reduce lines for rides by not admitting anyone to the park. Only applying the most extreme bootleg logic could such an approach be characterized as reasonably calculated at “expediting” or “facilitating” a reduction in amusement park lines. The same is true here.

Tafas outlined gross mismanagement in resource allocation -

One of the reasons Tafas believes that the USPTO fought Tafas’ efforts to take limited discovery with such ferocity is that there are so many alternative explanations for any “hindrance of the Office’s ability to examine” that better fit the facts than those posited by the USPTO. The USPTO’s irrational allocation of examination resources (which was discussed in several of the comment letters, for example in Polestar Ex. 9.2, Docket No. 174-3, P000287-292 and has long been an issue raised by the Examiners’ Union) and the USPTO’s poorly-chosen and poorly-implemented efforts at automation are prime examples of reasons the USPTO has failed to deal effectively with its “backlog.” As concerns automation, both the patent community and the Examiners’ Union told the USPTO’s management that certain tasks are better done on paper than by computer (Exhibit 3 of Polestar amici brief). Nonetheless, the USPTO’s management didn’t listen, and took the USPTO’s paper search resources away from examiners in 2003 and 2004.

Propaganda 101 teaches to repeat a lie so as to make it, by sheer repetition, appear as truth. Tafas caught Dudas' cunning as a propagandist.

The USPTO has continually argued that continuation applications are inappropriately adding to its backlog as they comprise nothing more than “rework.” (See Testimony of Jon W. Dudas before the subcommittee on Intellectual Property Committee on the Judiciary April 21, 2005 (p. 9), Ex. 26 to Rueda Declaration dated December 20, 2007 (“Rueda Decl.”). Nonetheless, the USPTO cites no evidence to support this assertion in the record other than rehashing Mr. Dudas’ own earlier unsupported assertion, which type of ipse dixit statement does not become fact through mere repetition.

The crux of the case, with regards to permissibility to implement the new rules, is whether the proposed rules are merely procedural, as the PTO argues, or substantive. The agency does not have authority for substantive rule-making.

Neither the general grant of procedural rulemaking authority to the USPTO in 35 U.S.C. §2(b)(2), nor any other statutory provision, expressly or impliedly authorizes the USPTO to make rules that “carry the force of law” -- that is, provide for substantive or legislative rulemaking authority, with respect to long established continued examination practice or claim practice provided for under the Patent Act.

Of course, it is not surprising that the USPTO would seek to masquerade its Final Rules as non-substantive given that the Federal Circuit and its predecessors have ruled that the USPTO does not have substantive rule making authority. Merck & Co., Inc. v. Kessler, 80 F.3d 1543, 1549-1550 (Fed. Cir. 1996)(“Merck”); Eli Lilly & Co. v. Bd of Regents of Univ. of Washington, 334 F.3d 1264, 1269 n. 1 (Fed. Cir. 2003)(“Eli Lilly”)(reaffirming Merck); Animal Legal Defense Fund v. Quigg, 932 F.2d 920, 927 (Fed. Cir. 1991)(“ALDF”); see also In re Hogan, 559 F.2d 595 604 n. 13 (CCPA 1977)(“[A] limit upon continuing applications is a matter of policy for Congress, not us.”); In re Henricksen, 399 F.2d 253 (CCPA 1968)(finding no statutory basis to limit the number of continuation applications); see also Tafas Mem. In Supp. of Motion for Summary Judgment dated December 20, 2007 at pp. 8-10.

On limiting claims, the USPTO argument was that what was not explicitly proscribed is permitted with regard to the agency making its own rules.

The USPTO urges the Court to “uphold Final Rules 75 and 265 as a reasonable exercise of the USPTO’s Section 2(b)(2) authority.” (Def. Mem. at 27). The USPTO claims that 35 U.S.C. §§ 111, 112, 131, and 151 do not prohibit the USPTO from imposing an absolute limit on the number of claims nor do they preclude the USPTO from requiring an Examination Support Document (ESD) if an artificial threshold number of claims set by the USPTO are exceeded. Again, the USPTO purports to derive its rule making power from the generic language in 35 U.S.C. § 2(b)(2)(A)-(C) authorizing the USPTO to “facilitate and expedite the processing of patent applications.” (Def. Mem. at 29).

The USPTO’s arguments are plainly unsupported. As admitted by the USPTO at A07333, the “patent statute and rules of practice do not limit the number of claims (independent or dependent) that may be presented in an application.” This is because, as stated in the case of In re Wakefield, 422 F.2d 897, 900 (C.C.P.A. 1970), the courts have consistently held that “[A]n applicant should be allowed to determine the necessary number and scope of his claims …”

The consistency of this holding has even been acknowledged by the USPTO’s own Board of Patent Appeals and Interferences:

As to the issue of ‘undue multiplicity,’ it is well established that an applicant has the choice of deciding as to the number of claims so long as they are consistent with the disclosure and the requisite filing fees are paid. Ex Parte John E. Maloney et al., 1999 WL 33205694 (Bd. Pat. App. & Interf. 1999) (nonprecedential).

Arguing arbitrary and capricious rulemaking, the Tafas brief asserted "numerous documents found in the administrative record which go to data and assumptions used during the rulemaking process which were not made available to the public, as they should have been, during the rulemaking process."

The USPTO’s public representations often do not match its internal numbers. For example, in internal documents, the USPTO acknowledged that the “10 representative claims” rule would have affected 82% of applications (Exhibit 16, A04552). Yet, in contrast, in its statements to the public and the rest of the executive branch, the USPTO represented that only 1.2% of applications would require “additional effort” by the applicant.

The PTO’s failure to answer well-founded issues raised in the Comments, failure to investigate to develop reliable and substantial evidence; and failure to follow its own Information Quality regulations, shows that the rules are arbitrary and capricious.

Dr. Ron Katznelson extensively analyzed the situation.

Dr. Katznelson agrees that the information used in the USPTO’s certification was misleading, incomplete, erroneous and, that the USPTO’s economic impact analysis was entirely flawed. Dr. Katznelson presents copious data in a paper written by him at Appendix E to his brief indicating the RFA study grossly understated the number of small entities affected by the claim limit rule; failed to identify fundamental factors that govern the costs of preparing the ESD (as to this point, see also, the amicus brief of the Bar Association of the District of Columbia at 15, and the amicus brief of AIPLA19 at pp. 11–12); inappropriately annualized ESD costs over 20 years (he argues that such analysis assumes that the average small entity files one patent application every 20 years, rather than the true average of 1.2 applications per year – (See page 5 of his brief); impermissibly ignored the economic burdens of rebutting the presumption of patentably indistinct claims (he notes that the USPTO assumed the cost for such burden to be 0, while in fact his estimates show an average cost per small entity application to be in excess of $4,200 – see page 5 of his brief); and, failed to analyze or consider other important aspects of the problem. Further, Dr. Katznelson carefully demonstrates that the USPTO’s assertion of equivalence between the 5/25 claim limit and the 15/75 claim limit lacked any support.

As did Dr. Richard Belzer.

Exhibit 13 hereto is a letter from Dr. Richard Belzer to OMB’s Office of Information and Regulatory Affairs, that estimates the total burdens on the private sector that would be imposed by the Final Rules that the USPTO has proposed. Dr. Belzer notes numerous public burdens that were not included in the USPTO estimates and estimates these items at about $ 10 billion in annual burden. (Belzer estimates, Exhibit 13, pages 83-90.) The USPTO cannot assert that the rules are “reasonable” when it omitted burdens of this magnitude. Failure to “consider an important aspect of the problem” is arbitrary and capricious. State Farm, 463 U.S. at 43.

The above sketches just some of the issues and arguments brought forth. Read the briefs.

Tafas opposition brief; Appendix E - Katznelson analysis; Katznelson amicus brief; Exhibit 13- Belzer letter to OMB

Posted by Patent Hawk at January 28, 2008 12:13 AM | The Patent Office


I cannot believe that anyone at the USPTO would be altering rules when the rules are being tested enough with the Iviewit matters before both Dudas and Moatz. Iviewit involves ongoing investigations since 1999 of over 10 law firms involved in fraud on the USPTO. Lawyers putting up to 90 patents in there own names, lawyers falsifying oaths and perhaps a coup on the USPTO.
At the direction of Moatz upon discovery that evidence existed of such plot to steal the Iviewit inventions, a formal request for suspension of the IP was granted by the USPTO Commissioner pending ongoing investigations that seem to be ongoing now forever. Patent suspension extensions and requests for patents files and file wrappers completely ignored, Moatz then advising that an act of congress was now necessary to aid the inventors. Inventors petitioned Dianne Feinstein, at the same time the matters were forwarded by Nita Lowey D NY, to John Dingell of the House Commerce Dept who then forwarded them for review to the House Judiciary Committee were they have sat on it now forever.
Well the matters were also reported to the state bars, where attorneys and disciplinary departments in New York are now found beating up 62 F Supreme Court attorneys for not wanting to suppress evidence in cases with overwhelming evidence against attorneys. Iviewit is named in the first complaint filed as the cause of the employee’s termination. Iviewit filed a 1.5B federal lawsuit in response, docket #07-CV-11196 with The Honorable Shira A. Scheindlin who related the Civil/Criminal RICO case of Iviewit to the Christine Anderson v. State of New York case.
Will the denials of due process and denial of patents cease here, we shall wait to see how Shira's court acts to uphold or trash the Constitution, I mean the Pre King/Decider Georges one. The changes to the USPTO rules by the same people changing the Constitution to allow torture really is frightening as criminals may be at the helm of the ship and the changes may be part of a devious ploy to rob the National Treasure of free commerce and democracy, the grand ole USPTO.
If the USPTO is criminally cracked by these criminals guised as honest attorneys, well in one theft, say Iviewit, you can steal technology worth an estimated trillion dollars from one little ole inventor, imagine on a larger scale.
The Iviewit case will be a test if the process of patent protection is actually working against inventors getting IP rights or if they should patent in Russia. I have faith in good v. evil but so far evil is deep in the process and already there before I got there so it may take a bit more time to weed it out.
Best in your efforts to keep the sanctity of the USPTO ~ Eliot Bernstein, Inventor

Posted by: eliot bernstein at January 28, 2008 5:42 AM

The PTO's "support" for its rule changes are hilarious. They state things in their brief like, "Continuations are hampering the Office's ability to examine new applications" and then they cite to the Federal Register notice containing the final rules. Of course, the Federal Register notice contains absolutely no evidence and merely states Dudas and Doll's opinions as to what is causing the backlog. (Well, it's not really their opinion. They know their own mismanagement has caused the backlog, but they figure if they just repeat over and over, "The backlog is the fault of applicants and the patent bar" that will stick eventually. Hopefully J. Cacheris will call the PTO on this charade.

Posted by: JD at January 28, 2008 5:46 AM

The Tafas reply to the PTO memorandum is its best effort yet in this case. The reply addresses to the key issue (PTO has no substative rule-making authority), points out very carefully and repeatedly the complete lack of evidence to support the Rules or the benefits alleged for these Rules, weaves in very nicely the Amicus Briefs in support of Tafas' position and against the PTO's positions, and negates or minimizes very effectively the minimal Amicus support for the PTO's position. I just hope Cacheris reads this reply very carefully and accepts what it accurately states.

Posted by: EG at January 28, 2008 11:21 AM