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February 8, 2008


In the Eastern District of Virginia today, savvy Judge James Cacheris heard oral arguments on whether the USPTO may implement its proposed examination rules changes. The crucial issue is whether the changes are substantive, which they are. Textbook interpretation is that the patent office is proscribed by law from promulgating substantive changes, and from applying them retroactively, as in this instance. The sanctimonious PTO argued that the changes were not substantive, but if even they were, the agency had authority. Judge Cacheris swore to render decision ASAP, but "there is a lot of paper to consider."

Judge Cacheris will rule that at least some, if not all, of the proposed changes are substantive, and that the agency does not have statutory authority to make them, or, at the least, in the manner in which they were made. The decision, when it comes, will be analytically copious and cogent, anticipating the next move in this chess game: the patent agency will most certainly appeal.

The current injunction freezing implementation will remain in place pending appeal outcome.

The USPTO will refine its arguments while sharpening its knives, as the opposition sticks to its guns, and fortifies with more amici chirping.

If nothing else, the taint of failing to abide by Administrative Procedures Act (APA) rules during promulgation, and subsequent cover-up, is likely to result in the agency being forced to go back to square one and start the process all over. Even by the time the appeals court takes the matter up, the puckeys now running the PTO will be toast: tossed by a new administration for performing such shambolic shenanigans in the first place. But before that happens, the agency may try to do an end run by crafting new "procedural" rules, attempting to achieve a similar effect of offloading examination at applicant expense; they may be contemptuous, but they are cunning.

Other coverage: in the moment at PLI; Patently-O (great coverage there by Jill Browning); Patent Baristas. The Patent Prospector has covered this story repeatedly; please check the Patent Office archives.

Posted by Patent Hawk at February 8, 2008 7:27 PM | The Patent Office


Nice post, including the comment aobut the great coverage by Jill Browning (an "atta girl" here Jill) on Patently-O on yesterday's. You're also absolutely on point about the deviousness of the current PTO hierarchy. The current PTO hierarchy knows no shame, and will go to any ends to achieve its "political agenda" (it's not the "noble purpose" they allege which is simply a smoke screen for all this Rules malarkey). I'm counting the days to when this PTO hierarchy will be history, and will hopefully leave behind no more "collateral damage" on the U.S. patent examination system.

Posted by: EG at February 9, 2008 5:58 AM

Just a quick observation concerning the casual use of the terms "procedural" and "substantive". I have always used the terms "interpretive" and "legislative", as was drilled into my head by my Administrative Law professor, Ken Davis.

In what I readily admit is a simplistic view of these terms, I have always understood "substantive/legislative" rules to signify that an agency has been duly authorized by Congress to engage in rulemaking so as to "fill in the blanks" by crafting rules having the full force and effect of law. Keeping this in mind, I do have to wonder just what "blanks" were left by Congress in Title 35 that were left for the USPTO to "fill in". Certainly the continuation statute does not reflect an intent by Congress telling the USPTO that it should feel free to enact rules scaling back the statute's provisions. The same can be said for the "5/25 + ESD" rule. Try as I might, Congress had been quite clear in defining what an application must contain in order to be ready for examination. I simply cannot find within the governing statutes any suggestion that the USPTO if free to add additional substantive requirements such as an ESD. Closely allied is the 5/25 concept that draws a line of demarcation concerning the mandate for an ESD. The only thing I have ever seen concerning the number of claims in an application is the need to pay more $$$ if the 3/20 threshhold is exceeded, of if a multiple dependent claim is contained in an application.

To my way of thinking the proposed rules seem to reflect a mindset within the USPTO that Congress has not gone far enough under Title 35 in defining statutory requirements, so it feels duty bound to add a few more. In areas where it feels that Congress has been to liberal, it is likewise duty bound to scale back such liberality.

Perhaps the USPTO would do well to refresh its recollection of basic rules concerning statutory construction. Our courts believe these rules retain their vitality. If I may be so bold as to suggest that the USPTO reorient its thinking to conform to to what our courts believe and apply with consistency.

Posted by: M. Slonecker at February 9, 2008 9:32 AM

To answer Mark Nowotarksi’s question on Patently-O about why the “why the USPTO is fighting so hard” for these rules, and why John Doll has been the most forceful advocate, I suspect that the reason is found in 35 U.S.C. § 3(b)(2)(B):

(B) Salary and performance agreement.--The Commissioners shall be paid an annual rate of basic pay … In addition, the Commissioners may receive a bonus … based upon an evaluation … of the Commissioners' performance as defined in an annual performance agreement between the Commissioners and the Secretary. The annual performance agreements shall incorporate measurable organization and individual goals in key operational areas as delineated in an annual performance plan agreed to by the Commissioners and the Secretary.

Bonus information was disclosed in earlier PTO annual reports. Strikingly, the last few years’ PTO annual reports have all failed to disclose bonus information – every year, oops, this information comes available just after publication of the annual report. E.g.,

http://www.uspto.gov/web/offices/com/annual/2006/2006annualreport.pdf at page 23 (PDF page 25).

Similarly, the “annual performance agreement” and “measurable goals” criteria for bonus have not been disclosed – but I’ll bet you an awful lot that backlog is high on the list of bonus criteria. I will also bet you a lot that of Commissioner Doll’s statutory obligation to “be responsible for the management and direction of all aspects of the activities of the Office that affect the administration of patent … operations,” for instance, ensuring compliance by examiners with criteria in the MPEP and 37 C.F.R. § 1.104 for evaluating patentability to make sure that no applications are rejected for unauthorized reasons and without required explanation - is either not on the list, or very low.

Posted by: Points to Ponder at February 9, 2008 9:54 AM

I don't have my notes handy, but just after the rules re: cons and 5/25 claims were proposed, I attended a talk given by a BPAI judge on the patent appeals process. He REFUSED, point blank, to say anything about the proposed new rules. But then, in a non sequitur, he pointedly stated that the Patent Office Board of Appeals was not administered as part of the USPTO. Its budget is separate.

Many of us took this as a coded message that moving large numbers of cases to the appellate level was the USPTO's way of moving cases off its docket. Preventing filings would reduce caseload at the other end.

Simple, really, when you think about it.

Posted by: PatentMedicine at February 10, 2008 6:41 PM