Federal Circuit Grants USPTO, GSK and Tafas More Time

By Gene Quinn
April 28, 2009

Federal Circuit Building

Last Thursday I wrote regarding the USPTO, GlaxoSmithKline and Dr. Tafas jointly requesting an extension of time within which to either request reconsideration or rehearing en banc of the Federal Circuit’s decision in the claims and continuations saga.  This morning I learned that the Federal Circuit has granted the requested extension of time, so the parties have until the end of business on June 3, 2009 within which to move for reconsideration or rehearing en banc.  My thought is that asking for an extension of time likely means that one or more of the parties will seek either reconsideration or rehearing en banc, and I cannot believe reconsideration is what is in the cards.  With a case like this, with so much on the line, the three judge panel made up of Judges Rader, Bryson and Prost certainly gave the matter the full consideration it deserved.  Thus, I am anticipating a request for rehearing en banc.  With a matter of such great importance I would be surprised if the Federal Circuit did not want to hear this one en banc, so I suspect we will soon be Federal Circuit watching again as this dispute goes into extra innings!

One question that might be on the minds of some this: why would the Patent Office want to ask for reconsideration or rehearing?  The Patent Office wanting further Federal Circuit review seems a lot like a greedy gambler who has just won big, but wants to win bigger.  The risk is that by pushing the matter the Patent Office will not ultimately walk away with as much as they have right now.  I have been hard pressed to find anyone who agrees with the original three-judge panel decision, including those who thought the Patent Office would prevail.  Those who believed the Patent Office would prevail did not anticipate the way in which the Court so willingly found all of the Patent Office’s actions to be procedural.  We all know that what the Patent Office did was not procedural.  How intelligent people could view the substantive changes the Patent Office rule would force as being procedural is bizarre.  There is nothing procedural about altering rights while the game is being played.  There is nothing procedural about directly contradicting a statute.  It seems to me the USPTO was given a gift on a silver platter and are upset that the platter was not made of gold instead.

The real reason the USPTO will continue to pursue this matter, if in fact they do want to go double or nothing and force the issue, is because the one thing they lost on is the one thing they need in order to make all of the other rules make logical sense.  Without the ability to limit the number of continuations one can file the problems facing the Office get worse, not better.  Limiting claims to 5 independent claims and 25 total claims without the filing of an Examination Support Document is really an unenforceable rule unless you can also limit the number of applications that can be filed.  An argument could be made that forcing bite-size applications makes sense even without the continuations limit, but reality is that the average patent application already contains less than 5 independent claims and 25 total claims.  In fact, significant internal debate surrounded the fear that by setting the limit at 5 and 25 there would be incentive given to applicants to include more claims and thereby unwittingly increasing the work of the Office.  So the whole case must turn on continuation limits, at least insofar as these rules packages are concerned.

What the Patent Office should do is take this decision and run.  I am reminded of Kenny Rodger’s famous song “The Gambler.”  Every gambler knows that the secret to surviving is knowing what to throw away and knowing what to keep, and the Patent Office should throw away these rules and keep the decision of the three-judge panel.  The decision in place would allow the Patent Office to force all applicants to prepare and file an Examination Support Document.  We all know that you would be a fool to file an ESD because it would render the issued patent completely useless unless the Federal Circuit were to completely retreat from its recent inequitable conduct cases.  So why then would the Patent Office want to force the most commercially relevant inventions to become commercially useless thanks to the admissions present in an ESD?  I can’t answer that question, and I am not sure anyone else can either.

The Patent Office is confronted with an interesting choice.  They have been green-lighted to require an Examination Support Document in every case, yet they are not rushing to do that.  Why?  If an ESD is so wonderful, so helpful and the Patent Office is not concerned about rendering the issued rights worthless, then they should require an ESD to be filed in every case.  The reason they are not rushing to take this decision as it is, rewrite the rules and force ESDs upon all applicants is because the Office knows that would never fly.  The outcry would be enormous.  Everyone would line up against the PTO, Congress would hear from every constituency and the entire program would crash and burn.  There is no way the PTO could ever force all applicants to file an ESD, so why then should they want to force ESDs to be filed when the inventions are among those most likely to have a positive impact on industry and the economy?

Yesterday the Supreme Court refused to accept cert. in the Aventis case, which means we continue to be left with uncertain inequitable conduct laws.  While we don’t have a split among circuits that the Supreme Court seems to love, we are at the point where your inequitable conduct ruling is completely dependent upon the panel you draw.  The Federal Circuit ignores the Patent Office and 37 C.F.R. 1.56, which is absolutely 110% procedural.  The irony of this is that the Federal Circuit has now ruled that the Patent Office can do pretty much whatever it wants and it will be called procedure, save the one thing that is clearly procedural.  Defining what prior art should be submitted is obviously within the right of the Patent Office and it is pathetic that the Federal Circuit refuses to defer on such an important issue.

With the Supreme Court AWOL on inequitable conduct, and a deepening battle between the USPTO and the Federal Circuit, applicants are getting squeezed.  The one thing the USPTO needs most to make progress with the backlog and expeditiously granting patents is inequitable conduct reform.  There will be no help from the Supremes, so Congress must step in and make the only change that is really required, which is inequitable conduct reform.  Of course, I am not going to hold my breath for Congressional activity.  Neither am I going to hold my breath for Federal Circuit uniformity.  So that means that the fight must go on against USPTO reforms.  The sad thing is that at least some of the proposed reforms could make sense if you just took away the 800 pound inequitable conduct gorilla.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 6 Comments comments.

  1. 6 April 28, 2009 5:08 pm

    “The one thing the USPTO needs most to make progress with the backlog and expeditiously granting patents is inequitable conduct reform. ”

    W U T? Gene, seriously, it’s things like this that keep this blog full of humor, but publicly espousing such mess has got to be embarrassing after awhile. Allow me to help you out.

    “The one thing the USPTO needs most to make progress with the backlog and expeditiously granting patents is inequitable conduct reform. ” becomes “The one thing the USPTO needs most to make progress with the backlog and expeditiously granting patents is inequitable conduct reform or 5 billion dollars or to be able to threaten to close its doors for awhile. With the later two being the most preferable, but probably not available.”

  2. Gene Quinn April 28, 2009 8:49 pm

    6-

    Back to disagreeing with you. Obviously you have not thought this one out very much. Inequitable conduct is the single issue standing between a functioning patent system and the dysfunctional system we have. If you had inequitable conduct reform the PTO could reasonably require more and better information from attorneys and applicants. That simply cannot happen now because anything disclosed is fodder for inequitable conduct. The Federal Circuit has turned inequitable conduct into a simple negligence matter. When the standard employed by the CAFC is “knew or should have known” that is not even gross negligence, that is a pure negligence standard. It is the CAFC that prevents the Office from getting good information and attorneys and applications materially participating in the issuance of patents. The hide-the-ball prosecution is a function of CAFC inequitable conduct law.

    -Gene

  3. 6 April 29, 2009 4:58 pm

    “The Federal Circuit has turned inequitable conduct into a simple negligence matter. ”

    Idk man, I’ve read many of the same cases you have on the matter and I have to disagree. Materiality and intent. Negligence does not involve an inquiry into either to my knowledge. Then again, I haven’t studied it at length.

    Either way, we can require info from you reasonably whether or not the courts are going to bust your chops later. Take that matter up with the courts, not us. It might be better to take that matter up with congress and go above the court’s heads. I believe you posted above though that both the courts and congress aren’t inclined to change either. Personally, I feel IC is just fine as it is, except that perhaps it should be harder to bring those charges as Judge Linn was brining up the other day.

    “When the standard employed by the CAFC is “knew or should have known” that is not even gross negligence, that is a pure negligence standard. ”

    Still has to be material.

    “The hide-the-ball prosecution is a function of CAFC inequitable conduct law.”

    Perhaps, but it seems to me like attorneys just being open and honest about what they know, and how well they know it should suffice. And I doubt VERY seriously that there are that many people invalidated under IC rulings that did not in fact commit IC. Like 1% max. So I feel like whatever standard they’re using is working out ok, and that new rules can be put in place to take care of the applicant’s reluctance to bring forth info.

  4. 6 April 29, 2009 5:03 pm

    I should add, that yes, I’ve thought that through, and I agree with you that IC reform would be good for getting things going in prosecution. The problem is, get too lax on the punishment and people will feel free to mislead and etc. Can’t be having more of that than there already is. I already routinely call attorneys out on misleading bs during prosecution. I don’t need to wade through more of that mess.

    The problem, in the end, boils down to attorney ethics. And even though I’m not really one to believe attorneys are evil, many just simply do not believe in doing justice during prosecution, and are more interested in this bogus zealous advocacy sht you guys make up. You are officers of the court and attorney ethical requirements are in bad need of overhauling.

  5. Gene Quinn April 29, 2009 11:50 pm

    6-

    It is scary to see an examiner who so clearly doesn’t understand the role of attorneys, and law in general. The “bogus zealous advocacy” is actually an ethical requirement, not a fiction. God, I hope you are not an examiner!

    -Gene

  6. Gene Quinn April 30, 2009 11:00 am

    “Either way, we can require info from you reasonably whether or not the courts are going to bust your chops later.”

    Yes, you can, but then we just parse our words and carefully give you what you asked for without saying anything useful to the Office or that could come back later. This is why there is hide-the-ball prosecution. You complain about that and then say that this is not an Office issue. Talk about sticking your head in the sand.

    “Still has to be material.”

    Define for me “material.” It is nice to throw around the legal standard, but refusing to acknowledge that the USPTO view of material and the CAFC view of material are diametrically opposed is not helpful. The USPTO says to be useful a reference must be grounds for a valid rejection. The CAFC says a reference is material if an examiner would want to see it and consider it, even if it does NOT provide grounds for a valid rejection. Then you have Harry Moatz saying he will investigate patent attorneys and agents who submit voluminous art (as is required by the CAFC). The USPTO is the one with the problem, yet the leaders seem only interested in trying to put patent attorneys between a rock and a hard place. The USPTO should be lobbying Congress to force the CAFC to abide by the definition of the duty of candor in Rule 56.

    “it seems to me like attorneys just being open and honest about what they know, and how well they know it should suffice.”

    Exactly! As soon as there is inequitable conduct reform that could be expected. Until then we are legally required to advance our clients interests as best we can, and that means NOT being forthcoming. We simply cannot concern ourselves with making an examiner’s job easier when that would forfeit significant rights for our clients. We walk a narrow line, but expecting patent attorneys and agents to be helpful and forthcoming is naive given the current state of CAFC inequitable conduct law.

    “And I doubt VERY seriously that there are that many people invalidated under IC rulings that did not in fact commit IC.”

    Actually, people are not invalidated, and neither are patents or patent claims. When inequitable conduct is found the entire patent is unenforceable. Your law professors would cringe if they heard you make such a statement.

    “So I feel like whatever standard they’re using is working out ok, and that new rules can be put in place to take care of the applicant’s reluctance to bring forth info.”

    So everything is fine, we just need new rules. Wow! I am speechless.