Tafas Objects to Vacatur in Claims and Continuations Appeal

By Gene Quinn
October 19, 2009

James Tissots David & Goliath, circa 1896

James Tissot's David & Goliath, circa 1896

Late this evening attorneys representing Dr. Triantafyllos Tafas filed a Reply to Motion for Dismissal of Appeal and Request for Remand. In this filing Tafas points out that the decision made by USPTO Director David Kappos to withdraw the claims and continuations rules does moot the appeal, there is a difference between mooting an appeal and vacating an underlying district court decision. It seems clear that Dr. Tafas does not want to stand in the way of the extremely positive and responsible decision made by Kappos, but at the same time is at least a little troubled by the possibility that the underlying district court decision issued by Judge Cacheris might be erased as if it never happened. Among other things, erasing the district court decision would likely make it impossible for Tafas to make any claim for payment of his attorneys fees as a prevailing plaintiff.

There are two excellent points raised by Tafas in this filing.  First, his right to seek attorneys fees should not be compromised.  Second, Supreme Court precedent clearly counsels against vacatur.  With respect to these issues the Reply succinctly explains:

The PTO’s decision to rescind its Final Rule changes published in the Federal Register on August 21, 2007, while again commendable and praiseworthy, does not, and cannot, render moot Tafas’ right to apply either in this Court or at the district court — after the entry of final judgment dismissing the appeal — for an award of fees and costs as a prevailing party pursuant to the Equal Access to Justice Act, 28 U.S.C § 2412 (“EAJA”), as an exceptional case under 35 U.S.C. § 285 or, as might be allowed under other applicable law. Staley v. Harris County, Tex., 485 F.3d 305, 314 (5th Cir. 2007)(“A determination of mootness neither precludes nor is precluded by an award of attorneys’ fees. The attorneys’ fees question turns instead on a wholly independent consideration: whether [Tafas] is a prevailing party.”). See, also, US. Bancorp, at 21.

Of course, mere post judgment prosecution by Tafas of his fee application is collateral and does not implicate the need for any further contested proceedings between the parties concerning the validity of the Final Rules. In light of all the foregoing, Tafas agrees that this Court should enter a judgment dismissing the PTO’s appeal as moot, but without prejudice to the right of any party hereto to apply post judgment for attorneys’ fees and costs as might be allowed under the EAJA or other applicable law. Again, Tafas welcomes the PTO’s withdrawal of its appeal on terms that will not prejudice Tafas’ ability to apply as a prevailing party for recovery of his substantial attorneys’ fees and costs.

Tafas understands that vacatur of the district court’s judgment by this Court would be directly contrary to U.S. Supreme Court precedent, which plainly provides that any mootness caused while the case is on appeal by the unilateral act of the losing party in the district court below (i.e., the PTO) is not a proper grounds for a court of appeals to vacate the underlying district court judgment. US. Bancorp, 513 U.S. at 25. Judgments or decisions are not typically vacated when the party that lost at the district court level declines to pursue an appeal to completion. Karcher v. May, 484 U.S. 72, 82-83 (1987). In US. Bancorp, the Supreme Court made it clear that vacatur of an underlying district court decision is an equitable determination that is only appropriate in exceptional circumstances. U.S. Bancorp, 513 U.S. at 26. Where an agency of the federal government, such as the PTO here, has been adjudicated to have engaged in dubious actions that supersedes its authority, equity mandates that the ruling not simply be erased as if it never happened. In sum, governmental overstepping followed by a subsequent mea culpa does not create an exceptional case that warrants vacatur. Again, Tafas commends the PTO for coming to the right decision about the Rules, albeit belatedly, but erasing the district court decision altogether now that the PTO has already withdrawn the Rules is neither necessary nor appropriate.

I must confess that I had not considered Dr. Tafas’ right to obtain fees as a prevailing party, which is likely because I was not paying the legal bill and I was not representing him.  This does seem to be a compelling argument, particularly in light of Supreme Court precedent holding that it may be appropriate for an Appellate Court to return a case to the district court for consideration of whether equity supports vacating the underlying opinion.  Who is in a better position to make such a determination than the district court?  The district court would be the one deciding any motion for attorneys fees, so it would seem appropriate for the district court to consider first the awarding of attorneys fees and then second whether there exist equitable grounds making the case exceptional and warranting vacatur.

Lets not jump so quickly past the exceptional status of the case.  According to the Supreme Court in U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18 (1994), vacatur is appropriate as a result of a settlement only in exceptional cases. So is this really an exceptional case? I tend to think it is an exceptional case, but not the sort of case the Supreme Court was referring to in Bancorp. The equities of the case suggest that it is appropriate for the underlying district court decision to remain intact as a reminder to the USPTO and other government agencies that do not possess substantive rulemaking authority the consequences of recklessly ramming rules through that are inconsistent with statutory provisions. I could not agree more with Tafas’ attorneys when they say “governmental overstepping followed by a subsequent mea culpa does not create an exceptional case that warrants vacatur.”

As I stated 10 days ago, if the Federal Circuit does order the underlying district court decision to be vacated they will not be operating on very strong legal grounds.  While there may be some support for awarding vacatur whenever the federal government is involved because they are a frequent user of the legal process, under what rationale is it acceptable for the federal government to receive preferential treatment?  Under what rationale is is appropriate for the government to do something, get caught doing it and then having the evidence of overstepping erased as if nothing ever happened?  It is simply not the American way to allow government to play by a different set of rules.  Our legal history is replete with situation after situation where federal courts stood up and have explained that the law is the law and no one is above the law, not even the President himself.  I don’t for a minute think this case is as significant as Watergate, but I think if U.S. Bancorp. means anything it has to mean that settling to erase an unfavorable opinion is nothing more than gerrymandered justice.

The reality is that the claims and continuations rules are dead, and in the end the Federal Circuit will not force the case to continue because they no longer have any jurisdiction over the dispute.  But Tafas should be allowed to make arguments regarding his entitlement to attorneys fees.  At a time when the entire patent legal community was astonished by the claims and continuations rules one single man stood up and said enough is enough, and that was Dr. Tafas.  GlaxoSmithKline eventually joined the fight, and waged a good fight no doubt.  It is impossible to ignore the reality that the outcome at the end of the day was exactly as Dr. Tafas wanted, the rules did not go into existence.  It is naive to think that would have been the case absent the district court ruling.  To the contrary in fact, without the ruling by Judge Cacheris we would be living under a draconian set of rules and clamoring to alter and amend those while they continued to do damage to the most commercially viable innovations subject to patent applications.

Whether the law will ultimately declare Dr. Tafas a prevailing plaintiff or not is of no real importance.  He deserves his opportunity to make the claim, and we all deserve the permanent memorialization of the permanent injunction order issued by Judge Cacheris.

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.

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There are currently 1 Comment comments.

  1. breadcrumbs October 24, 2009 1:11 am

    If Tafas succeeds, does jurisdiction matter? That is to ask, if Tafas holds out and vacatur is not applied, is the Office as a losing party foreclosed from attempting to install any of the rules that were judged to be illegal by Judge Cacheris? For example, woudl the Office be even able to make a rule that required applicants to perform a search and analysis (like the IDS)? Some have said this migh be the case in the particular district – but I’m wondering that since the Office is specifically a losing party, that district jurisdiction may not matter.