Having it Both Ways: the USPTO’s Inconsistent Positions in In re Lovin and Kappos v. Hyatt

By Sue D. Nym
October 20, 2011

Since 1993, the United States Patent & Trademark Office (USPTO) has pursued an “aggressive campaign” to free itself from oversight by and accountability to the courts. [1]  At the same time, the USPTO has been just as aggressive in ignoring the provisions of the Administrative Procedure Act (APA) and related administrative laws that place responsibilities on the USPTO vis-à-vis the public.  Fortunately, most administrative laws provide the public a remedy exercisable against agency overreaching:  when an agency skirts its obligations, the agency loses its powers of enforcement vis-à-vis the public.  Unfortunately, in July 2011 the Federal Circuit in In re Lovin [2] (opinion authored by Judge Dyk) allowed the USPTO to avoid obligations that the USPTO owes the public under the APA, while giving the USPTO judicial deference on issues where the APA grants none.  A petition for rehearing of the Lovin case would give the en banc Federal Circuit the opportunity to ”right this wrong,” and to give the public the remedy that Congress intended, and to reinforce that the Administrative Procedure Act gives agencies both rights and obligations.

Much of the USPTO’s efforts to insulate itself from judicial oversight now well known.  For example, the history of the USPTO’s “aggressive campaign” for heightened deference vis-à-vis the courts was chronicled by Chief Judge Mayer in In re Zurko,[3] with this campaign culminating in Dickinson v. Zurko.[4]  The newly-enacted America Invents Act (AIA) grants the PTO broad new powers, and reduces the public’s right to seek judicial correction of USPTO error.  The USPTO seeks to avoid even more accountability in its Kappos v. Hyatt appeal currently pending at the Supreme Court.  But one of the USPTO’s major public efforts was rebuffed when the USPTO published five Notices of Proposed Rulemaking in 2006 and 2007 (including the infamous Continuations and 5/25 Claims rules) that would have imposed tens of billions of dollars of costs on the public,[5] as well as shifting burdens of proof, and the like.  In public litigation, the Eastern District of Virginia and Federal Circuit held that many of these rules exceeded the USPTO’s rule making authority.[6]  The Office of Management and Budget in the Executive Office of the President (OMB) declined to approve the USPTO’s 2008 appeal rules in December 2008, with no written decision, other than a directive to remove the rule from approval,[7] and the USPTO’s Federal Register Notice announcing a stay of the effective date.[8]

Meanwhile, out of the public eye, in fall 2007, OMB reviewed four of the five 2006-08 rules under the Paperwork Reduction Act (PRA).  No later than January 2008, OMB “directed” the USPTO to “remove” the Continuations and 5/25 Claims rules from any request for approval.[9]  These were the same rules at issue in the Tafas litigation.  Surprisingly, the USPTO continued to litigate in the Virginia District Court and Federal Circuit until July 2009, without informing the parties or the court of OMB’s “directive” that rendered the case effectively dead.

Having found that it could not obtain its desired amendments to rules through above-board processes, the USPTO shifted to “stealth” proceedings.  This keeps the USPTO’s rule making away from public review, and out of sight of the judiciary or OMB.  For example:

  • In April 2007, the USPTO made a major change to restriction practice by issuing a secret memorandum (“restriction practice memo”) to examiners and updating the form paragraphs available for use by examiners.[10]  This restriction practice memo was unpublished and totally unavailable to the public for over two years.  Despite the hundreds of millions of dollars of annual costs that this restriction practice memo imposes on the public, the USPTO simply ignored the requirements of the APA (5 U.S.C. §§ 552(a) and 553), the Regulatory Flexibility Act (RFA, especially 5 U.S.C. §§ 603 and 604), the PRA (44 U.S.C. §§ 3506 and 3507, and 5 C.F.R. Part 1320), Executive Orders 12,866 and 13,422, and a directive from the Executive Office of the President.[11]  The law and the USPTO’s own written procedures require that the USPTO consider this restriction practice memo obsolete and to cease enforcement when the MPEP was republished without this restriction practice memo being incorporated.[12]  Nonetheless, the USPTO continues to defy the law as it continues to enforce this restriction practice memo against applicants.
  • For many years, the Board of Patent Appeals has observed that the plain text of the 2004 appeal rules provides that when an appellant raises new arguments in a Reply Brief, the correct procedural safety valve was for the examiner to prepare a Supplementary Examiner’s Answer.[13]  In 2007-08, as part of its proposed appeal rules, the Board attempted to amend these rules to provide that arguments not in the opening Appeal Brief would be waived, and could not be raised in a Reply Brief.[14]  In December 2008, the Executive Office of the President barred the USPTO from implementing the 2008 rules, and in December 2009 specifically instructed the Board to apply only the 2004 appeal rules and no more.[15]  Yet, only two weeks after this Presidential directive, the Board stated that it would enforce this forbidden provision of the 2008 appeal rules.[16] Further, the rationale given by the Board was to replace the text of the regulation:  “Any arguments or authorities not included in the brief or a reply brief filed pursuant to § 41.41 will be refused  consideration by the Board, unless good cause is shown” by rewriting the regulation using ellipses, “any arguments or authorities not included in the brief . . . will be refused consideration by the Board, unless good cause is shown” (ellipses in Borden replacing “or a reply brief” of § 41.41).[17] [18]

The Lovin case involves another example of the USPTO trying to amend its rules without going through the procedures required by law.  The Examiner in Lovin’s case had “rejected” dependent claims, with no explanation whatsoever in the final Office Action , including no identification of the pertinent references relied upon for rejecting these dependent claims.  Lovin appealed to the Board, noting that the relevance of the references to the dependent claims was not apparent, and that the Examiner had not even explained any relevance to these dependent claims.  Under the Board’s long-standing precedent and the plain wording of the pertinent rule (37 C.F.R. § 41.37(c)(1)(vii)), this was sufficient for an Appeal Brief.

In the past, when an appellant complained of an examiner’s failure to explain a rejection, the Board observed that it lacked jurisdiction to decide that precise procedural issue,[19] but acted to ensure that the appellant would not be penalized for the examiner’s failure to observe procedure.  For decades, the Board’s response to an inadequate explanation was to vacate and remand to the examiner for proper examination,[20] request further briefing under 37 C.F.R. § 41.50(a) or (d), or proceed to the merits on first instance.  The Board’s jurisdiction and procedure in such instances is explained in a January 2011 blog post.[21]  But instead, in Lovin’s case, the Board changed the rules “on the fly,” stating that an argument directed to an Examiner’s failure to properly explain a rejection (in fact, silence as to the pertinence of the references) was “tantamount” to no argument at all.[22]

The Federal Circuit panel decision held that the Board’s “interpretation” of the appeal rules was entitled to deference under Auer v. Robbins, 519 U.S. 452, 461 (1997) (Auer deference is similar to Chevron deference—Chevron applies to agency interpretations of statutes, Auer applies to interpretations of regulations).  Once the panel affirmed the interpretation of the appeal rule, the Board also affirmed the Board’s rejection—even though neither the last Office Action nor the Board had ever articulated any basis for the rejection.  (Even the Examiner’s Answer had breached the applicable rules stated in MPEP § 1207.02(A)(9) and (10).)

Lovin’s petition for rehearing and two amici briefs — Regulatory Checkbook Amicus and CFPH Amicus — challenged several aspects of the Board’s and Federal Circuit panel’s decisions:

  • The appeal rules are unambiguous, at least in any respect relevant to the Board’s interpretation.  The existence of an ambiguity is an issue of law reviewable by the court de novo.[23]  If the appeal rules are unambiguous, then the Board’s interpretation is not entitled to deference.[24]
  • The interpretation advanced by the Board is not within the range of interpretations supportable by the text of the USPTO’s own appeal rules.  An interpretation that is not a “reasonable” interpretation of the plain wording of a regulation is not entitled to deference [25] —indeed, it must be set aside.
  • A rule that changes rights and obligations cannot be promulgated by “interpretation,” it requires statutory rule making procedure.[26]  Congress went even further, to clarify that the USPTO cannot promulgate rules through common law “interpretation,” the USPTO must use rule making procedure.  35 U.S.C. § 2(b)(2).  Review for “without observance of procedure” under § 706(2)(C) is nondeferential.
  • The interpretation advanced by the Board is not “reasonable,” because it compels appellants to read the Examiner’s mind and respond to that speculative position.
  • The interpretation advanced by the Board is incompatible with 5 U.S.C. § 555(e), as well as the Supreme Court’s basic holding on agency decision making, Motor Vehicle Mfr’s Ass’n v. State Farm Mut. Ins. Co., 463 U.S. 29, 43, 52 (1983), both of which require agencies to “articulate … a rational connection between the facts found and the choice made” on an all material issues.  An “interpretation” of a rule that abrogates a statute and basic principle of administrative law is “contrary to law” and invalid, not “reasonable” and eligible for deference.[27]
  • The interpretation advanced by the Board abrogates decades of Federal Circuit precedent, placing the burden of proof and obligation to state a prima facie case on the USPTO.[28]  A rule interpretation that is “contrary to law” is not entitled to deference.  Rather, rules that are “contrary to law” are illegal and are to be set aside under 5 U.S.C. § 706(2)(A).  Review under the “contrary to law” prong of § 706(2)(A) is de novo, and no question of deference arises.  The Federal Circuit panel erred in considering questions of deference—which are only applicable in the context of “arbitrary and capricious” review—in deciding a case to be decided under the “contrary to law” review statute.
  • The Board cannot change its rules “on the fly” without complying with the APA, RFA, and PRA.  Rule changes “without observance of procedure” are to be set aside under 5 U.S.C. § 706(2)(D).  Review under 5 U.S.C. § 706(2)(D) is “strict,” with no deference.[30]
  • Interestingly, the amicus brief of Regulatory Checkbook  notes that the USPTO neglected its obligations under the PRA, and continued to ignore those obligations for years after the Executive Office of the President had begun to penalize the USPTO for its pattern of breach.  Regulatory Checkbook’s brief draws the court’s attention to 44 U.S.C. § 3512 and 5 C.F.R. § 1320.6(c), which provide that for appeals whose briefs were filed before December 22, 2009, an appellant is entitled to adduce any new argument to the Board or to a court “at any time,” and “in any … reasonable manner.”  Thus, while normal circumstances might permit the Board or Federal Circuit to treat some arguments as waived, by statute, they must now consider all such arguments.

Lovin presents the Federal Circuit with an opportunity to rein in the USPTO’s practice of skirting statutory requirements for changing its rules.  The Federal Circuit should grant Lovin’s petition for rehearing en banc, and should give the USPTO what it asked for in Zurko—the USPTO is an “agency,” and is subject to both the powers and the obligations that that implies.  Put differently, the USPTO can’t “have it both ways.”

 


[2] In re Lovin, http://www.cafc.uscourts.gov/images/stories/opinions-orders/10-1499.pdf, 652 F.3d 1349, 99 USPQ2d 1373 (Fed. Cir. Jul. 22, 2011).

[3] In re Zurko, 142 F.3d 1447, 1449-50, 46 USPQ2d 1691, 1693-94 (Fed. Cir. 1998).

[4] Dickinson v. Zurko, 527 U.S. 150, 50 USPQ2d 1930 (1999).

[5] http://www.reginfo.gov/public/do/DownloadDocument?documentID=57744&version=1  (a consensus estimate generated by a committee of patent attorneys estimated costs to the public of the five rules at $20 to $30 billion per year), in contrast PTO’s estimated costs at $4.1 million http://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=200512-0651-002#section0_anchor

[6] Tafas v. Dudas, 541 F.Supp.2d 805, 86 USPQ2d 1623 (E.D. Va. 2008), criticized Tafas v. Doll, 559 F.3d 1345, 90 USPQ2d 1129 (Fed. Cir. 2009), panel opinion vacated to reinstate district court decision, 328 Fed. Appx. 658, 91 USPQ2d 1153 (unpublished), district court reinstated sub nom. Tafas v. Kappos, 586 F.3d 1369, 92 USPQ2d 1693 (Fed. Cir. 2009).

[8] Patent and Trademark Office, Rules of Practice Before the Board of Patent Appeals and Interferences in Ex Parte Appeals; Delay of Effective and Applicability Dates, Final rule; delay of effective and applicability dates, 73 Fed. Reg. 74972, http://www.gpo.gov/fdsys/pkg/FR-2008-12-10/pdf/E8-29297.pdf (Dec. 10, 2008).

[10] John Love, Deputy Commissioner for Patent Examination Policy, Memorandum to Patent Examining Corps, Changes to Restriction Form Paragraphs, http://www.uspto.gov/web/offices/pac/dapp/opla/documents/20070425_restriction.pdf (Apr. 25, 2007)

[11] Executive Office of the President, Final Bulletin for Agency Good Guidance Practices, OMB Memorandum M-07-07, http://www.whitehouse.gov/omb/memoranda/fy2007/m07-07.pdf (Jan. 18, 2007), 72 Fed. Reg. 3432 (Jan. 25, 2007).

[12]  MPEP, Foreword, “Orders and Notices, or portions thereof, relating to the examiners’ duties and functions which have been omitted or not incorporated in the text may be considered obsolete.”

[13] Ex parte Marion, Appeal No. 2007-1471, http://des.uspto.gov/Foia/ReterivePdf?system=BPAI&flNm=fd2007147108-07-2007-0 at 2, 2007 WL 2254317 at *1 (BPAI Aug. 7, 2007).

[14] Rules of Practice Before the Board of Patent Appeals and Interferences in Ex Parte Appeals, Final Rule, 73 Fed. Reg. 32938 (Dec. 10, 2008), proposed Rules 41.37(o)(2) and 41.41(g).

[15] Executive Office of the President, Office of Management and Budget, Notice of Action, http://www.reginfo.gov/public/do/DownloadNOA?requestID=216727 (Dec. 22, 2009) (authorizing PTO to enforce only the 2004 appeal rules).

[16] Compare Ex parte Borden, Appeal No. 2008-004312, http://www.uspto.gov/ip/boards/bpai/decisions/inform/fd08004312.pdf, 93 USPQ2d 1473, 1474–75 (BPAI Jan 7, 2010) to Notice of Action in footnote 17.

[17] Cf. Precision Specialty Metals v. U.S., 315 F.3d 1346 (Fed. Cir. 2003) (affirming sanctions when a lawyer replaced key language from a quotation with ellipses).

[18] For a particularly troubling rewriting of § 41.41 based on Borden, see In re Coffin, Appeal No. 2010-006475, http://des.uspto.gov/Foia/ReterivePdf?system=BPAI&flNm=fd2010006475-08-03-2011-1 at 4, 2011 WL 3414504 at *2 (BPAI Aug. 4, 2011) (“Under regulations governing appeals to the Board, any new argument (or evidence) not timely presented in the Appeal Brief will not be considered when filed in a Reply Brief, absent a showing of good cause explaining why the argument (or evidence) could not have been presented in the Appeal Brief.”).

[19] Ex parte Dutton, 2010 WL 3803762 at *3 (BPAI Sep. 10, 2010) (unpublished) (“Dutton complains that the Examiner failed to follow guidelines set out in the Manual of Patent Examining Procedure (‘MPEP’). The MPEP, however, provides guidance for Examiners: … Failure to comply with guidance is not per se appealable to the Board, as the jurisdiction of the Board is limited to review of rejections. Relief regarding the conduct of the examination must be sought via the supervisory chain of authority over the Examiner.”); Ex parte Hottovy, 2009 WL 798882 at *11 (BPAI Mar. 24, 2009) (unpublished) (“As a first matter, we note Appellants take issue with the manner in which the Examiner has conducted the examination [for obviousness]. … Appellants should address their concerns in a petition to the Director of the USPTO under 37 C.F.R. § 1.181. … The Director, rather than the Board, has supervisory authority over Examiners.”); Ex parte Global Patent Holdings, 2006 WL 3824921 at *5 (BPAI Apr. 5, 2006) (unpublished) (“questions regarding the conduct of an examiner are petitionable rather than appealable.”).

[20] Ex parte Miles, 2004 WL 318773 at *2–*4 (Dec. 31, 2008) (vacating, requesting that the examiner “provide a fact-based reasoned analysis”); Ex parte Shuping, 2008 WL 336222 at *6 (BPAI Feb. 5, 2008) (remanding without decision because examiner omitted mention of specific claim limitations); Ex parte Govindan, 2002 WL 32334569 at *5 (BPAI Nov. 15, 2002) (unpublished) (“[W]e find that the incomplete, inconsistent analysis of the claims, and the inaccurate analysis of the prior art, preclude meaningful review. Accordingly, we vacate the rejection of record and remand the case to the examiner”).

To be sure, an examiner’s silence is not appealable per se as a free-standing issue.   In Lovin’s case, the relevant point is that examiner silence is a sufficient “error” or “contention” to meet Bd.R. 41.37.

[22] The Board cited 37 C.F.R. § 41.37(c)(1)(vii), “A statement which merely points out what a claim recites will not be considered an argument for separate patentability of the claim” and required that an Appeal Brief make a “substantive” showing of affirmative patentability.

[23]  Humanoids Group v. Rogan, 375 F.3d 301, 305 (4th Cir. 2004) (“Of course, determining whether a regulation or statute is ambiguous presents a legal question, which we determine de novo.”).

[24] Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450, 452 (2002) (statute had no ambiguity that would permit Social Security Administration to assign beneficiaries of one company’s benefit plan to a successor company); Hyatt v. Dudas, 551 F.3d 1307, 1312–13, 89 USPQ2d 1465, 1468–69 (Fed. Cir. 2008) (holding that the term “ground of rejection” is unambiguous, and inconsistent with the PTO’s interpretation).

[25] Christensen v. Harris Co., 529 U.S. 576, 588 (2000) (“But Auer deference is warranted only when the language of the regulation is ambiguous.  …  To defer to the agency’s position would be to permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation.  Because the regulation is not ambiguous on the issue of compelled compensatory time, Auer deference is unwarranted.”).

[26] Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979) (any rule that “affect[s] individual rights and obligations” cannot be promulgated as an “interpretative” rule).

[27] Chrysler Corp. v. Brown, 441 U.S. 281, 303 (1979) (any regulation promulgated “must conform with any procedural requirements imposed by Congress. … agency discretion is limited not only by substantive, statutory grants of authority, but also by the procedural requirements which ‘assure fairness and mature consideration of rules of general application.’”).

[28] E.g., In re Oetiker, 977 F.2d 1443, 1449, 24 USPQ2d 1443, 1447 (Fed. Cir. 1992) (Plager, J., concurring, citations omitted) (“The examiner cannot sit mum, leaving the applicant to shoot arrows into the dark hoping to somehow hit a secret objection harbored by the examiner.  The ‘prima facie case’ notion … seemingly was intended to leave no doubt among examiners that they must state clearly and specifically any objections (the prima facie case) to patentability, and give the applicant fair opportunity to meet those objections with evidence and argument. To that extent the concept serves to level the playing field and reduces the likelihood of administrative arbitrariness.”).

[29] Vitarelli v. Seaton, 359 U.S. 535, 546–47 (1959) (Frankfurter, J., concurring) (“procedure must be scrupulously observed.”).

The Author

Sue D. Nym

Sue D. Nym  

As you have probably guessed, Sue D. Nym is not a real person. Occasionally we receive an article and the author wishes to remain anonymous. All such anonymous posts, whether contributed by a man or a woman, are attributed to Ms. Nym.

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 and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 17 Comments comments.

  1. step back October 20, 2011 3:22 pm

    Hi there Sue,

    nice pseudo-name BTW

    The link up top to the petition appears to be broken

    Also, what about In re Frye (BPAI 2010)? Isn’t that binding on the Board?

    **Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI Feb. 20, 2010) (precedential)

  2. David Boundy October 20, 2011 8:38 pm

    General rule (not always true, but a good rule of thumb) —

    An agency can bind itself at the drop of a hat. Rules by which an agency head can bind his employees arise under 5 U.S.C. § 301, the “Housekeeping Act,” one of the first statutes Congress passed in 1789. All the agency head has to do is say so. So, Frye, issued as an order by the Director, Deputy Director, and Chief APJ to bind agency employees, is indeed binding against the agency.

    However, when an agency wants to bind anyone else, the agency has to observe the statutes and other law that govern rulemaking. The main ones there are the Administrative Procedure Act, especially 5 U.S.C. §§ 552 and 553, the Paperwork Reduction Act, 44 U.S.C. § 3501 et seq and its implementing regulations in 5 C.F.R. §§ 1320.6, ,8, .10, .11, and .12, the Regulatory Flexibility Act, 5 U.S.C. § 601, the Information Quality Act, and Executive Order 12,866.

    To take one example, the Federal Circuit has noted the asymmetry effect of the MPEP in a number of decisions–the MPEP is issued under the Housekeeping Act, and is sufficient to bind agency employees, but the PTO has never observed the requirements for rule making against the public with respect for the MPEP, and thus the MPEP is binding against the PTO, not against the public.. For example, Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1425, 7 USPQ2d 1152, 1154 (Fed. Cir. 1988) (“The MPEP states that it is a reference work on patent practices and procedures and does not have the force of law, but it ‘has been held to describe procedures on which the public can rely.’”); Patlex v. Mossinghoff, 758 F.2d 594, 606, 225 USPQ 243, 252 (Fed. Cir. 1985) (“The PTO operates in accordance with detailed rules and regulations, including those set out in the Manual of Patent Examining Procedure (MPEP) which is made available to the public and which has been held to describe procedures on which the public can rely.”)

    The rule that the Board announced in Lovin’s case is a “rule” governed by the second group of laws. The PTO ignored the law in Lovin’s case, and this article points out that that’s apparently a result of habit, not accident.

  3. Gene Quinn October 21, 2011 11:08 am

    Links should be fixed in the articles now. Sorry for the problems.

    -Gene

  4. Anon October 21, 2011 11:33 am

    Mr. Boundy,

    What, then, do you make of the Agency’s habit when putting forth changes to the MPEP to also planinly state that the MPEP is merely a guide and that its own employees are not necessarily bound by that guide (and thus, applicants do not have any recourse to make the examiners obey the guidance)?

    It would seem that such statements are in direct conflict with what you have posted.

    Personally, I do not rely on the MPEP to enforce any examiner action for this reason. It would be beneficial to be able to, but to me, such is simply not a “real” option.

  5. AAA JJ October 21, 2011 11:41 am

    In re Lovin is a travesty. Of course, if the examiner fails to address dependent claims, or any claims, or any claim elements/features/limitations, it’s better to note that first thing instead of waiting for the reply brief. It’s also better to simply state that the examiner doesn’t address them rather than arguing that the reference doesn’t disclose/suggest them. The average APJ is likely to regard the latter argument as “unpersuasive” rather than get off their lazy butt to see if the examiner did in fact address them. The “affirm at all costs” mindset of the average lifer APJ, and some of the truly horrendously unqualified newbie hacks they’ve hired in the past two years, has to be challenged very directly if you expect to get justice. They love to fall back on the “silence equals assent” argument (especially that one truly disgracefully incompetent lifer hack, you know who I mean) when dealing with applicants, but never use it on the examiners.

  6. David Boundy October 21, 2011 12:59 pm

    Anon #4 exactly the point. Lovin arises out of PTO habit of refusing to follow the law, and applicants’ failure to hold the PTO to its half of the bargain and to its legal obligations. Lovin is one small step forward, asking the courts to enforce the law.

  7. step back October 21, 2011 2:12 pm

    MPEP is merely a guide and that its own employees are not necessarily bound by that guide (and thus, applicants do not have any recourse to make the examiners obey the guidance)?

    Anon @#4,

    Be careful what you wish for.
    Many things in the law are double edged swords.

    The MPEP is a massive tome with many badly worded and sometimes just plain wrong sections. You really do not want the examiner to always, absolutely always, be bound to how he reads the MPEP for every case and every issue.

    Even the courts sometimes badly mangle the way they express a concept. Consider for example how they define “analogous” art. It is contrary to section 103 (“Patentability shall not be negatived by the manner in which the invention was made.”). But that doesn’t stop the courts from repeatedly doing it.

  8. Anon October 21, 2011 3:33 pm

    Thanks step back,

    You are, of course, correct. But I think Mr. Boundy should be correct (in an ideal world). Of course, in that ideal world (since the Office is prohibited from Rule Making that affects substantive rights), the contents of the MPEP not only would be different, not only would be promulgated with greater care, but might (just might) actually be useful for speeding prosecution by setting up a “legitimate” (i.e. effective) system of patent prosecution, and minimizing arbitrary Agency actions.

  9. step back October 21, 2011 3:52 pm

    Anon @#8:

    Administrative agency law is something that all patent prosecution attorneys/agents should study. Alas they don’t.

    So here is a quick tip for keeping our jargon straight.

    “Rules” that are “promulgated” by an administrative agency (i.e. the USPTO) need to be published in the Federal Register (i.e. 37 CFR).

    The MPEP is not published in the CFR and it is not part of agency “rule making”. It is sort of an attempt to skirt around the Administrative Procedure Act (APA) in cases where the PTO asserts the MPEP as against an applicant.

  10. Anon October 21, 2011 6:59 pm

    Step back,

    Yes, you are correct again and I am perhaps a little too loose with my jargon.

    However, “It is sort of an attempt to skirt around the Administrative Procedure Act (APA)

    It is or it is not. It cannot be both. And likewise, if there is anything in the MPEP above and beyond the CFR, than that would be impermissible rule making. My comment above concerning relying on the Office following its own MPEP has to do with the Office statements that its text in the MPEP that an applicant cannot rely on what is there causes enough doubt in my clients’ eyes that they want me to work at the law or rule level and not fight the admin level.

  11. step back October 21, 2011 7:27 pm

    At the end of the day, if you can work things out with the examiner at minimum cost to your client and still get good broad claims through, then who cares about the technicalities as to whether the MPEP has any force of law or not (i.e. agency interpretation of arguably ambiguous statutory or case law)?

    Then again, wait until AIA 2011 hits the fan and then we’ll all have a real field day wiping the stuff off the walls.

  12. David Boundy October 24, 2011 10:12 am

    Anon, step back: A small refinement.

    “Rule” is an extremely broad term, it covers everything we’ve discussed. 5 U.S.C. §§ 551(4) and Batterton v. Marshall, 648 F.2d 694, 700–01 (D.C. Cir. 1980). “Rule” is the generic term, “regualtions” and “guidance” are two subcategories relevant today.

    37 C.F.R. has “regulations” that are bilaterally binding against both applicants and the PTO. For an agency to bind the public, the agency must follow the laws set forth in the Administrative Procedure Act (especially 5 U.S.C. § 553), the Paperwork Reduction Act (44 U.S.C. § 3501 et seq), the Regulatory Flexibility Act (5 U.S.C. § 601 et seq.), Executive Order 12,866, etc.

    The MPEP is “guidance” that ONLY binds the PTO, and that only to the extent that it helps applicants by setting procedural minima (with a few exceptions, to discuss another day). Guidance is issued under 5 U.S.C. § 301 and 35 U.S.C. § 2 and 3. A good summary of what agencies can and cannot do by guidance is set forth by the Executive Office of the President, in the Final Bulletin for Agency Good Guidance Practices, OMB Memorandum M-07-07, http://www.whitehouse.gov/omb/memoranda/fy2007/m07-07.pdf (Jan. 18, 2007), 72 Fed. Reg. 3432 (Jan. 25, 2007). Guidance is binding against the agency, but ONLY against the agency.

  13. step back October 24, 2011 2:36 pm

    David,

    Thank you for the private email and also the additional notes about promulgated regulations (37 CFR) as opposed to MPEP and other “guidances”.

    I think that for most practitioners in this economy, the questions are purely academic because, if indeed you are going to appeal to the BPAI, your client needs to be able to afford the escalating costs, including the costs of getting your “substantial evidence” into the record before you file your notice of appeal.

    Personally, I find it hard enough to get the examiner to understand the technology and the claim language, let alone to worry about what will happen on appeal. When interviewing with an examiner, I always keep an open mind because –sometimes, amazingly enough– the examiner (or his/her SPE) is right. And if you get to see that, you avoid the entire issue of appeal and whether the PTO is playing by the rules.

  14. Anon October 25, 2011 7:00 am

    Step back and David,

    Care to share those email thoughts? I do find this area of MPEP binding interesting, especially when the agency says the MPEP is not binding. Is this a per se creation of a new level of guidance that seeks to subvert the APA?

    On the one hand, step back is correct that there are ways to mitigate costs for the client (even though I think it goes without saying that an open mind is always useful – this is a predicate position for any good advocate).

    But on the other hand, I have a large degree of respect for those who are willing to fight the agency when it overreaches its authority and wrongfully denies a person their rights. Where would we be without the likes of Dr. Tafas (and in no small part, Mr. Boundy), if people always sought the easy (low cost) way out?

  15. David Boundy October 25, 2011 8:05 am

    Anon #14: The off-line emails had no more substance than you see above, just getting-to-know-you. Contact me (I’m easy to find), I can send you some materials.

    The reason that the PTO says that the MPEP is not binding is that the PTO’s Office of Patent Examination Policy (the group that runs rule making, edits MPEP, and Petitions Office) does not even have a nodding acquaintance with the administrative law, and even less respect. A post for another day.

  16. step back October 25, 2011 3:25 pm

    Anon @ #14:

    I’m afraid that too much focus on this administrative agency law aspect will get people who read this blog to start putting their energies into the wrong egg basket. A little knowledge is always dangerous.

    The only thing you need to remember is that their is a hierarchy of laws and rules:
    1. The US Constitution trumps all others
    2. Federal statute (35 USC xx; and yes 5 USC 706) trumps promulgated agency “rules”
    3. Properly promulgated agency rules (37 CFR) trump informal guidances
    4. The MPEP is NOT the US Constitution, a Federal statute, or a Properly promulgated agency rule

    With that said, if you can use what is said in the MPEP to your advantage so that you cut down time spent negotiating with the examiner and getting good claim scope for your client, then let it be so.

    On the other hand, if the examiner is misreading an MPEP section or making requirements he or she has no right to, where those requirements hurt your client, then it might be time to point out to the examiner that the MPEP is not gospel, but rather merely an internal document of the PTO, If the examiner does not want to listen, you might want to place a phone call to the SPE. If that doesn’t work, you might want to place a phone call to the Group Director. You also may want to become familiar with the Petitions sections of the MPEP (who to petition to and for what purposes)

    May the force of due process be with you (–attributed to a Jedi patent attorney)