IP Update, Vol. 7, No. 3 (21 October 2009)

Editors: Marc S. Weiner, Esq. and Nicholas P. Godici

In this Issue:

USPTO Rescinds Patent Rules proposed by Previous Administration

Director of the U.S. Patent and Trademark Office (USPTO) David Kappos has signed a new Final Rule rescinding controversial proposed regulations pending an en banc review by the U.S. Court of Appeal for the Federal Circuit (CAFC).

The proposed regulations addressed critical patent considerations, including the number of continuation applications permitted and the number of claims in an application, among others.

The proposed regulations were to go into effect on November 1, 2007. However, due to successful opposition by Dr. Tafas and GlaxoSmithKline, the regulations were never adopted. In the fall of 2007, Dr. Tafas and GlaxoSmithKline brought a suit in the U.S. District Court of the Eastern District of Virginia (EDVA) seeking an injunction blocking the rules. The EDVA granted a temporary injunction on October 31, 2007, and permanently enjoined the proposed regulations in April 2008. The USPTO appealed the decision to the CAFC, which ruled in a panel decision in March, 2009, that the proposed regulations were procedural in nature and thus under the USPTO's rulemaking authority, except for the rule limiting the number of continuations. However, in July, 2009, an en banc panel of the CAFC voted to rehear the case en banc and to vacate the prior panel decision.

Once the CAFC dismisses the pending en banc appeal, the only court decision left standing will be the EDVA ruling rejecting the proposed regulations. The EDVA opinion will be persuasive - not binding - in any future litigation over the scope of the USPTO's power under Section 2 of the Patent Act. Also, the fact that the case was decided in the EDVA will likely amplify the effect of the ruling because the EDVA is a likely forum for any future rule challenges. However, the USPTO also announced that it will request the CAFC to dismiss and vacate the EDVA decision. It is not yet known whether the CAFC will grant the USPTO's request.

A press release from the USPTO regarding this matter is here.

Summary provided by George Dolina

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Revised Productivity Metric at the USPTO

Director of the U.S. Patent and Trademark Office (USPTO) David Kappos announced in October 2009 a new system of measuring examiner work productivity. The new system has been approved by the Patent Office Professional Association (POPA) — the examiner's union.

Examiners' work productivity is currently measured through a "count" system. Certain tasks have some number of counts associated with them, and examiners must earn a certain number of counts every two weeks based on their pay grade and art unit. Under current rules one count is awarded when an examiner issues a first office action on the merits, and a second count is awarded when the examiner disposes of the case (allowance or abandonment). No counts are awarded for a second or subsequent office action. When a request for continued examination (RCE) is filed, the case is treated as effectively disposed, and the examiner earns one count. Thus, a single patent application can provide two counts for the examiner. When the RCE is filed, the case is treated as a new case again, and has two counts associated with it again. Thus, the examiner earns the same number of counts for examining a new case as for examining a case that has multiple RCEs filed.

The new system changes the allocation of counts for examiners' actions. It is hoped that the changes will reduce patent pendency by incentivizing compact examination by the examiners.

Under the new system more counts are awarded for a first office action on the merits (1.25 counts), counts are awarded for a final office action on the merits (0.25 counts), and fewer counts are awarded for a disposal of the case (0.5 counts). Thus, a new patent application still has two counts associated with it when first examined by the examiner. However, once an RCE is filed, the case has only 1.75 total counts available for the next round of examination. Every second and subsequent RCE has only 1.5 counts associated with it. Thus, a case that has been prosecuted through one or more RCE's has a diminished count value available for the examiner to earn. This is expected to incentivize the examiners to work toward a fast and permanent disposal of the case — allowance — rather than requiring repeated RCEs to be filed. However, in the future RCEs will be put on the examiner's "continuation" docket not the "amended" docket. This will likely cause a delay in the examination of RCE applications.

Other changes proposed by Mr. Kappos include providing additional examination time for each application, incentivizing examiner initiated interviews, reducing penalties associated with erroneous determination of allowable matter, and revised docket scheduling requirements to examine earliest filed cases before later filed cases.

Details of the new system are described in a document provided by the USPTO at this link.

Summary provided by George Dolina

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