On April 1, the U.S. District Court for the Eastern District of Virginia struck down controversial continuation and claims rules that the U.S. Patent and Trademark Office (PTO) first published in 2006. PTO had scheduled the rules to take effect on November 1, 2007. At that time, however, the same court preliminarily enjoined the rules from taking effect while it considered their legality.

James J. Foster, a shareholder and litigator at Wolf, Greenfield & Sacks PC (Boston), says PTO had drafted the new rules to speed up the patent examination process. “The new rules limited the number of continuing applications that an applicant could file and the number of claims that an applicant could pursue as a matter of right,” he says. “The old system did not limit either. The new rules also, in some circumstances, required the applicant to conduct a prior art search and explain the prior art. The old system had no such requirement.”

In its decision, the court held that PTO does not have the statutory authority to make the new rules because such rules would have a substantive impact on applicants' rights, Foster notes. PTO's authority is currently limited to enacting procedural rules.

Les Bookoff, a partner at Finnegan, Henderson, Farabow, Garrett & Dunner LLP (Washington, DC), says that PTO rules limiting continuation applications could reduce the ability of medical device companies to obtain commercially significant patent coverage for their inventions. “For example, in contrast to some other industries, time-consuming R&D and regulatory approval may follow invention and precede commercialization,” he says. “Yet, a medical device company may use up its available opportunities for patent coverage prior to understanding the commercially significant aspects of its invention. This could lead to copying of the company's products—without recourse through the patent system.”

As such, the permanent injunction came as a relief to many medtech companies that were preparing revised patenting strategies in light of the rule changes. But such relief may be fleeting, as PTO still has several options left in pursuing its desired patent rule changes.

Courtenay Brinckerhoff, an IP partner at Foley & Lardner (Washington, DC), says PTO has 60 days from the final decision to file an appeal in the U.S. Court of Appeals for the Federal Circuit. “If the appeal follows a normal schedule, it could take up to a year or longer for the court to render a decision,” she says.

Bookoff says PTO could also seek to work around the court's decision by proposing different, less-substantive rules that may accomplish similar results. “Or, PTO could attempt to use current rules to accomplish its goals,” he says. “For example, some of the proposed rules sought to have patent applicants identify certain related patent applications during prosecution. PTO could use its current rules to request that information from applicants.”

In any case, the outcome of a PTO appeal or work-around attempt could be incidental if Congress chooses to intervene and grant the office the needed authority to move forward with its proposed rules.

“The U.S. Congress is currently considering specific patent reform legislation,” Foster says. “The version that passed the House would amend the patent statute to grant the Patent Office the authority to promulgate such rules. If similar legislation passes the Senate, and the president signs it into law, the court may permit the Patent Office to restore these rules, but only after a further notice and comment period.”

Brinckerhoff adds, “Predicting when or even whether Congress will take final action on the Patent Reform Act is more difficult than predicting the weather forecast for an April day in Washington, DC. While the Patent Office is strongly behind these provisions, patent bar organizations are lobbying heavily against them because of the increased burdens they would place on applicants.”

Other provisions of the Patent Reform Act have divided industry groups along technology lines, with biotechnology and pharmaceutical groups falling on one side, and computer groups falling on the other, Brinckerhoff says. She notes that medical device companies—depending on the provisions being discussed—currently fall on both sides of the debate.

Certain patent reform provisions have also been opposed by Chief Judge Paul Michel of the U.S. Court of Appeals for the Federal Circuit, Brinckerhoff notes. “Unless and until these groups find a compromise, Congress is not likely to take sides and risk alienating important constituents,” she says.

© 2008 Canon Communications LLC

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