Final Rules Overruled: Court Prevents PTO From Limiting The Number of Claims and Continuances

Judge James Cacheris of the Eastern District of Virginia ruled on April 1, 2008 that the United States Patent and Trademark Office (PTO) had overstepped its rulemaking authority in implementing controversial new rules that would have changed the practice of many U.S. companies and inventors. As a result, the Court permanently enjoined the PTO from enforcing what had been dubbed “final rules.”

Existing patent law places no limitations on the current number of claims that may be presented in a patent application or the number of continuations that may be filed based on a given application. As such, it is not unusual for a company to file 50-100 claims. Depending on the PTO’s treatment of the application (or a competitor’s actions in the marketplace), many companies will also file four or more continuations for the application. The final rules would have sharply curtailed these practices, allowing companies only two continuing applications plus a single request for continued examination for each family of applications directed to the same or highly similar inventions. They would have also limited the number of claims in a patent application to a total of five independent claims and 25 total claims in most cases.

The PTO’s attempts at restructuring the application process were criticized by many within the patent bar. They believed the final rules made it much more difficult for practitioners to secure strong patent rights for their clients. The final rules were challenged by GlaxoSmithKline and an independent inventor, Traintafyllos Tafas, on the grounds that they were substantive rather than procedural in nature and would overrule several provisions of the Patent Act. The PTO countered that the rules were procedural in nature, and the PTO was within its rights to implement them as a means to manage its workload.

The Court ruled against the PTO on summary judgment, concluding that the changes were in fact substantive. As substantive changes, the Court believed that the final rules, if implemented, would effectively change current patent law. The PTO has announced that it plans to appeal the Court’s decision. A PDF of the Court’s ruling can be found
here.

“I believe the Court made the correct ruling,” says Boyle Fredrickson attorney Timothy Newholm. “While the PTO’s efforts to reduce backlogs can be appreciated, I believe that imposing such restrictive limitations on securing patents is not the best means to that end.”