Patent Baristas

On August 21, 2007, the USPTO published its final rules limiting continuation practice (72 Federal Register 161 at 46716, “Rules and Regulations Changes To Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent applications; Final Rule”).

USPTO’s assertion of statutory authorization would appear to be insufficient in this case

The question remains whether the USPTO has exceeded its statutory authorization.. The most relevant case on USPTO rule making power under the APA (5 U.S.C. § 500 et seq.) is Animal Legal Defense Fund v. Quigg, (932 F.2d 920 (Fed. Cir. 1991)) upholding the right of the USPTO under 5 U.S.C. § 553 to consider animals as patentable subject matter.

Central to the Federal Circuit’s reasoning in that case was that the USPTO action was merely upholding prior precedent, being consistent both with 35 U.S.C. § 101 and the Supreme Court’s interpretation of that statute in Diamond v. Chakrabarty. (447 US 303 (1980).) In reaching its decision, the court outlined the limits of USPTO rule making authority:

Courts interpreting section 553 generally speak in terms of “substantive” or “legislative” rules requiring notice and comment in contrast to the exempt “interpretative” rules of section 553(b) which do not. []A rule is “substantive” when it “effects a change in existing law or policy” which “affects individual rights and obligations.” see also Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979) (“affecting individuals’ existing rights and obligations”); Gosman, 573 F.2d at 39 (change existing law or policy). To be “substantive”, a rule must also be promulgated pursuant “‘to statutory authority . . . and implement the statute.'” Cubanski v. Heckler, 781 F.2d at 1426; see also Chrysler Corp., 441 U.S. at 302-03. In contrast, a rule which merely clarifies or explains existing law or regulations is “interpretative.” See American Hosp. Ass’n, 834 F.2d at 1045.

Thus, in Animal Legal Defense Fund the court found that substantive rule making authority must be pursuant to statutory authority. Unlike the specific statutory support and Supreme Court precedent in Animal Legal Defense Fund, the present USPTO proposal to restrict Continuations is supported only by its general rule making authority under 35 U.S.C. § 2(b)(2), which states:

(2) [The Office] may establish regulations, not inconsistent with law, which—

(A) shall govern the conduct of proceedings in the Office;

(B) shall be made in accordance with section 553 of title 5.

35 U.S.C. § 2(b)(2) would appear to be insufficient to allow the USPTO to make the substantive changes to Continuation practice.

First, this law is simply support for general rule making authority, not a specific statutory support for substantive rules that dramatically affect an Applicant’s rights. Moreover, the new rules would appear to contradict, not support, prior interpretations of the law, contrary to Animal Defense Fund. The Federal Circuit has affirmed the plain meaning of 35 U.S.C. § 120 and refused to limit an Applicant’s rights under 35 U.S.C. § 120, except in particular cases of abuse. Recent attempts to limit Continuations via amendments to the statutes have not succeeded in Congress.

The fact that such amendments were considered and then withdrawn from later language indicates that the Congressional intent, at present, does not favor limitations on Continuations. The plain meaning of 35 U.S.C. § 120, its construction in comparison to other sections of Title 35, the Congressional record, and the case law, all point to a more generous interpretation of 35 U.S.C. § 120 than may be applied by the USPTO. If so, USPTO limits on Continuation practice might be held to limit its rule making authority under 35 U.S.C. § 2.

See Part 1 here.

See Part 2 here.