Patent Baristas

In the the Tafas v. Kappos lawsuit, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office David Kappos and the U.S. Patent and Trademark Office filed a joint motion for dismissal of the appeal and to vacate the judgment of the district court below because the USPTO has rescinded the rules that formed the basis of the litigation.  The Federal Circuit agreed that the appeal is now moot and dismissal of the appeal is not only appropriate, but required.

Under Secretary Kappos officially rescinded the highly hated regulations (Final Rules; 72 Federal Register 161 at 46716)that would have limited patented claims and continuations — with an emphasis on the fact that they were proposed by the previous administration. The regulations were published in the Federal Register in August 2007, but were enjoined and never came into effect.

Earlier, the Federal Circuit issued its 55 page decision in Tafas v. Doll holding that aside from the rule limiting continuations, the other rule changes were procedural in nature and the PTO does have the rule-making authority to implement the rules limiting the number of claims in each application, providing for Requests for Continued Examination (RCEs) and requiring Examination Support Documents (ESDs).

Then, an eleven member en banc panel has voted to rehear the case en banc. Tafas v. Doll, 2008-1352 (Fed. Cir. 2009)(Order, per curiam). Now, however, the U.S. Court of Appeals for the Federal Circuit has granted the joint motion for dismissal of the appeal but denied the joint motion for vacatur of the district court’s judgment.  Tafas v. Kappos (08-1352).

The Federal Circuit said that vacating the district court’s judgment is inappropriate under the circumstances since the Supreme Court held that when a party procures the conditions that lead to a case becoming moot, that party should not be able to obtain an order vacating the lower court decision that was adverse to that party. Vacating would only appropriate if the mootness arises from external causes over which the parties have no control, or from the unilateral act of the prevailing party, but not when the mootness is due to a voluntary act by the losing party, such as a settlement. See U.S. Bancorp Mortgage Co., 513 U.S. at 25.

The motion seeks to paint this case as falling into the former category, but it appears to us to fall squarely into the latter. This is not a case in which the regulations have been overridden by a statutory change; instead, it is a case in which the agency itself has voluntarily withdrawn the regulations and thus set the stage for a declaration of mootness. The motion’s statement that an intervening regulatory change is directly analogous to an intervening statutory change is not persuasive. The agency does not control Congress; but it does control the decision to rescind the regulations. Thus, it was the USPTO (the losing party in the district court action) that acted unilaterally to render the case moot, and vacatur is not appropriate.

Therefore, the USPTO is now required to use notice and comment and must observe procedures of the Regulatory Flexibility Act for all rule making.

Now, the USPTO is required to use notice and comment and must observe procedures of the Regulatory Flexibility Act for all rule making.  The Federal Circuit’s decision does not address the fact noted in Tafas’ papers that Office of Management and Budget (OMB) had essentially killed the rules anyway but that’s another matter.

See the whole opinion here.