Apr 09, 2009

Court Provisionally Upholds Three Proposed PTO Rules

A three judge panel of the U.S. Court of Appeals for the Federal Circuit has issued a decision that provisionally upholds three of the four rules recently promulgated by the U.S. Patent and Trademark Office (“PTO”). The PTO’s proposed rule changes would add additional burdensome requirements on patent applicants during the prosecution process.

In its decision, the Court overturned a lower court’s finding that the PTO had exceeded its authority in promulgating the rules. While the Court upheld three of the rules, the Court did strike down one of the rules as contrary to the U.S. Patent Act. The Court also declined to consider other arguments against the three upheld rules, instead remanding the case back to the lower court for further proceedings. In effect, the Court upheld the authority of the PTO to promulgate certain rules, but sent the case back to the lower court to determine whether the rules are proper. The PTO has announced that it will not implement any of the new rules at this time.

The rules in question are:

Rule 78 (Continuation Applications) – Struck Down

Proposed Rule 78 attempts to limit the number of continuation applications that an applicant can file in a single patent family. A continuation application is a later filed application that is based on and claims priority from a prior filed application. Rule 78 is an attempt by the PTO to limit the number of patent applications an applicant can file on a single family of inventions, continuation applications being a common method for an applicant to protect various aspects of an invention using separate patents. The Court struck down this Rule 78 as contrary to the express language of the U.S. Patent Act. However, one judge indicated that a revised Rule 78 limiting the number of serial continuation applications might be upheld.

Rule 114 (Requests for Continued Examinations) – Upheld

Proposed Rule 114 limits an applicant to the filing of only a single request for continued examination (“RCE”) in a patent family as a matter of right. An RCE is a request that the PTO continue to examine a pending patent application after the pending patent application has been finally rejected, based on amendments to the patent claims. Rule 114 permits second and subsequent RCEs only if the applicant files a petition with the PTO and makes a showing as to why the information submitted in the RCE could not have been submitted in the original patent application. Rule 114 is an attempt by the PTO to limit length of time a patent application can be pending and to limit the number of examinations that can be conducted on a single invention.

However, because Rule 78 regarding continuation applications was struck down, an applicant may be able to avoid the effects of Rule 114 by filing continuation applications in lieu of second or subsequent RCEs. Thus, unless Rule 78 is amended to limit the number of serial continuation applications, the effect of the upholding of Rule 114 is likely minimal.

Rules 75 and 265 (Claims and Examination Support Documents) – Upheld

Acting together, proposed Rules 75 and 265 limit the number of patent claims that an applicant can file in a single patent application without performing a prior art search and documenting his or her findings in the newly developed and highly burdensome Examination Support Document (“ESD”). To avoid the ESD requirement, a patent application must contain no more than five (5) independent claims and twenty-five (25) total claims. Furthermore, all claims in co-pending applications that are for essentially the same invention are aggregated together for purposes of counting the total number of claims. Rules 75 and 265 are an attempt by the PTO to limit the number of claims for a particular invention. While this may have little effect on many inventors and on many standalone inventions, for complex inventions and inventions with several embodiments, these rules could prevent an applicant from patenting all aspects of the invention or from doing so without satisfying the ESD requirements.


The lower court now will review the rules to see if they satisfy other legal requirements. If the courts ultimately uphold the rules, many patent applicants will find it more burdensome and difficult to obtain a patent. However, there are several issues that the courts must decide before any of the provisionally upheld rules will come into effect. For example, among other things, the lower court must consider whether the proposed rules are arbitrary and capricious, impermissible vague, and/or conflict with the U.S. Patent Act in ways not specifically addressed by the upper court. It also is unclear if the PTO under the new Obama Administration will aggressively defend the proposed rules. As such, patent applicants should continue to monitor the situation and be prepared to comply with the new rules if and when they come into effect.

For more information on this decision, please contact a member of SGR’s Intellectual Property Group.

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