In August 2007, we reported that the United States Patent and Trademark Office (USPTO) had adopted new rules of practice which, in some instances, would significantly change the way patent applications are prepared, filed, and prosecuted in the U.S. The new rules were to take effect on November 1, 2007 and were to primarily affect continuation practice (the right to file subsequent applications claiming priority on a parent application), the total number of claims examined and the relationship between cases. The rules were labelled “Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications”, and were published on August 21, 2007.

On October 31, 2007, hours before the new rules were set to take effect, Judge James Cacheris of the United States District Court for the Eastern District Court of Virginia, in a ruling from the bench, issued a preliminary injunction to block implementation of the USPTO rule changes until further hearings on the merits of the suits filed by GlaxoSmithKline and others could be scheduled. The preliminary injunction was issued following a hearing of the consolidated complaints lodged by Dr. Triantafyllos Tafas and SmithKline Beecham Corporation (doing business as GlaxoSmithKline (GSK)).

GSK contended that the new rules are vague, arbitrary and capricious, and prevent GSK from fully prosecuting patent applications and obtaining patents on one or more of its inventions. Dr. Tafas also alleged that the USPTO’s promulgation of the new Rules would cause him harm. The American Intellectual Property Law Association (AIPLA), the Biotechnology Industry Organization (BIO) and several corporations, including IBM, Elan Pharmaceuticals, the Roskamp Institute, Tikvah Therapeutics, and Hexas, LLP, filed amicus curiae briefs supporting GSK’s and Dr. Tafas’ challenge. New York Senator Charles Schumer also criticized the rules in a letter to USPTO Director Jon W. Dudas in late October.

The USPTO says the streamlining of the application process is needed to help it clear the backlog of applications it has to deal with, as well as to encourage applicants to be clearer about what they are trying to protect.

Judge Cacheris issued a written order and a 39-page opinion explaining his decision. The order states that the injunction prohibits the USPTO from implementing the rules or “issuing new regulations restricting the number of continuing applications, the number of requests for continued examination, and the number of claims that may be filed with the USPTO.” Judge Cacheris ruled that the plaintiffs showed (1) likelihood of success on the merits, (2) irreparable harm, (3) a tilt of the balance of hardships in their favour, and (4) a public interest in preserving the status quo while the litigation proceeds.

The USPTO has therefore suspended the new rules indefinitely. Hence, USPTO employees are to continue processing and examining patent applications under the rules and procedures in effect prior to publication of the new rules of practice.

The injunction will expire on entry of a final judgment in the ongoing lawsuits unless the USPTO withdraws the rules completely or appeals the injunction decision, both courses of action being unlikely according to most observers. The injunction should therefore be in effect for some months.

We will continue to closely monitor the status of the relevant complaints and provide timely updates.