In 2007, several changes to the Code of Federal Regulations were finalized following a period of public comment. On August 27, 2007, a fundamental reform to the Patent Office Prosecution Rules was also fi nalized after a very tumultuous period of public comment. This earlier reform was also to take effect on November 1, 2007, with retroactive effect on pending filings. This broad reform was widely criticized by patent professionals from around the country and, as explained below, the new rules have not taken effect. On November 1, 2007, a modest change to the rules of the Trademark Trial and Appeals Board (TTAB) met favorably with trademark attorneys.

Changes to Patent Office Rules

Faced with a growing number of continuation applications and an increasing number of claims in each application, the Patent Office argued that it was crippled under the weight of this work and could not examine newly filed applications promptly. Under the current patent rules, applicants can file an unlimited number of continuation applications, requests for continued examination and claims, as long as statutory restrictions are met and the appropriate fees are paid. Burdens on the Patent Office are currently managed by increasingly large filing fees. The Patent Offi ce has all but abdicated its responsibility to maintain adequate staffing to meet the increasing demand in patents in the United States. The gist of the reform can be boiled down to two issues: (a) limiting prosecution of initial applications, and (b) restricting the number of claims that can be included in patent applications.

Under the proposed Patent Office rules, each initial application can give rise to only two continuation applications or continuation-in-part applications, and only a single request for continued examination is allowed as a matter of right. Further prosecution can proceed only if a “petition and showing” is granted that presents evidence as to why the new prosecution could not have been previously presented. Second, and very importantly, the number of claims in each initial application was limited to five independent claims and a total of twenty-five claims. Claims in excess of the 5-25 rule were allowed only if an onerous examination support document (ESD) was filed alongside the claims guiding the Examiner to the patentability of each additional claim. What is unclear is how strictly the Patent Office would enforce these limitations. The object of the change was to restrict excessive prosecution, and many experts believed that this rule would be strictly enforced.

The Patent Office has authority to enact rules that regulate the procedural aspects of patent protection, but not the authority to modify the substantive rights granted under the Patent Act to patent applicants. By limiting the number of claims and the ability to file continuation applications, the Patent Office effectively overruled parts of the Patent Act that define the scope of patent protection available to applicants. For example, situations can arise where an applicant desires to file a new claim in a pending application, but would be barred simply because the applicant had already included a full set of 25 claims.

Patent applicants fought back, and on October 31, 2007, Judge James C. Cacheris of the District Court for the Eastern District of Virginia granted a Motion for Preliminary Injunction, preventing the new rules from coming into effect on November 1, 2007, as planned. In this Order, the Judge agreed that it was likely that a court would find this reform was more than procedural and would affect the “substantive rights” of applicants. The injunction expires upon entry of a final judgment in the court case. Since that ruling, 44 parties have been allowed to join and fi le Amicus Briefs, and these parties are actively participating in the litigation, in which the parties have filed cross-motions for Summary Judgment. A hearing is scheduled in February 2008. While we do not believe a final judgment is likely to issue in the first half of 2008, the Patent Office is actively litigating this case and has not proposed newly amended rules in an effort to settle this case out of court.

Changes to TTAB Rules

The TTAB has initial jurisdiction over appeals from final rejections of trademark applications, as well as Oppositions and Petitions for Cancellation of registered marks. Because the TTAB is located in the state of Virginia and the proceedings are conducted online, special rules apply for the commencement of proceedings, protective orders, discovery and the entry of evidence.

Opposition and Cancellation proceedings were initiated by the filing of a Petition for Cancellation or Notice of Opposition, along with the payment of a fee. The TTAB had the sole responsibility of service upon the Registrant or Applicant of record. Persons seeking to oppose or petition to cancel a mark must now serve a copy of the Notice of Opposition/Petition for Cancellation on the owners of record on the TARR report, according to 37 C.F.R. § 2.119.

There is no duty placed on petitioners to investigate the current address. If the service copy is returned as undeliverable, the petitioner has 10 days to notify the Board, thus returning the notice obligation to the Board. This change allows the Board, at its own discretion, to concentrate its efforts on the missing participants for marks with a market presence. Petitioners should sua sponte serve adverse parties, when known, to avoid unnecessary delays.

The TTAB previously waived the mandatory initial disclosure Rule 26(a)(1)(A)–(B) of the Federal Rules of Civil Procedure. Mandatory disclosure is now required 30 days after the discovery period commences. Disclosures include the identities of witnesses and the scope of their knowledge. Litigants must also disclose the nature and location of applicable and relevant documents. Trademark Opposition and Cancellation Proceedings have now become more like other district court litigation.

Mandatory disclosures are often irrelevant because an analysis can be conducted from the perspective of the marketplace, not the adverse party’s perspective. For example, most Petitions for Cancellation are grounded on abandonment, descriptiveness or generic marks. Disclosures for these marks is often a waste of time and resources. Under the amended rules, parties can no longer file for Summary Judgment until this initial disclosure has taken place.

Finally, the Board’s standard protective order will be automatically applicable in all cases unless parties stipulate otherwise. Thirty days before the close of discovery, expert testimony disclosure is required, as contemplated by Rule 26(a)(2) of the Federal Rules of Civil Procedure.