With controversy still enduring after two years, a District Court opinion, a Federal Circuit opinion, and a new Presidential Administration, it appears that the much-ballyhooed proposed patent rule changes may suffer an unlikely death. With the recent confirmation of David Kappos (Kappos) as the new Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO), Kappos will take a fresh look at the issues raised by the proposed rules. Given Kappos' comments and actions related to the controversial rules, it is expected that the rules in their current form will be rescinded.

In a case1 challenging the USPTO's rulemaking authority related to the controversial rule changes to claims standards and the continuation practice (rule case/background), both the private plaintiffs and the USPTO recently asked the Federal Circuit Court of Appeals for a stay of en banc proceedings before the Court. The joint motion stated that a stay would allow the new Director to have an opportunity to examine the rules and determine how the USPTO should proceed, which notably included the possibility of rescinding the rules. The joint motion, which requested the stay of all en banc proceedings until 60 days after the Senate confirms the nomination of Kappos as the new Director of the USPTO, was granted by the Court on July 28, 2009. Depending upon the new Director's decision, the legal issues currently before the Court may be significantly altered or may even be rendered moot, making it unnecessary for the Court to take further action. The stay of all en banc proceedings will last 60 days, running until about October 5-6, 2009, at which time if the rules are not rescinded, the schedule for briefs and oral argument will be reset.

For insight into how Kappos will deal with the proposed patent rule changes, we look to comments he made prior to and after his nomination. Regarding changes to the continuation procedures, in 2006 Kappos commented, albeit as the Vice President and Assistant General Counsel of Intellectual Property at IBM, that:

"[T]he issue in the end really isn't whether we'll preclude second continuations or third continuations or whatever. The issue is really having an adequate explanation for them, getting that in the record, and making it clear between the patentee, the Office and ultimately the public. Remember, the purpose of the system is to benefit the public. If the public has that information, we can all guide our activities later on, knowing what was done, why it was done, and that it's been reduced to writing, and everyone can understand it. We'd get a lot more clarity in the system, and we'd get a public notice function that actually works."2

Even a cursory review of the proposed patent rule changes in their current form, particularly Final Rule 78 (related to the continuation practice), reveals disconnect between the rules and general thoughts on the continuation practice offered by Kappos. It seems likely that Kappos' approach to reform the claims standards and continuation practice will be less rigid. For example, Kappos provided further insight into possible changes to the continuation practice by the USPTO, when he stated:

"[W]e need to set a bookmark there, and when we get to talking about how to improve the continuation proposal, one of the things we should talk about around this table is how we would guide the Patent Office in setting up the criterion for prosecuting in getting past the first continuation. Obviously, if that bar is very low then those who don't like this rule would be satisfied because almost every application would get over it. If the bar is very high then quite the opposite."3

Additionally, on behalf of IBM, Kappos filed a declaration in support of the AIPLA amicus curiae brief supporting the position of GlaxoSmithKline (the SmithKline Beecham Corporation and Glaxo Group Limited collectively or GSK) on the retroactive application of the rules to pending applications, and the "related application" disclosure requirements.

Most recently, when asked at the Senate Judiciary Committee hearing about the proposed claim and continuation rules and whether his prior position at IBM would influence his attitude, Kappos responded by saying his role, if confirmed as Director, would be to "[do] the right thing for the American people and the United States of America," and he would "put [his] previous role behind [him] and focus on doing the right thing for the United States of America—in the Tafas case and the Bilski case and everything else on a policy level." Doing the right thing for the American people and the United States of America likely will involve the USPTO crafting a new solution to the problems faced by the claims standards and continuation practice, which may ultimately lead to yet another set of proposed rules—stand by.