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The Tafas v Doll Rehearing En Banc PART I

Jul 7, 2009
Harold C. Wegner

Real solutions versus an unnecessary delay and fight over a really bad rules package

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I. Overview*

The July 6, 2009, grant of a suggestion for rehearing en banc in Tafas v. Doll, 559 F.3d 1345 (Fed. Cir. 2009)(Prost, J.), reopens the door to a fresh but this time en banc hearing of the Final Rules of the U.S. Patent and Trademark Office (PTO) that, if their appeal is successful, would establish de facto hard caps on the number of claims an applicant may present and the number of continuing applications that may be filed as well as seemingly bizarre double patenting rules. The en banc rehearing opens the door to a fresh appeal by the PTO to the condemnation of its “Final Rules”, more formally, Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications, 72 Fed. Reg. 46716 (2007)(final rulemaking).

Even without the grant of the suggestion for rehearing en banc the litigation had threatened to drag on for months – or years – with a remand necessary for a variety of issues that had not been considered by in the panel opinion. The very real problems that face the patent system – the root causes for the Final Rules – are only escalating. The system cannot afford the months or years of uncertainty that would now take place with continued, contentious litigation before an en banc panel. (For the panel opinion alone, there were three separate opinions as part of the panel’s consideration of the case.)

This paper first focuses upon Final Rule 75 that creates a de facto hard cap on the number of independent and total claims that may be presented in a single application. The PTO mandated a de facto hard cap on claim numbers through imposition of the draconian requirement of an Examination Support Document (ESD) for applications exceeding arbitrary numbers of independent and total claims. This paper explores whether the ESD requirement should be implemented or whether there are more sensible alternatives to deal with the minority of patent applicants that may abuse the system through undue claim proliferation.

There has been a misconception within some portions of the general patent community that if Tafas is not reconsidered by the Federal Circuit – or reviewed on appeal by the Supreme Court – then there will be an immediate imposition of the ESD rules. This is not at all the case, as there will be a period of months – or years – before the final judicial resolution of the Tafas case. In this period, the new Obama Administration will have the luxury of time to ponder whether the ESD rules should be implemented – or whether there may be a better alternative. See § II, Reconsidering the “ESD” Rules.

The courts and the Office have long faced the problem of a minority of applicants abusing the system through the proliferation of too many claims beyond a reasonable number keyed to a particular invention. The problem can be traced to the nineteenth century when formal claims became a statutory requirement and then ninety years ago to the imposition of the forerunner of the modern “undue multiplicity” rejection. A rejection to the presentation of unreasonable numbers of claims was effective in checking abuse of the system until 1970 when judicial dictum demonstrated that the composition of the reviewing court of the day was unwilling to favorably consider this basis for rejection. The subsequent nearly forty year period has seen the largely unchecked proliferation of cases with large numbers of claims. Yet, “undue multiplicity” remains a weapon at least in theory although not widely used in practice. See § II-A, The Ninety Year Saga of “Undue Multiplicity.”

There has been no meaningful review of “undue multiplicity” from the Federal Circuit prior to Tafas. Tafas acknowledges the existence of this doctrine but expressly refrains from any ruling as to its viability. The door is left open to a principled reintroduction of “undue multiplicity” as a ground for rejection. See § II-B, Tafas Leaves the Undue Multiplicity Door Open.

Certainly, the “undue multiplicity” rejection as it was routinely applied in the 1960’s should not be an answer to the problem of the presentation of large numbers of claims. Yet, a carefully administered use of this basis for rejection is suggested as a better alternative to the ESD. Any policy implementation of the “undue multiplicity” rejection must have safeguards including a recognition that the burden is upon the Examiner to explicitly show precisely why there are too many claims presented to an invention. See § II-C, “Undue Multiplicity” Applied in Principled Fashion.

The most notorious portion of the Final Rules remains the de facto hard cap on the filing of continuing applications. Yet, the PTO has admitted in its Final Rules that implementation of its rule would do virtually nothing to stem the tide of continuation application abuse: Less than three (3) percent of continuing application filings would have been impacted under 2006 statistics had the Final Rules been effect at that time. See § III, A De Facto Hard Cap Blocking a Third Continuation.

While attacks have been focused by the patent community on the PTO and its rules package, the co-plaintiffs throw stones from glass houses. One of the co-plaintiffs essentially admits to being a submarine patentee-in-waiting seeking to capture intervening developments of third parties but with a naïve understanding of the law of priority that could be considered to make his complaint frivolous. The other co-plaintiff essentially admits having more than one hundred (100) applications on file that would be in violation of the Final Rules. See § III-A, Admitted Abuses of the System by the Co-Plaintiffs. Also unexplained are the arguments made in open court that essentially say that the mega-drug co-plaintiff needs to file continuing applications for a period of about ten years to survive in its business as a pioneer drug innovator, while neglecting to inform the court that the European Patent Office has just instituted a practice that creates a hard cap on continuing (divisional) chains that ends twenty-four months from the first action in the original case. See § III-B, The European Twenty-Four Month Hard Cap. While the PTO pushes forward with its policy argument key ed to curbing continuation application abuse, its own Final Rules admit that the rules impact less than three (3) percent of all continuing application filings. See § III-B, Impact on Less than Three (3) Percent of all Cases.

The real solution to continuation abuse is not in any hard cap of any kind, but rather on internal Office reform of the production count system which must be considered a priority for change. See § III-D, A Realistic Examiner-based Productivity Metric.

Double patenting rules are tightened to require a terminal disclaimer for families of patent applications with related claims. See § IV, Double Patenting Rules Without Force. But, the problem of double patenting as an extension of monopoly is today becoming as rare as a sighting of a “polka-dotted zebra[ ].”

Finally, the coming en banc battle in Tafas appears to be much ado about a very bad set of rules that will never see the light of day no matter who prevails. It is difficult to imagine, given the demonic iconic nature of the word “Tafas” for rules would be implemented that on balance may produce more harm than good. See § V, Bad Facts Make Bad Law.

II. Reconsidering the “ESD” Rules

Final Rule 75 would, as approved by the panel majority and, if implemented, effectively end the filing of patent applications with more than five independent or more than 25 total claims. It is now an open question what the en banc court will follow the panel majority’s lead by again reversing the trial court’s dismissal of Final Rule 75.

To be sure, there is a need for a flexible cap to control applicants on a claim drafting rampage. Anecdotes abound concerning even reexaminations where there are thousands of claims that have been presented in a manifest attempt to throw sand in the wheels of the examination process. Gross abuse of the system of this ilk cannot be tolerated.

The question is not whether mechanisms are needed to control the evident abuse of the small minority of applicants who unfairly exploit the system, but, rather, whether Final Rule 75 is really the best solution; is there a better alternative?

Final Rule 75 imposes a requirement for an “Examination Support Document” or “ESD” for any application exceeding the 5/25 claim cap. “To comply with Final Rule 265, an applicant must conduct a preexamination prior art search, provide a list of the most relevant references, identify which limitations are disclosed by each reference, explain how each independent claim is patentable over the references, and show where in the specification each limitation is disclosed in accordance with 35 U.S.C. § 112, ¶ 1.” Tafas, 559 F.3d at 1350 (citation omitted).

Since both the cost and consequences of compliance with Final Rule 265 are so dire this would effectively terminate prosecution of applications with large numbers of claims.

The panel majority “s[aw] no persuasive reason to prohibit the USPTO from requesting the information required by Final Rule 265….” Tafas, 559 F.3d at 1364. Reading this snippet of the opinion in vacuo may well lead to the conclusion that the dreaded ESD rules would be implemented – absent en banc review or a successful certiorari petition and ultimate Supreme Court reversal.

The new Obama Administration will have the right to consider options to implementation of Final Rule 75 even without awaiting a decision by the en banc court in the further legal proceedings in the Tafas case.

A. The Ninety Year Saga of “Undue Multiplicity”

Not later than the decision of Assistant Commissioner Clay in the Duncan case ninety years ago, Ex parte Duncan, 1920 C.D. 36 (Comm'r Pat. 1919)(Clay, Ass’t Comm’r), aff'd, 265 F. Supp. 1012 (D.C. Ct. App. 1920), the Office had a policy-based ground to deny undue numbers of claims which at least in theory continues today as “undue multiplicity” – although in practice this ground of rejection has been dormant for the nearly forty full years since In re Wakefield, 422 F.2d 897 (CCPA 1970).

1. The Early History of Claim Proliferation

Ever since formal patent claims became a statutory requirement in 1870, the vast majority of applicants of patent-worthy technology have sought to particularly point out their inventions in precisely crafted claims that are easy to understand while an unscrupulous fringe at the other end of the spectrum has sought to obfuscate the bounds of protection through ambiguity which often involved the presentation of an excessive number of claims. Given the great expense involved in the defense of a patent infringement lawsuit, a weak patent with dozens of claims could present a powerful commercial weapon to nip competitors in the bud, even though in the long run a lawsuit – if run through completion – might be unsuccessful.

Claim proliferation was condemned by the Supreme Court as early as 1873 where the court said that a patent should be held invalid “where a specification by ambiguity and a needless multiplication of nebulous claims is calculated to deceive and mislead the public[.]” Carlton v. Bokee, 84 U.S. (17 Wall.) 463, 471-72 (1873)(emphasis added).

An emerging doctrine of “undue multiplicity” as basis to deny the presentation of too many claims may be traced to decisions from the Commissioner’s Office.

In Duncan, the Office complained:

"When a simple invention is claimed over and over in mere variations of language, the necessary result is to confuse and to fail to point out the invention as the statute requires. ... If one points out the same thing twice, he does not point out that thing distinctly. The very fact that the same structure is claimed twice renders the set of claims indistinct, because there is no justification in a patent for two claims to the same thing, and when the reader finds two claims he necessarily looks for them to be drawn to different things. ...” Duncan, 1920 C.D. at 38 (quoted in D. Chisum, Patents, § 8.06[4](2009)).

Thus, “[u]ndoubtedly a patentee may claim his invention in several scopes – that is, in its broad aspect and also in its narrow aspect – and he may also separately claim several related inventions; but there is no authority for the Commissioner to issue a patent with several claims to the same thing." Duncan, 1920 C.D. at 42-43(quoted in D. Chisum, Patents, § 8.06[4](2009)).

In McCullough, the Commissioner condemned the flagrant proliferation of claims:

"The presentation of an application [with a 27 page specification and 70 pages of 325 claims] merely clogs the work in the Office. It is unfair, not only to inventors generally, but it is unfair to the particular applicant, if he has other applications pending, and to other clients of the present attorneys. Obviously the mere reading of this mass of claims, to say nothing of the time it would take if they are to be compared with the prior art and with each other, would take time which should properly be devoted to the determination of the question whether the applicant had really made an invention over the prior art and, if so, what that invention is.” Ex parte McCullough, 1927 C.D. 12, 13 (Comm'r Pat. 1926)(Robertson, Comm’r) (quoted in D. Chisum, Patents, § 8.06[4](2009)).

It was furthermore stated that “[t]here is at the present time no greater abuse than the filing of applications with a mass of undigested claims. Patents which have issued from this Office with a very large number of claims have been repeatedly criticized by the courts, and the filing of such applications has been repeatedly and bitterly criticized by committees in Congress. ..." Id.

2. The Modern Doctrine of “Undue Multiplicity”

Through the 1960’s, it became conventional for an Examiner to deny examination to a large number of claims beyond what the Examiner considered reasonable for examination purposes. Without mentioning post-1960 case law, the modern Manual states the widespread policy basis to deny examination of an unreasonable number of claims through a rejection on the basis of undue multiplicity, even though failing to acknowledge that the doctrine is little used:

“Where, in view of the nature and scope of applicant's invention, applicant presents an unreasonable number of claims which are repetitious and multiplied, the net result of which is to confuse rather than to clarify, a rejection on undue multiplicity based on 35 U.S.C. 112, second paragraph, may be appropriate. As noted by the court in In re Chandler, 319 F.2d 211, 225 (CCPA 1963), ‘applicants should be allowed reasonable latitude in stating their claims in regard to number and phraseology employed. The right of applicants to freedom of choice in selecting phraseology which truly points out and defines their inventions should not be abridged. Such latitude, however, should not be extended to sanction that degree of repetition and multiplicity which beclouds definition in a maze of confusion. The rule of reason should be practiced and applied on the basis of the relevant facts and circumstances in each individual case.’ See also In re Flint, 411 F.2d 1353, 1357 (CCPA 1969). Undue multiplicity rejections based on 35 U.S.C. 112, second paragraph, should be applied judiciously and should be rare.” MPEP § 2173.05(n), Multiplicity (8th ed., Rev. 7, July 2008).

The undue multiplicity rejection was accompanied by a requirement to specify a limited number of claims for examination that would achieve the Examiner’s goal of paring down the examination burden to a reasonable number of claims.

“If an undue multiplicity rejection under 35 U.S.C. 112, second paragraph, is appropriate, the examiner should contact applicant by telephone explaining that the claims are unduly multiplied and will be rejected under 35 U.S.C. 112, second paragraph. Note MPEP § 408. The examiner should also request that applicant select a specified number of claims for purpose of examination. … Applicant's reply must include a selection of claims for purpose of examination, the number of which may not be greater than the number specified by the examiner.” Id. The patent applicant had no choice but to make the selection of claims for examination, as a mere traverse of the requirement would be insufficient.

A traverse of the requirement would lead to a parallel rejection on the basis of undue multiplicity of all the claims, together with a prior art (or other) rejection of the selected claims:

“In response to applicant's reply, if the examiner adheres to the undue multiplicity rejection, it should be repeated and the selected claims will be examined on the merits. This procedure preserves applicant's right to have the rejection on undue multiplicity reviewed by the Board of Patent Appeals and Interferences.” Id.

A traverse without selection of claims would constitute a failure to be fully responsive to the examiner’s action, which would result in abandonment of the application. Thus, a patent applicant may challenge the propriety of a requirement to provide certain information, but if the patentee refuses to provisionally provide the information the application may be held abandoned for failing to respond to the requirement. Star Fruits S.N.C. v. United States, 280 F.Supp.2d 512, 514 (E.D.Va. 2003), aff’d, 393 F.3d 1277 (Fed. Cir. 2005).

3. The Wakefield Cold Shower

The “undue multiplicity” rejection was widely used through the 1960’s as an excuse for an unprincipled and arbitrary denial of examination of large numbers of claims. This practice of denying examination without providing a reasoned basis for the denial was struck down in the 1970 Wakefield case:

“[The board viewed] that the number of claims was so large as to obscure the invention, thereby failing to comply with the second paragraph of 35 U.S.C. § 112. … [W]e disagree. Each appealed claim is relatively brief and clear in its meaning. Examination of forty claims in a single application may be tedious work, but this is no reason for saying that the invention is obscured by the large number of claims. We note that the claims were clear enough for the examiner to apply references against all of them in his first action.” Wakefield, 422 at 900-01.

While the decision could be understood from its holding as being a narrow fact-based reversal, the additional message in Wakefield had a chilling effect on any future application of “undue multiplicity” as a basis for rejection:

“The board held the number of claims to be unreasonable and to have the effect of obscuring the invention rather than pointing it out as required by 35 U.S.C. § 112. The board's affirmance of multiplicity rejection, therefore, is based upon the view that the many different definitions of appellants' invention were both unnecessary and confusing. We disagree on both points. It is rarely possible to determine necessity for narrower claims at the time of prosecution. An applicant often does not know all the prior art which may be asserted against his broader claims when he litigates his patent. Further, he is never sure that the broader claims will not be successfully attacked on other grounds when litigated in the courts. See e.g., Graver Tank & Mfg. Co. v. Linde Air Products, 336 U.S. 271 (1949). Moreover, there is no statutory authority for rejecting claims as being ‘unnecessary.’ For these reasons, an applicant should be allowed to determine the necessary number and scope of his claims, provided he pays the required fees and otherwise complies with the statute.” Wakefield, 422 F.2d at 900.

Wakefield sent shockwaves through the examining corps which essentially abandoned the “undue multiplicity” basis even where justified.

4. “Substantial Evidence” versus De Novo Review

A major reason why the PTO abandoned the “undue multiplicity” rejection was due to the fact that review of a PTO Board decision at the CCPA was essentially de novo. Even in the early years of the Federal Circuit, the late dean of the court proudly and boldly pronounced the early court’s de novo review attitude:

“[T]he criticism I hear of the [Federal Circuit] most often is that we have been doing de novo fact finding and delving into the record on our own when we should not. I am probably one of the offenders. … Today there is less likelihood of the court upsetting trial courts' fact finding than there used to be, and I am sorry to say that this is true even where a lazy trial judge, who may even have been inattentive during the trial or clearly incompetent to deal with the technology in a complex case, has made all of his fact findings by adopting proposed findings of the winning party.” Giles Sutherland Rich, Thirty Years of this Judging Business, 14 AIPLA Q.J. 139, 149 (1986).

Accordingly, in the immediate period following Wakefield the anti-“undue multiplicity” attitude of the CCPA meant that a de novo review would be made of each rejection with the en banc CCPA in every case giving close scrutiny to the fact findings of the PTO.

Any “undue multiplicity” rejection to pass muster must necessarily involve a heavily fact-dependent inquiry as to precisely why there are too many claims. Unlike the de novo review of the early Federal Circuit and the post-Wakefield CCPA. Today, however, “[i]n appeals from the Board, [the Federal Circuit] review[s] questions of fact for substantial evidence.” In re Swartz, 232 F.3d 862, 863 (Fed. Cir. 2000)(per curiam)(citing In re Gartside, 203 F.3d 1305, 1315 (Fed. Cir. 2000)).

*Harold C. Wegner, The Tafas v. Doll Rehearing En Banc: Real Solutions versus an Unnecessary Delay and Fight Over a Really Bad Rules Package, Gray On Claims, July 7, 2009, GrayOnClaims.com."
The article may be accessed from GrayOnClaims at the following link, http://www.grayonclaims.com/home/2009/7/7/hal-wegner-authors-paper-entitled-the-tafas-v-doll-rehearing.html

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