US federal court sides with GSK, strikes down USPTO rules

Dear All,

We have been tracking this case from long time and finally the decision is here http://pdfserver.amlaw.com/dc/USPTO.pdf

IP lawyers rejoiced Tuesday as a federal judge rejected new rules for streamlining the patent process that had applicants apoplectic.

Eastern Virginia U.S. District Judge James Cacheris voided the rules because, he wrote, the U.S. Patent and Trademark Office doesn't have the authority to make the changes.

"There's a lot of good cheer going around," said Hans Troesch, a veteran patent prosecutor with Fish & Richardson in Redwood City, Calif. "It's a great relief to the practitioners."

The patent office was seeking to unclog the backlog of patent applications by reducing the number of claims, listed in each one to help define a patent, and the number of continuations, which are used to amend patent claims and contest those that are rejected. Claims would have been limited to 25, and continuations to just three. Currently, there are no limits.
But patent lawyers criticized the new rules for unfairly limiting complex patents and for retroactively affecting pending applications.

The rules were scheduled to go into effect on Nov. 1, 2007, but Triantafyllos Tafas, founder of medical technology company Ikonisys, and drug maker GlaxoSmithKline filed lawsuits last fall against the PTO and its director, Jon Dudas, to block them. Cacheris granted a preliminary injunction on Oct. 31, and GlaxoSmithKline and Tafas filed for summary judgment on Dec. 20.
In granting summary judgment Tuesday, Cacheris wrote that the patent office can't make "substantive" changes to the rules, only "procedural" ones.

"[B]ecause the Final Rules are substantive in nature, the court finds that the Final Rules are void as 'otherwise not in accordance with law' and 'in excess of statutory jurisdiction [and] authority,'" Cacheris wrote, citing 5 U.S.C. §706(2).

The patent office, which had argued that the changes were only procedural, said in a prepared statement that it did not agree with the court and is considering an appeal.

"We are disappointed with this court's decision, which rejects our view that the USPTO has the authority to implement the proposed rules about claims and continuations," the statement reads. "The USPTO believes that these rules are consistent with existing statutes and will strengthen the U.S. patent system for all stakeholders."